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Wisconsin businesses brace for economic impact as COVID-19 cases soar

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Owner of Q-Tea Premium Tea House and The Sense Spa + Wellness Center, Quan Hoang, pictured on Thursday, Oct. 8, 2020, at 124 S. Military Ave., Green Bay, Wis. “We have to be super careful,” he said. “Customers are required to wear a mask when they enter the building. They are asked to wash their hands once they enter the building and we have installed air ventilation systems which we hope can keep us safe.” (Photo: Ebony Cox/USA TODAY NETWORK-Wisconsin)

The region’s explosion of coronavirus cases doesn’t just threaten more lives but could reverse Wisconsin’s economic recovery as it infects more of the workforce and saps consumer demand. 

Wisconsin’s Department of Health Services is reporting more than 2,300 new, positive test results each day right now with the Green Bay, Appleton, Oshkosh, Fond du Lac and Marinette areas all in counties with very high case activity. They’re among the 20 U.S. metro areas with the greatest number of positive COVID-19 tests per 100,000 people, according to the New York Times.

The impact is being felt by large and small businesses, alike. 

The Green Bay Packers, for instance, announced Tuesday fans would not be allowed to attend home games indefinitely, citing the rampant community spread of the coronavirus. Two miles from Lambeau, the owner of a small tea shop says he’s selling only a few dozen cups a day compared with a few hundred during normal times. 

Noah Williams, director of the University of Wisconsin-Madison’s Center for Research on the Wisconsin Economy, said the state’s economic recovery seems to have slowed, if not reversed, with the increasing number of COVID-19 cases.

“Clearly it’s going to depend on how long it takes to get this spike under control and get things back to normal,” Williams said. “But I think there’s already signs that it’s already slowing the recovery and delaying things and certainly has ability or the capacity to do so even more.”

One sign is the center’s analysis of foot traffic in commercial spaces, which sharply decreased in late September after remaining stable for months. The second is its analysis of the impact on the labor market for small businesses. Labor market measures like the number of hours worked and employment had been stable until early September, then declined the last couple of weeks.

By those measures, Williams said, we seem to be back in June.

Missy Hughes, secretary of the Wisconsin Economic Development Corp., has spent months trying to drive home that communities’ economic health is tied to their residents’ physical health and wellness.

“We’re going to see an impact on the economic output, especially in the northeast region,” Hughes said. “This is reverberating across the state. People are concerned.”

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Pro football casts a large shadow over Green Bay’s economy and illustrates the ripple effects. Each Packers home game generates $15 million in direct and indirect spending.

Two miles away from Lambeau, Q-Tea Premium Tea and The Sense Spa & Wellness Center owner Quan Hoang said sales are down $15,000 compared with this time in 2019. A year ago, the Green Bay tea shop might sell 200 cups of tea on a given day; now, it’s more like 30. 

Customers have canceled appointments, even with safety measures and mask requirements for employees and customers. “They’re afraid of coming in,” Hoang said. 

When you add the revenue lost from the postponement of both the Wisconsin Badgers-Notre Dame Fighting Irish football game at Lambeau and the Ryder Cup pro golf tournament at Kohler, the lack of major sports events could easily cost the northeast region over $150 million. 

RELATED: Packers say no fans at Lambeau Field until COVID-19 rates improve

RELATED: A season without Packers fans would devastate Green Bay economy

Then there’s the Experimental Aircraft Association’s decision to cancel this year’s AirVenture in Oshkosh. That dealt a $170 million blow to Winnebago, Outagamie, Fond du Lac, Calumet and Brown counties, too.

That $320 million loss from sports events and the EAA is just the tip of the iceberg. With cases growing, more events could be canceled. 

On top of fewer customers, businesses are being left with fewer workers. The move to virtual instruction by most school districts means employees have to stay home to watch their children, leaving business owners like Hoang short-staffed.

“It’s just really rough, you know. We try to survive and hold our breath and that this will be over soon,” Hoang said. “We try to get everyone we can back to work. We try to stay busy. We try to make as much as we can to pay employees. Sometimes, they work a whole day and only sell 20 or 30 cups (of tea). It’s not enough.”

RELATED: Community actions must change now to stop the ‘tidal wave’ of COVID-19 patients pouring into Fox Valley hospitals, health care leaders say

School districts in northeast Wisconsin had to pivot mid-semester and have closed in-person instruction as a result of the community spread of COVID-19. The Green Bay Area School District, already teaching online since the year started, closed its buildings entirely Oct. 1, while West De Pere, Gillett and Denmark schools moved in-person classes temporarily to online instruction. Ashwaubenon, De Pere, Howard-Suamico, Pulaski and Shawano schools made similar decisions.

To businesses, this requires last-minute accommodations and business strategy changes as employed parents must take care of their children learning virtually from home.

In a UW-Oshkosh economic impact survey in August, nearly half of the businesses responding indicated school district decisions harm their workforce availability. Business managers had to be nimble and make accommodations as school boards made their decisions in late July and August and manage employees with children across multiple school districts.

RELATED: Study: 43% of Wisconsin businesses say school districts’ reopening plans could impact state’s workforce availability

In May, the spring shutdown deprived Pepper GB owner Ricci Bosley of the chance to celebrate the downtown Green Bay cafe’s one-year anniversary in any meaningful way. After reopening, Pepper GB sales were 25% of what they were pre-pandemic.

Now, Bosley worries about the new state order placed in response to the spike in COVID-19 cases. It’s requiring bars, restaurants, and stores to operate at 25% capacity. She worries this will spell the cafe’s end. 

“It’s a very serious reality that we could go under if we’re going to keep getting restricted,” Bosley said. “The people coming in here have been conscious of safety requirements and were comfortable with it. They’re just trying to live their lives as normally as possible.”

Health-care businesses strained by demand

In recent weeks as hospitalization rates skyrocketed by as much as 500%, health care providers like ThedaCare have had to care for more patients with fewer workers. Dr. Imran Andrabi, president and CEO of ThedaCare, said about 220 staff members — roughly 3% of the organization’s 6,800 employees — were not able to work because of exposure to coronavirus or other reasons.

“More than bed capacity, every bed needs human beings to take care of human beings,” Andrabi said. “It causes us not to be able to serve our community in a complete manner. I do believe our team members are doing everything they can to protect themselves inside and outside work. It’s a situation where we need each and every individual in our communities to be a part of the rallying cry to keep everyone safe. What I do impacts me and impacts everyone else around me as well.”

At the St. Paul Elder Services Inc. long-term care and short-term rehab facilities in Kaukauna and Green Bay, President and CEO Sondra Norder said employee absences due to positive tests in their households have “devastated” the workforce of 450.

“I’m afraid the next spike is around the corner because of the unchecked spread in our communities right now. It’s completely out of control. It’s causing long-term care providers across the nation to fold,” Norder said.

St. Paul Elder Services employees are offered double their pay to pick up extra shifts to make up for the absences, and the cost for everything from staffing to personal protective equipment has gone up.

The decreased revenue and increased costs for staff and supplies will further impact St. Paul Elder Services’ already-thin operating margins, Norder said. She’s even more worried worse times lie ahead. 

“We could barely keep doing this before the pandemic. Now add the PPE costs, the loss of revenue and people not wanting to move into a nursing home when family can’t visit. This is going to dominate our workflow and our policy and our spending and our financial results for years to come.”

Some may view the decision on whether to follow health and safety protocols as a political one, but health care providers argue it can also be an economic decision, too. 

“We’re an economic force, too. You can’t separate economic concerns from pandemic responsibility because care providers are some of the largest employers in your community,” Norder said. “We have as large an economic impact as we do on your health care.”

RELATED: Economy will not recover until the virus is under control warns Federal Reserve Bank president

Andrabi, at ThedaCare, said an economic shutdown is the last thing he would advocate to impose. But he said the region needs to realize if the rates of infection continue to grow, it will do further damage to the economy. 

“If we as the people of this community could take this into our own hands, we can stop that economic shutdown from coming our way,” Andrabi said. “If we don’t do that, we will create that possibility which no one wants. Let’s not solve this in hospital beds. Let’s solve this in the community. We can do it.”

Contact Nusaiba Mizan at (920)-431-8310 or [email protected]. Follow her on Twitter at @nusaiblah. Contact Jeff Bollier at (920) 431-8387 or [email protected]. Follow him on Twitter at @GBstreetwise

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