Non-essential businesses have now been closed for several weeks and the governor says it will remain that way through the end of the month.
“My prediction for now is this is going to be the most severe and prolonged fiscal crisis New York state and its local governments have seen, really since the Great Depression when government did not operate at the scale it now operates,” Empire Center Research Director E.J. McMahon said.
Economic experts concede predicting the long-term impacts of the coronavirus pandemic is guesswork because nobody’s ever seen a situation quite like this before. Fiscal Policy Institute Senior Fellow Fred Floss said some industries will recover more easily than others when things open up again.
“I would expect some of the businesses that are producing goods and services to kick back a little bit quicker because once they start producing things, the pent up demand is going to take off and people want to buy more,” he said.
McMahon said, regardless of the industry, it may take a while for consumer confidence to return.
“I think a lot of people may be a little bit more concerned and financially reserved going forward,” he said.
The experts agree while the pandemic is more heavily concentrated around New York City, the measures taken to curb it will have a more long-term effect on Upstate cities. Many have either recently recovered or are still recovering from the 2008 recession.
“The irony is I think that NYC, because it is so large and dense, that it is likely to have a stronger comeback than Upstate because it’s just a bigger and more dynamic market,” McMahon said.
They said the Southern Tier specifically has been on a downward spiral for years.
“I’m really worried about Binghamton,” Floss said. “I just think that that’s an area the state is going to have to look at and try to help.”
Floss said the long-term condition of Upstate cities may depend on how much the federal government can provide to local governments to avoid mass layoffs of public employees.
“Those are the people that are going to be here to buy the goods and services to get the economy kick-started,” he said.
McMahon agreed public jobs are very important to Upstate economies but doesn’t think the governor should count on an influx of federal aid.
“I think that every day the governor waits to constrain and find the most practical ways possible to reduce state spending makes it a bigger task the next day,” said McMahon.
© 2020 Spectrum
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