More than five months after the COVID-19 pandemic shut down large segments of the economy, trends indicate a slow recovery has started. According to figures from the Greater Peoria Data Hub, consumer spending is on the rise and unemployment is declining.
Chris Setti is CEO of the Greater Peoria Economic Development Council. He recently spoke with Joe Deacon about the pandemic’s toll on the economy and the keys to recovery.Listen to the conversation.
Joe Deacon: Now that we're months into COVID-19, what significant economic trends have you been able to detect in the Greater Peoria area, both positive and negative?
Chris Setti: Obviously, it's been a rough ride for a lot of small businesses; especially, the shutdown certainly impacted lots of our restaurants, our hospitality industry, retail. Things have gotten better as the economy has been able to reopen. I think that a lot of our small businesses have had to adapt and maybe do things different. So we're seeing some of that resilience of the Peoria area, but also there's still some just general weakness in the economy, for sure.
We've actually seen an uptick in jobs. If you look at employment numbers, we actually have more people reporting that they're employed in August of 2020 than did in March of 2020. The unemployment numbers can be a bit of a false flag, and I don't ever look at the unemployment rate as being terribly indicative of economic strength or weakness. Even the employed numbers can be a little bit false, because all you have to do is work for a couple of hours a week in order to be called employed.
Certainly, we'd rather see the trend lines going in the up direction versus the down direction. But I think we are seeing some more hiring locally. Still a lot of weakness; we still see – between August 2019 and August 2020 – 9,000 less jobs in the hospitality and leisure industry. So that's generally your restaurants and your hotels, your entertainment venues. And that's still problematic.
I think it's problematic for a number of reasons. One, it's just an indication that that sector is still struggling; the owners of those small businesses, the owners of those hotels, the owners of those movie theaters, are struggling. And that's reflected in the fact that they aren't adding payroll back. Some of them are getting by with less staff, some of them are likely still closed or operating at a very, very reduced staff – like a hotel might be at the moment. The other kind of the double sided sword there is that the people who have those jobs tend to be the folks that didn't have the kinds of certifications and qualifications that would allow them to take advantage of those jobs that are hiring, like truck driving or in the health care profession.
So, I think that it's always a bit of a mixed bag in the economy; even in the more positive times, there's always work to be done. But I think we are rebounding, which is good. We're starting to see a little bit of an uptick in restaurant sales tax. I was talking to the folks at the city of Peoria who collect the restaurant sales tax, and it's not where it was and probably not where it needs to be. But it's better than it had been over the last few months. Consumer spending is … our economy across the nation is really driven by consumer spending, and we've seen some uptick in consumer spending here in the region.
You mentioned unemployment, particularly with the hospitality and leisure industry, what concerns arise from the possibility that maybe some of these jobs never come back?
Setti: Well, I think that's an absolute possibility. I just saw that Regal movie theaters – which we don't have a Regal in the Peoria area that I'm aware of – but they're shutting down all of their movie theaters across the country and some something like 40,000 employees will be laid off. And at least the article that I read, it kind of sounded permanent. So there's a very real possibility that many of the smaller businesses in that hospitality space, or even frankly larger businesses are not going to make it.
The restaurant business is a tough business period under normal circumstances. It's a very tough business when you're – even if there aren't regulations that are preventing you from operating at full capacity – the fact that less people are choosing to dine out, choosing to entertain themselves in the ways that we did maybe in February or last December that we are now. So it's a real struggle for our restaurant community and our entertainment community: how do they continue to move forward?
Some of them may have had to adapt. I've seen great examples of expanded outdoor dining options, a more robust online ordering platforms and social media strategies around carry out, and advertising themselves in ways they would never have done before. But I do think it's something that we have to really be concerned about, especially how do we get those former employees of the restaurants and the hotels and places like that into careers where they can sustain themselves and their families.
Along similar lines while unemployment is starting to improve, many of the new jobs aren't quite at the same level as what people may have had before. How important is workforce development to getting the economy fully turned around?
Setti: It's critical. I mean, it's the most crucial thing we can do. how do we get people that don't have the credentials or the certifications or the degrees that are required for the jobs that are available in this community and will be available in this community? It’s absolutely imperative that that's one of our focuses.
My organization has worked closely with the CEO Council and others on what's called the Regional Workforce Alliance, which is how are you structuring all of these systems to work together – and they need to be fast and they need to be flexible.
The traditional educational model of “you can get your certificate in a year and a half or two years” doesn't do a lot of good to somebody who's unemployed right now. So how do you develop more what would be called “earn-and-learn programs,” where people can get on the job training and could be in the classroom and working kind of at the same time. Because that's the sort of flexibility that's going to be needed.
As you continue to monitor data and economic indicators, like consumer spending and the housing market to gauge the recovery, what's your Outlook or expectations for the next months ahead?
Setti: It will be interesting to see what the holiday season brings around consumer spending. I am really concerned about our local retailers, because we were already having this kind of unfortunate shift to more online purchasing that was only made worse by the pandemic. So events like Black Friday and all of the holiday shopping, I think might have a different look.
I would absolutely encourage people to shop locally. That is one of the most important things – when people ask me, “What is it that I can do to help my community?” – it's to shop locally. A lot of our even our local retailers have an online presence, so that if you don't feel comfortable shopping like you normally did, you can order it online. Sometimes you can even have it delivered, but you could pick it up at the door or curbside.
So I am a little concerned just around that retail spending. Not that I think as Americans and as Peorians, we will likely spend just as much as questionable where we spend it and what that impact has on the regional economies.
But I am optimistic. We've done a really good job of in this region of keeping the impacts of the virus relatively low in our infection rate. So we haven't moved backwards like the Rockford region currently has, or in the Metro East region where there have been some additional restrictions placed on bars and restaurants and other sorts of activities. That's a testament to the great work of our public health departments, and also the citizens of the region taking this seriously. So we're on a good trend when it comes to that. So I don't think there are economic impacts or economic implications of any further regulation.
I'm excited that the University of Illinois has developed their Shield COVID testing for saliva, which I think as it gets out more and becomes more available probably after the first of the year, is something that allows people to feel a little bit back to normal – at least in large institutional environments like our universities and large employers. Because I think that, in the absence of a vaccine, that makes people feel more comfortable doing the things that they used to do in the ways they used to do them. I think more widely available testing that's rapid testing is going to be important to make people realize that the people around them are safe too.
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