A third of the city’s 230,000 small business may never reopen, according to a grim new report by a leading industry group.
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The Partnership for New York City released the post-pandemic response plan Monday with the help of 12 global consulting firms.
Accommodation, food service and retail jobs are particularly vulnerable, the 67-page study found.
Most small businesses have less than three months worth of cash reserves — a period equal to the length of the state’s COVID-19 shutdown.
“That means that funds to restart, pay back rent and buy inventory are exhausted, leaving tens of thousands of entrepreneurs at risk, particularly business owners of color,” authors Kathryn Wylde and Natasha Avanessians wrote.
They say business owners face high rents, regulatory burdens and taxes.
“COVID-19 has changed the value proposition, since previous advantages such as foot traffic and easy access to the offices of clients and potential customers have diminished.
“On the contrary, over the past decade, political forces have created a much more expensive and litigious environment for business that is no longer sustainable for those whose margins were narrow before the pandemic,” the authors said.
There were some bright spots in the report. Job vacancies are still at 200,000 even with the city’s 18 percent unemployment rate, although there’s a shortage of skilled workers in areas like accounting and business development.
The city’s tech sector survived the pandemic “relatively unscathed” and local startup companies like Clear that invented a health pass to verify a person’s COVID-19 status are poised to profit from the recovery.
Other highlights and recommendations from the report:
- Only 40 percent of Manhattan office workers will return by year’s end and just 75 percent are expected to return full time in the future
- NYC should use city’s restaurant letter grading system to rank post-COVID sanitary measures at public buildings
- Hotels should be converted into supportive housing for homeless and affordable housing for the poor
- 54 percent of city jobs can be done remotely with some NYC companies no longer requiring new-hires to live in-state
- Raising taxes for the wealthy could push the city’s highest earners — who account for 40 percent of the state’s tax revenue — to move elsewhere