New York New York. The city so great they named it twice is fast on its way to becoming the city so scared they locked it down twice. Whereas one time New York was a city that never slept, it now seems on course to spend a second winter in total hibernation. As the state of New York declares a fresh state of emergency, we ask whether a new wave of COVID restrictions are coming this winter and how that will impact small businesses.
This time last week I was writing about how the long, miserable infinity that was the COVID-19 pandemic seemed to be all but behind us and about how businesses around the world were feeling ever more optimistic. Since then, however, South Africa raised the alarm about the possibly “vaccine proof” Omicron coronavirus variant and just like that, there are timely reminders everywhere that the pandemic is not over quite yet.
In the face of omicron, several nations have responded by banning flights from South Africa, re-introducing mask wearing in public spaces and both the US and Europe have also stepped up their vaccine ‘booster’ campaigns.
The state of New York however, chose to go a few steps further and earlier this week declared a state of emergency despite not having detected a single omicron case as of yet. The state of emergency may seem to be a touch premature to some but the state, and particularly the city or New York itself was so badly hit during the first wave that they are presumably not taking any chances. The state of emergency, which kicks in on 3rd December, purely concerns the administration of hospital care and does not place any new restrictions on individuals or business as of yet.
However, some are fearful that the SOE may prove to be a mere precursor to more drastic, restrictive and damaging measures such as lockdowns.
All About Omicron
The omicron strain (known to its friends as B.1.1.529) was first detected in South Africa on 23rd November although the patient had apparently returned to Hong Kong by the time of the confirmation. It has now been classified as a ‘Variant of Concern’ by the World Health Organisation and some experts fear it may prove to be particularly transmissible and even resistant to vaccines. However, the South African Doctor who discovered it has been at pains to point out that the Omicron symptoms appear to be on the milder side of the Coronascale especially compared to the Delta Variant which hit the world earlier this year.
The variant has so far been found in Hong Kong, Botswana, the UK, Belgium, Germany, Italy, the Czech Republic and it seems only a matter of time before a case is registered stateside.
Winter Lockdowns in Europe
Even prior to the unwanted, early Christmas surprise that is the Omicron variant, the holiday season was on the verge of being less than jolly as much of Europe teetered towards lockdowns. Austria’s controversial “lockdown of the unvaccinated” soon turned into a full national lockdown, and fresh curtailments on leisure activities were introduced in Czech Republic and the Netherlands. Even the previously almost back to normal Portugal is now preparing to introduce COVID passes from next month.
Considering that the prognosis was starting to look grim even prior to the omicron wildcard, a gambling man would give pretty good odds on the western world being back in full metal lockdown by January.
As we know from the past 18 months, lockdowns do hurt everybody (well, not quite everybody Amazon/Big Pharma…) but are especially rough for small businesses. Bars, restaurants and boutique shops suffer the most from the closure of “non-essential” services, have less capital reserves to ride the lockdowns out and generally receive the least help from state aid programmes. According to one research paper, 55% of Europe’s small businesses were close to permanently shutting down during the pandemic.
Is NY Next in Line For Lockdowns and Potential Hurt For Small Businesses?
Rest assured though, New Yorkers needn’t give up completely on that Christmas cheer just yet. Prior to the omicron panic, New York was fairing relatively well, had hit a good level of stability and was preparing for a “Christmas as usual” (as usual as things can get in the ‘ New York New Normal’ era of vaccine passes) so whilst omicron may throw some spanners into the works, the State and the US in general, is better positioned to deal with them than much of Europe is.
Still, any restrictions that are introduced will most likely hit small business the most. For example, some of the first of any restrictions put into place are likely to impact the hospitality sector and may force New York’s bars to close early or the state’s restaurants to operate at half capacity. Also, any independent shops that were hoping for a Christmas bonanza may also find that the omicron panic causes shoppers to do their gift buying online as Amazon celebrates yet another Christmas to remember in their stead.
And If The Worst Should Happen….?
When the first waves of Coronavirus hit New York, the Fed responded by rolling out an unprecedented and fairly comprehensive aid package. However, many analysts including businessloancompanies.com, a specialist in the small business financing space, have already speculated that this is unlikely to happen again for fears that a fresh round of PPP and quantitative easing will only further antagonise a rising inflation problem and further undermine an already wavering dollar.
This means that in the event of more lockdowns, small businesses will be on their own and left to fend for themselves after an already trying 18 month period. However, because of this it is likely that lockdowns will not enjoy the widespread tolerance and support they had last time and will probably only be used as a last resort in the event of a truly desperate situation.