Two hundred and forty six days passed between Gov. Gretchen Whitmer’s first stay-at-home order to fight the COVID-19 pandemic and new state restrictions scaling back and closing some businesses.
In some ways, the restrictions were expected given public health experts’ predictions of a second wave this fall and winter. But while Michigan and neighboring states are revisiting certain shutdown orders, the dynamics of the pandemic are wildly different.
Cases, hospitalizations and deaths are spiking, but officials know far more about the virus than they did in March. Mental health indicators are growing at an alarming rate to public health professionals, but promising vaccine trials suggest an end to the pandemic is in sight. Businesses like restaurants and entertainment venues have adapted, pivoted and invested in long-term changes, but face renewed uncertainty after another round of shutdowns. Federal lawmakers roundly supported the biggest stimulus package in U.S. history in March, but are now mired in a stalemate.
Public health experts and economists say the next several months will be a significant test of whether we can stop the massive spread of the virus before a vaccine is readily available — which could take a year — and find political common ground on financial relief for struggling businesses. It’s the latest leg of a trying and painful marathon.
Relief running low
On Nov. 15., Whitmer announced the latest Department of Health and Human Services emergency order shutting down dine-in service at restaurants and bars and closing entertainment venues like bowling alleys and movie theaters.
Within days, a statewide restaurant trade group and two hospitality businesses filed a lawsuit in an attempt to halt the order, saying it would irreparably harm thousands of businesses. This time around, financial relief isn’t as widely available as before.
The federal Paycheck Protection Program closed on Aug. 8 with about $137 billion that went unused. The U.S. House passed an updated, $2.2 trillion HEROES Act in early October, which included $120 billion in relief specifically for restaurants and bars, but it has failed to move in the Republican-led U.S. Senate.
Businesses can apply for smaller, localized grants, but it’s unclear whether those would make up for significant losses in revenue. Those local funds also are dwindling.
The Kent County Small Business Recovery Program included about $30 million total for various sizes of small businesses, companies specifically closed by state order, and childcare providers. As of last week, the program’s remaining $4 million was “rapidly decreasing,” said Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Area Chamber of Commerce, which is helping administer the program. The Kent County Board of Commissioners infused another $5 million on Nov. 19 for busineses affected by the latest restrictions
“This is not going to be easy, of course,” Johnston said. “We’re starting to run out of grants and are getting really close to wrapping that up.”
The Chamber plans to make a lame duck push for legislation deferring property tax payments for businesses that have been shut down. Similar bills passed this summer with broad bipartisan support in the Republican-led state Legislature, but Whitmer vetoed them in July, citing potential negative effects on local budgets and an unconstitutional provision.
Loeks Theatres Inc. spokesperson Emily Loeks said the company — which was forced to close its Celebration! Cinema locations under the three-week order — took precautionary measures that make it “optimistic about what we can provide when community spread of the virus is under better control.”
“This shutdown is particularly painful. Our 10 Celebration Cinema movie theatres were closed for seven months, and a return to closure puts our ability to retain an incredibly fine team of people at risk,” Loeks said. “For our industry, there’s a pretty strong light at the end of the tunnel, but the tunnel is hazardous. We’ve experienced tremendous loss. Without help from Congress and our Michigan government, local ownership of theatres and entertainment venues risks being lost.”
Dennis Johnson, owner of Grand Rapids-based bowling center Clique Lanes, feels as if the latest order singles out specific businesses. Bowling alleys like his are also subject to the three-week shutdown.
“There is nothing in place for small businesses to recoup any of this money,” he said. “There is no PPP, there is no plan. I have nothing for my employees so now we’re just laying them off. … It’s pretty hard. They stuck with us over the first shutdown and hopefully they’ll stick with us through this.”
An economist’s view
Tim Bartik, senior economist at the Kalamazoo-based W.E. Upjohn Institute for Employment Research, said it’s important to consider the recent business closings against a scenario in which the spread of the virus is left unabated.
“We shouldn’t be comparing it to an imaginary world with no virus,” he said.
Allowing the virus to spread as it is, particularly in the Midwest, would cause not only public health damage and wreak havoc on hospitals, but it would also have economic consequences.
“If the pandemic is spreading rapidly, that’s going to shut down a lot of businesses. People would be more afraid to go into those businesses, employees would be getting sick, childcare centers would close,” Bartik said. “Without doing anything, we would have had — perhaps at some point — increasingly severe economic consequences with the virus spreading.”
While Bartik agrees restaurants, bars and entertainment venues will likely see short-term pain, controlling the spread is proving to be better for the overall economy.
“The ideal thing would be some kind of federal stimulus that would include payments to restaurants and bars,” Bartik said, adding that the PPP program “on the whole” worked but could have been more targeted to businesses that need help the most.
“We need a federal stimulus bill that ideally extends unemployment benefits and payments to households to keep the economy rolling,” he said. “I think (the CARES Act) was a good thing and should be continued in some form.”
While the state constitution requires Michigan to have a balanced budget, tying its hands to be able to offer direct stimulus like the federal government, Bartik questioned whether the state could create its own low-interest loan program for restaurants and bars.
“I think that should be on the table for discussion,” he said.
‘Lives and livelihoods’
As of last week, Michigan had the fourth highest number of hospitalizations and the ninth highest number of deaths in the U.S.
Spectrum Health CEO Tina Freese Decker and Kent County Health Director Dr. Adam London painted a bleak picture during a Nov. 16 virtual meeting held by the Economic Club of Grand Rapids. Spectrum’s COVID-19 test positivity rate stood at 19.6 percent, and the rate is a “precursor to (hospital) admissions,” Freese Decker said.
London added that the increasing caseload is “making it very difficult to do case intervention and contact tracing.” The county’s test positivity rate was over 15 percent after hovering around 2-3 percent for most of the summer.
“This is a very concerning trend. We don’t know how high it’s going to go,” London said. “Now we have environmental and social factors working against us going into the colder months. The air is drier and much more favorable to virus transmission.”
Announcing the DHHS restrictions on Nov. 15, Whitmer said the “situation has never been more dire” in Michigan: “We are at the precipice and we need to take some action.”
Within days, governors in neighboring states followed suit. On Nov. 18, Minnesota Gov. Tim Walz ordered a four-week shutdown of bars, restaurants, fitness clubs and various entertainment venues, and halted amateur sports and limited visitors to individual households. On Nov. 17, Ohio Gov. Mike DeWine issued a three-week overnight stay-at-home order — essentially a 10 p.m. to 5 a.m. curfew — and hadn’t ruled out additional restrictions.
Health experts praised Whitmer’s move as a model for the type of targeted restrictions on places where transmission is prone to spread.
“What the governor (Whitmer) did is very reasonable in many ways to stem the spread of this virus,” said Johnston of the Grand Rapids Chamber. “Do we have concerns about some of the details in it? Yes. Dealing with industries in a broad brush and not others is concerning. It’s about their livelihoods, but the most important thing is lives.”
Johnston said the “general reaction” from the business community was that something had to be done about the surge in cases and strain on hospitals.
Loeks acknowledged that the latest COVID-19 surge “has clearly reached a dangerous level,” and understood the DHHS measures to “ensure our hospital systems don’t collapse.”
At the recent Econ Club virtual meeting, West Michigan Policy Forum officials stressed the need for businesses to set examples with strong workplace safety measures, including regular health screenings and mask wearing. Past WMPF chairman and Amway Corp. Co-Chairman Doug DeVos said multiple times the goal is protecting “lives and livelihoods.”
“We have to continue to be focused on flattening the curve, we can’t lose sight of that,” DeVos said. “As a business leader, make sure you are doing these things and you’re telling your employees about it. Talk about it. Make it visible.”
He also called on the business audience to “challenge leaders at all levels to be better,” a sentiment echoed by Johnston.
“The biggest thing is maintaining our health capacity right now,” Johnston said. “In terms of what we do about it and where’s help going to come from: It’s all about leadership.”