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Businesses Fire Rehired Workers Again After States Hit Pause

Businesses Fire Rehired Workers Again After States Hit Pause

Tuesday, 30 June 2020 10:40 PM

A Life Time fitness club sprawls like a small city, 130,000 square feet of treadmills, pools, yoga studios and smoothie cafes. Opening or closing a location requires byzantine scheduling changes for 250 employees and thousands of members.

So founder Bahram Akradi was furious at having to shut five clubs in Arizona on Monday evening -- with just a few hours’ notice from Governor Doug Ducey -- despite nightly deep cleaning and other steps to limit the spread of Covid-19.

“No grocery store has taken our measures,” Akradi said. “No Home Depot has taken our measures. No business has taken the measures we have.”

Governors are taking swift action to combat a resurgence of virus cases, especially in the U.S. South and West, which again threatens to overwhelm hospitals and set back America’s nascent economic recovery. The nation’s top infectious-disease expert, Anthony Fauci, said Tuesday that coronavirus case counts could more than double to 100,000 a day if behaviors don’t change.

The new surge is creating a parade of grim superlatives. Florida’s Miami-Dade County reported its highest numbers of hospitalizations, intensive-care patients and ventilator use in at least two months. In Houston, intensive-care units hit 97% of normal capacity as Texas reported a record number of new cases.

The numbers are spooking governors who had hurried to reopen their economies, many at the urging of President Donald Trump, and they are pausing -- if not reversing -- the process. Arizona, Florida, Colorado and Texas forced bars and nightclubs to close in recent days, while Arizona expanded the shutdown to gyms, water parks and movie theaters. Other states are reconsidering allowing restaurants to reopen dining rooms.

Already hammered by two months of lockdowns, businesses say they’re unfairly being targeted because of the actions of a few operators, including an East Lansing, Michigan, bar linked to dozens of infections among young people. Even owners who approve of shutdowns are frustrated at the sudden changes in direction, which are costing them thousands of dollars in lost merchandise and forcing them to furlough people they’ve just brought back.

Jeffrey Bank, who heads Alicart Restaurant Group, was eager to reopen Carmine’s restaurant inside the Tropicana casino in Atlantic City, New Jersey, on Thursday, even at 25% capacity. Then Governor Phil Murphy indefinitely delayed the restart of indoor dining, citing what he calls “knuckleheads” who flouted social distancing rules.

Bank figures he’ll lose $100,000. He donated all the food his staff had prepared and let go of about 100 people whom he’d just recently rehired.

“I don’t know why one brush paints everyone,” Bank said. “Having a restaurant inside a casino is not the same as having a bar in the middle of New Jersey. They’re different animals. A casino is a controlled, secure environment. Why is it all or nothing?”

Ron Smith has had dining rooms open for the past month at his 13 McDonald’s stores in the Las Vegas area. But on Monday, he decided it was best to reclose them as infections spike across the U.S.

“We were incorrect, meaning the country,” he said, on opening up certain areas this spring. “It’s disappointing.”

Smith said he’s not hopeful that they’ll be able to open again any time soon -- and that for some communities it may not be until next spring.

Despite closing his dining rooms again, he’s keeping his full staff employed, though with fewer hours. He’s even hiring now. Applications are up, but turnover is high as people start to return to their past jobs.

The economy is starting to cool again in states with a resurgence of the virus, following a rebound that saw the U.S. jobless rate unexpectedly drop to 13.3% from 14.7% last month.

Customer transactions at major restaurant chains had been increasing in recent weeks, even if they were still down when compared with last year. However, that momentum reversed itself in the week ended June 21 after infections rose in much of the South and West, according to market researcher NPD Group.

In Arizona, transactions at major chains had roared back and were down only 1% in mid-June from a year ago, but now they’re down 7%, NPD data show. Transactions slipped by 5 percentage points in both North Carolina and Nevada.

Many small cities have seen their downtowns flower with restaurants and nightclubs in recent years, and they fear that another round of shutdowns will roll back that progress. Lakeland, Florida, a city of about 110,000 an hour from Orlando, has a dozen restaurants and six bars that draw people at night, compared with a couple of each 20 years ago, said Julie Townsend, who runs the Lakeland Downtown Development Authority.

She worries that downtown will go to bed again at dusk if too many close. Jack McHugh, who manages one of downtown Lakeland’s mainstays, Molly McHugh’s Irish pub, will try to make do during the shutdown by selling large bottles of beer known as growlers.

In Texas, two dozen bar owners are taking more aggressive action by suing to overturn Governor Greg Abbott’s order closing taverns, arguing he is picking winners and losers among the state’s businesses, the Austin American-Statesman reported.

Townsend said bar owners who follow the rules should be able to serve tipplers who also follow the rules.

“They feel like they’re being punished by the few bad operators, and that bars are an easy target,” Townsend said. “If nightlife goes away, downtown goes dark again after 5, and that would be devastating.”

For some businesses that operate in multiple jurisdictions, just keeping up with requirements in different states is a headache.

Becky Mulligan heads Little Beet, a chain of vegetarian restaurants on the East Coast that are a mix of full-service and fast-casual units. She had been planning to reopen her biggest full-service restaurant on New York’s Park Avenue on July 6 and had just hired four people. With New York’s plan for dine-in service now in flux, she may have to shift them to fast-casual spots.

“The most challenging problem for us has been finding the source of truth in each municipality we’re in,” Mulligan said. “My team and I have learned to check local news sources every morning, noon and evening and then figure out how to operate under the specific regulations that we find. The month of June has been consumed with what we’re allowed to do at each location each day.”

With the scope of the virus’s latest spread uncertain, July may be no better.

© Copyright 2021 Bloomberg News. All rights reserved.

A Life Time fitness club sprawls like a small city, 130,000 square feet of treadmills, pools, yoga studios and smoothie cafes. Opening or closing a location requires byzantine scheduling changes for 250 employees and thousands of members. So founder Bahram Akradi was furious...
Tuesday, 30 June 2020 10:40 PM
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