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L.A.’s Second Lockdown Hints at What’s in Store for Rest of U.S.

The latest Los Angeles lockdown is another hammer blow for businesses still struggling through the pandemic.

L.A.’s Second Lockdown Hints at What’s in Store for Rest of U.S.
Closed businesses on an empty Athinas street during lockdown in Athens, Greece. (Photographer: Loulou D’Aki/Bloomberg)

The latest Los Angeles lockdown is another hammer blow for businesses still struggling through the pandemic -– and it could be a taste of what lies ahead all over the country.

Residents of the second-biggest U.S. city have been under state orders to stay home since late Sunday, because intensive-care units were dangerously close to full capacity amid a surge in virus cases. Officials elsewhere in the U.S. are in a similar spot, forced to consider tapping the brakes on local economies again just when they were coming back. Indoor dining in New York City may be forced to close Monday if hospitalization rates don’t stabilize.

For small firms in particular, the fight for survival could be even tougher this time. Further federal aid has been held up by lawmakers. And L.A. business owners lament that they’ve invested in patios, plexiglass dividers or sanitation stations to keep operating under one coronavirus regime, only to be told it’s not safe enough to stop the spread of the virus and they have to close again.

L.A.’s Second Lockdown Hints at What’s in Store for Rest of U.S.

Paul Tyler, who owns the John O’Groats restaurant in West Los Angeles, has no problem with the idea that saving lives must come above profits. But he says policy makers have to be more transparent about how they’re going about it.

Tyler’s business got a $166,000 loan under the federal Paycheck Protection Program approved by Congress in March. That covered a couple of months of payroll. He also put money into seats for outdoor dining -– playing to the strengths of sunny L.A. But that’s now banned too, and Tyler is trying to figure out how takeaway food alone can keep the restaurant going long enough to celebrate its 39th anniversary in February.

“Common sense has been lacking,” from decision-makers as well as regular citizens, he says. He wonders why officials are banning al-fresco dining but not acting more forcefully against the kind of individual behavior identified by experts as high-risk. The Centers for Disease Control and Prevention, for example, says crowded indoor spaces that are poorly ventilated are a top source of virus transmission.

At briefings with reporters, Barbara Ferrer, the L.A. county director of public health, has been pressed for data backing the need to shut outdoor dining. She said meeting friends for dinner is different from activities like shopping, where people spend less time in one place and can wear masks throughout. “We did do things differently” in the new lockdown, she said. “It’s particularly because of what we learned.”

Even so, it’s creating a whiplash effect for businesses –- and the plea for statistics to back up new rules is a common theme.

L.A.’s Second Lockdown Hints at What’s in Store for Rest of U.S.

Marco Pelusi runs a hair studio in West Hollywood, and says he was prepared to get closed down a second time because he’s been following the surge in virus cases. Even so, he’s disappointed that it’s happening right now, when he’s normally booked solid with clients who want to primp for the holidays –- and after spending money to enforce the last set of curbs.

“We’ve increased our sanitation exponentially,” he says, and customers generally said they felt safer as a result. “I also have yet to hear of anyone getting Covid at a hair salon.”

There’s no doubt that Californians are catching the disease somewhere. Over the past week, Los Angeles County has averaged 8,140 new cases a day, shattering records, according to nonprofit Covid Act Now.

And the economic outlook is getting bleaker, too. Jerry Nickelsburg, director of the UCLA Anderson Forecast, reckons that the state’s labor market probably won’t return to pre-pandemic levels until 2024 or later.

The U.S. Census Bureau says more than half a million people in the Los Angeles-Long Beach-Anaheim region who were employed before March were out of work in October. In the bureau’s regular survey of households, the number of Los Angeles residents predicting their income will drop over the coming few weeks increased by almost 1 million between August and late November, the steepest jump in the country.

L.A.’s Second Lockdown Hints at What’s in Store for Rest of U.S.


In hindsight, it would’ve been better for authorities to deliver consistent support for “bread and butter” Los Angeles industries -- like hospitality, tourism or entertainment -- instead of mandating a roller coaster of closures and re-openings, according to Adam Fowler, research director at Beacon Economics.

“People are piecing together information from all sources to weather a constantly evolving storm,” he says. “They would have been a lot more comfortable if they knew they’d have the chance to recover, even if they had to be offline for a while.”

Kim Vu temporarily shuttered her Sorry Not Sorry cocktail bar because that made more sense than paying staff and other costs while selling take-out and delivery only. With with new ban set to last until at least Dec. 28, Vu says it’s getting harder to see the light at the end of the tunnel.

“I agreed with the first lockdown at the time, and just hoped if we were strict we could all re-open and stay open,” says Vu, who subsequently spent $25,000 to resurface a parking lot and set up heating, lighting and tables there. “Now, if somebody told me a big number of cases are coming from outdoor dining, that’s a no-brainer. But where are the facts?”

©2020 Bloomberg L.P.