One of the benefits of writing this newsletter is it forces me to think & read between the lines to see something going on in the world since the week before. And it has been without a doubt been COVID-19 fever across all news cycles (no pun intended). This week I was thinking deeply about the domino effect that's been happening across all industries: airlines, hospitality, real estate, restaurants, retail, museums, etc. The common heartbeat across all of these entities? Human labor force. While the virus is a public health risk, the reactions to contain it are also creating a public financial risk for everyone who participates in the economy. Here's what stuck out to me:

Stressful Supply Chains

Emergency food distribution experts say the virus exposes underlying weaknesses in the social safety net — that it’s not a matter only of having enough supply to feed the city, but of residents having enough money to afford groceries.

“Solving hunger with food is, of course, important,” said Ben Kerrick, a senior consultant at KK&P, a food system consultancy. “But this exposes that it’s not just, and not even primarily, a food problem. It’s a financial resources problem.”

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According to a 2019 study conducted by the Center for New York City Affairs at the New School and the National Employment Law Project, the city’s restaurant industry employs 250,000 people. Mass layoffs are possible in the sector.

Mr. McMurtrie said he worried about a “demand-side recession,” where spending declines because incomes decline. “That can domino in a very nasty way,”

Cold reality of COL (cost of living)

Most NYC Restaurants Are Relying on Unemployment Insurance to Protect Staff - Eater NY

Amid mass closures, smaller restaurant groups say their best option is to lay off staff until they can reopen — but some say the state’s resources are currently dysfunctional

coronavirus, has also put some 321,000 food and beverage jobs in New York City alone at risk...

The labor department waived the seven day waiting period to apply for benefits, but since the start of the COVID-19 spread, there have been confirmed reports of slowdowns on the agency’s website, likely due to the number of people filing claims. New York Times critic Pete Wells cited on Twitter the case of a bartender who said the site crashed on him six times as he tried to file.”

And even when the site does work, it’s quite possible that unemployment insurance won’t be enough for many. That benefit is capped at $504 per week in New York, or just over $2,000 per month. Many in the hospitality industry will collect much less.

According to the state Department of Labor’s benefit calculator, an individual earning $39,710 every year — the average for a city waiter — would earn $381 per week while on unemployment, or about half their regular wage. A cook with an average annual wage of $32,990 would earn just $317 per week on unemployment, which works out to under $1,270 per month. For comparison: The median rent for a Manhattan studio last summer, according to one report, was $2,700/month.

No gig economy without an economy (LAtimes)

Even economists can only guess how all this will play out, according to Beacon Economics director of research Adam Fowler. “The nature of this kind of disruption is truly unprecedented,” Fowler said. In his view, it’s likely much consumer spending has been delayed rather than lost entirely due to artificial constraints states and cities are placing to avoid the spread of coronavirus. “We’re freezing most of our consumption right now,” Fowler said. “Under short shocks, there’s a percentage of that consumption that’s going to bounce back.”

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“Seventy percent of the U.S. economy is based on consumer confidence and as everyone retrenches, you’re going to see a general downsizing of our discretionary spending,” said Jon Garon, a law professor and director of the intellectual property, cybersecurity and technology program at Nova Southeastern University in Florida. “Uber, Lyft and the Airbnbs of the world are going to collapse because the entire travel industry is going to be dramatically affected.”