Troy’s daytime population used to double, according to Mayor Ethan Baker, as commuters poured in to work at places like Ascension – office jobs that supported restaurants and retail outlets. But with those workers stuck at home for months, the town is sunk in a Covid rut that’s raised some tough questions about the local economy.
“We’re definitely seeing businesses close, but the full effects of that we don’t know yet,” Baker says. “On a larger scale, what we do with these low to mid-rise office buildings, that’s going to be a big question.”
‘Covid Is Driving’
The town’s finances are in good shape for now, largely because this year’s budget depends on property taxes collected last year, says Baker, a Republican. But absent more federal help, he’s contemplating having to make cuts in spending — on cops, schools and other services – that will be tricky to explain to voters when he comes up for re-election in November 2023. This year, majorities in the town and county voted for Democrats.
Ballard at Michigan State says the pandemic downturn has laid bare some structural problems that the state has failed to address. It’s too dependent on the auto industry, he says, and hasn’t invested enough in building a future beyond manufacturing. Young university graduates tend to leave.
Gabe Ehrlich, an economic forecaster at the University of Michigan, says the state — like others — has experienced a sharp but uneven recovery, with better-paid workers recouping lost incomes faster than those at the bottom of the wage scale.
Ehrlich says he’s not forecasting another spike in unemployment, but also can’t rule it out because “Covid is driving the economy.” He sees Michigan’s best hope as tougher anti-virus measures from a Biden administration, coupled with more stimulus from a federal government that might finally shrug off election gridlock. “The sooner we get that, the more it will help,” he says.
‘I Could Survive’
It may not come soon enough for Jane McNamara.
After shutting her Jazzercise studio in the affluent Detroit suburb of Royal Oak early in the pandemic, McNamara is trying to claw customers back by offering parking-lot yoga classes and live-streaming studio sessions. Her business is still off by 30% from pre-pandemic levels. She’s cut her own pay and is trying to renegotiate her rent. But with overhead that’s “way more” than her current income, it’s not looking good, and options like bankruptcy loom.
McNamara is reluctant to blame her plight on either Trump or Michigan’s Democratic governor, Gretchen Whitmer. She’s leery of offending customers who support one or the other, and won’t reveal who she voted for. But what’s really weighing on her mind isn’t the election but the coming cold weather, which will curtail her parking-lot yoga classes.
“We don’t have very many customers who want to come inside,” McNamara says. “This is all going to depend on whether the pandemic gets worse and we have another shutdown. I could survive if I could get my rent lowered, but that hasn’t happened yet. I’m definitely not out of the woods.”
This article was provided by Bloomberg News.