Dean Khagram Quoted in The Arizona Republic

Apr 20, 2020

What Arizona business owners say about when — and how — to reopen the state's economy

, Arizona Republic

Arizona Gov. Doug Ducey has thrown down the gauntlet, asking business leaders and tourism-industry officials for suggestions for re-opening the state's economy after weeks of intensified closures.

While state officials still are collecting feedback that will help the governor make key decisions, members of the business community already are thinking hard about how, and when, the economy should be opened up.

Getting businesses to ramp up likely will take a lot more time and planning than shutting down the economy. Thousands of companies closed their doors virtually overnight, sending employees home to work when that was feasible and laying off others when it wasn't.

“What businesses are needing is a clear and definite timeline (for reopening),” said Kathy Tilque, president and CEO of the Gilbert Chamber of Commerce.

President Trump this week offered guidelines for restarting the economy, with new guidance aimed at loosening stay-at-home and other restrictions in areas where the outbreak hasn't been severe while keeping them in place in harder-hit areas, possibly through the end of the year.

Opening may be set to dates in May

The president's plan aims to transition from phase-one restrictions that limit gatherings of more than 10 people and discourage nonessential travel to a phase-two environment where travel resumes and gatherings of up to 50 people are deemed acceptable. Phase three would mark a return to a fairly normal situation, though with continuing monitoring of infections.

Trump also wants governors to set the tone for reopening their various economies.

Tilque said Ducey, in an April 16 meeting with business leaders, emphasized the need for a gradual reopening of the Arizona economy pegged to dates including May 1, May 15 and June 1.

Tilque said she agrees with a phased-in approach, as do many of the dozens of business leaders with whom she has discussed the situation.

“A ramp-up period will allow for (businesses) to ensure they have product stocked and employees to handle the influx of customers,” she said, adding that a gradual loosening of restrictions over a series of two-week increments will build consumer confidence and should increase revenue as employees gradually come back to work.

The dates could face push back from other officials, though. Phoenix Mayor Kate Gallego said Friday that Arizona does not currently meet the president's criteria for a May 1 reopening, as more testing and contact tracing is needed.

And a gradual approach has limitations, too. Kailee Asher, co-owner of Barter & Shake, a Phoenix hospitality company, said she thinks it's "pointless" to open restaurants, bars or other businesses if they can only seat 10 or fewer people at a time.

Discover is among the many corporations that quickly transitioned most employees to working at home, including 95% of its staff in metro Phoenix. The reverse will happen much more slowly.

“The return (of employees) will start at different times by site and will be gradual,” said Tracy Hedrick, a vice president at Discover’s center in Phoenix.

Working from home is here to stay (for some)

Many Arizonans have worked at home during the coronavirus pandemic, and some of those people might never return to a full-time office environment.

Some 31% of Arizona jobs in cities and towns, and 36% of those in the Phoenix metro area, could be done from home based on occupational breakdowns, according to a University of Chicago study released amid the pandemic. That's slightly above the national work-from-home average of 30% in metro areas.

In general, Tilque predicts that telecommuting will remain important for many companies, “so businesses will need to figure out how to incorporate flexibility while addressing the need to keep the office open for customers,” she said. “Work life won’t be the same, for sure.”

Eric Olsen, owner of Fasturtle Digital in Phoenix, expects masks or other facial coverings will become the norm as the economy reopens. His company plans to reopen “with the idea that face-to-face meetings are essential only when other options have been exhausted and our clients are requesting those meetings.”

Among other changes that Olsen expects to see: Less personal contacts in business, fewer handshakes, reduced crowds in public places and more emphasis on company websites and personal LinkedIn profiles, as more people will be spending time online.

Uneasiness with crowds may linger

Anxiety generated by the outbreak won't disappear anytime soon and likely will influence the way Americans work, shop and play.

"Residual fears of exposure to some virus may still limit people's willingness to be in crowds at sport stadiums, theaters, airplanes, cruises, large shopping malls or even shake hands at the workplace or social events," said Richard Curtin, who directs the consumer-sentiment surveys conducted by the University of Michigan.

Curtin sees the biggest threat to policymakers as reopening the economy so soon that it causes a resurgence of infections. 

"It may only take a resurgence in one locale to prompt consumers from other areas, or even nationwide, to believe the relaxation occurred too soon," he said in a commentary. "A second shutdown of the economy, local or national, would be extremely expensive to both firms and consumers" and trigger more bankruptcies, he said.

Ed Purkiss, owner of Iron Medical Systems in Phoenix, hopes to see continuing and even new restrictions for a while.

These include limited crowds at restaurants, required food delivery for people who are ill, the use of drones to monitor crowd size, badges or pins for people who have been tested, required wearing of face masks in public, and regular virus testing of people working at hair salons, restaurants, doctor offices and other places where regular personal contact occurs.

"I know this sounds like ‘big brother,’ but folks need to know this is still a serious issue,” he said.

Dennis Hoffman, a professor of economics at Arizona State University, agrees on the need to take steps gradually.

“Normalcy in any real sense will depend on the degree of confidence people have that they are safe in consuming goods and services,” Hoffman said. “And that has to require some form of mass testing, a reduction in new cases and new complicated cases.”

Permanent social-distancing safeguards like Plexiglass barriers and temperature checks could be the answer to getting businesses back to operating somewhat normal because it slows the spread of the virus and it makes customers feel safe, Hoffman said. 

Chasse Building Team has incorporated social distancing, masks and other practices on jobsites and in the office. The Tempe construction company also has eliminated as many in-person meetings as possible, using Zoom-type meetings and phone conversations more. Subcontractors are required to conduct wellness checks each morning to ensure worker safety.

“I believe social distancing in general will be the new normal for all of us until a vaccine is developed, tested, approved and distributed,” said Barry Chasse, the company's owner.

Timelines could vary by industry

When the economy reopens, Hoffman said he expects that restaurant and service industries may take longer to operate as normal compared to many others.

But it really might depend more on how quickly and broadly businesses embrace health-safety measures recommended by the Centers for Disease Control.

"Any business that can demonstrate that they can reasonably adhere to and maintain the CDC guidelines for cleanliness and social distancing should be able to open for business,"  said Robert Livingston, general manager of the Harrah’s Ak-Chin Casino in Maricopa. “Until there is a vaccine developed, I would expect to see social distancing measures in place at all businesses, regardless of the industry.”

Still, Livingston said he expects a fairly normal business environment could be reached by some point next year.  

Chasse too predicts the recovery could be fairly quick except for sporting events, gyms, movie theaters, travel and possibly restaurants.

Sanjeev Khagram, dean of the Thunderbird School of Global Management in Phoenix, predicts some industries such as airlines might never return to normal, while other businesses from dentists to hair salons could recover fast, helped by pent-up demand for their services.

Many small companies could find it much easier to get up to speed than large employers, he added.

TWEET LINKEDIN

Article originally published at URL below. Owner retains all rights. 

https://www.azcentral.com/story/money/business/economy/2020/04/18/when-and-how-should-arizona-reopen-its-economy-business-owners-weigh/5148924002/

Reach the reporters at russ.wiles@arizonarepublic.com and helena.wegner@arizonarepublic.com


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