Business Musings: Holes in the Economy
I just saw an article this morning—which of course, I can’t find now—comparing the amount of news pouring at us right now to a DDoS (denial of service) attack. There’s so much news, every hour of every day, that we can’t keep track of it.
I’m keeping up, as best I can, on the virus and vaccine news. I’m scanning the political news, because I consider it related to virus and vaccine news. But the economic news—that’s almost impossible to keep up on, and right now, that’s as important as the virus news.
I’m simply not getting the answers to the questions I’m asking, at least not in any cohesive fashion. It leads me to believe the answers aren’t out there, not yet, but they will be over time.
Right now, everyone is struggling with their personal finances, even if they’re well off. (Well off people are looking at their investments, trying to figure out how to manage them.) Most people are struggling on a much more profound level than the investment level. Do I show up at my job for the paycheck and maybe catch this damn illness? Do I stay home and lose that job?
And so many jobs have left the economy altogether. As I write this, the June unemployment numbers here in the U.S. have just been announced. They’re abysmal, no matter what the president says. 11% unemployment is still above the crisis of 2008/9, where the unemployment stats hit 10% nationwide. When Trump came into office, the unemployment rate was 4.7% and had been steady there for more than a year.
By the time you read this, the unemployment numbers will be different. As the entire world knows, the U.S. is failing dramatically in its attempt (if you can call it that) to contain the damn virus. The jobs snapshot was taken mid-June. Layoffs accelerated this week, as many states shut down again.
In my search for actual numbers for this post, I got waylaid twice by things I hadn’t expected to see. Such as an article from Chalkbeat, which monitors public education news, that said half a million jobs were lost in public education in the spring, which I wouldn’t have thought, considering kids were still—technically—in school. But those jobs were support staff.
And I have no idea how many of those losses will be permanent. Here in Nevada, the budget shortfall for the state—which relies too heavily on tourism and gaming revenue for taxes—is at least 1.3 billion dollars (yes, billion with a “b”). I have no idea what other states are seeing, but I suspect it’ll be bad, whatever it is. The virus isn’t just having an impact on the human body; it’s having an impact on all of our finances.
I’ve been mostly keeping an eye on the arts, especially the performing arts. Broadway announced that it would be shuttered until at least January of 2021. Most of you may think that only applies to New York, but it doesn’t. That includes touring companies and regional theaters and a wide variety of sideways showcases. The loss of revenue in New York alone is somewhere around 14.7 billion (again with those “b”s) and that’s based on theater arts revenue. That’s not the loss of rentals for the theaters or money that would go to fabric stores for costumes or other side businesses no one thinks of.
In the New York theater community alone, almost 97,000 jobs are now on hold, or…possibly…lost. And that doesn’t count the dreams deferred, the wannabes who can’t even wait tables to hang onto their tiny New York apartment. The 97,000 are steady jobs, not those hand-to-mouth gigs that are in every arts town all over the world.
The Broadway shuttering was announced the same day that Cirque du Soleil filed for bankruptcy. Yes, it’s a reorganization bankruptcy and they will focus their newly reorganized business on Las Vegas venues, which is good news for my town, but if you knew how loved that organization is and how many fans it has and how it constantly fills seats here (and worldwide), you know how shocking that bankruptcy news is.
Cirque has had zero income since March. It furloughed 3500 of its employees at that point, struggling to keep the business alive. But now that we all know that in-person performances won’t happen for months and months, Cirque bit the bullet—and laid all of those 3500 employees off.
Some jobs remain, mostly here in Vegas, but the rest are gone. And Cirque did this “proactively” in that, they’re seeing the writing on the wall (the flashing neon lights from hell?). They have “entered into a ‘stalking horse’ purchase agreement with shareholders and debt providers which would provide $300 million into the restructured business to support a successful restart, provide relief for employees and partners and assume liabilities,” at least according to their press release.
Let’s hope that’s what happens. Until then, the performers are going to have to find other ways to pay their bills.
And that brings me to another hole in the economy. In March of 2019, a bunch of the writers who came to our in-person anthology workshop took part in Cirque’s annual charity run. (That’s the picture, above.) This afternoon, as I was digging through my email, I found this: Peer to Peer, a trade group for charitable events like the Cirque run, has a list of how the pandemic has affected charity runs, walks, and rides. This is the big stuff, like the St. Jude Runs and Walks or Susan G. Komen Walks for the cure.
It’s not the little runs that Dean and I have participated in all year, runs that benefit things like local Search & Rescue or the rare cancers run we do every February (all of the money going to Vegas kids). Those runs aren’t happening either, and while I’m getting emails for virtual runs and fundraisers, they’re not the same. I do what I can—I’ve done at least three virtual runs in the past month, but I know the numbers on those are way down.
These are the holes in the economy that I’m monitoring. And yes, I know much of this will return, but not in the same way. And some of it won’t return, at all.
Each of these billion-with-a-b numbers hides the true impact of what’s going on here: families unable to pay bills, lives changing drastically.
High school athletes lost their chance to impress on the ball field this spring. High school theater kids didn’t get to perform in their big show. Their older siblings have now returned home from those heady dream moments. In January, I talked to a 20-something who had his first professional theater job—and it was a doozy, in a Broadway touring company…that shuttered three weeks later. Where’s he right now? At home with Mom and Dad? Sitting alone in his crummy New York walk-up?
We’ve made changes too. Our business has scaled back. We did that at the beginning of the pandemic, angering some folks who thought we were overreacting. We cut projects. We’re in the process of closing our large office building, selling most of our collectibles, and renting two smaller spaces (one in Las Vegas—future home of the in-person workshops) and one in Lincoln City for the staff who still lives there.
We’re doing all right, because our business is built on many foundations, but we have lost one entire revenue stream. The in-person workshops are on hold, something we chose to do at the beginning of the pandemic. Like Cirque and other companies, we know that the in-person workshops will return, but there’s no point in marketing them now or even promoting future ones. We don’t know when we’ll be able to hold one again. Sometime in 2021, most likely, but when? None of us know.
Writers aren’t like musicians, who are dealing with their own ball of ugly. (Most musicians make no money on album sales; they made all of their income touring…which is not happening right now.) But some writers were making a small fortune on appearances—public speaking or talking as an expert to groups like Bankers’ Associations.
All of that revenue is gone and may stay gone. I saw an article—now lost to the DDoS information overload—that projected that a lot of conferences will never return. They either cost too much for no real gain or they are better online or the organizations that hosted them have gone out of business.
I’ve seen this before. One of our favorite writers conference, Southwest Writers Conference in Albuquerque vanished after 9/11. Their timing was bad (right in the middle of the grounded planes part of that horrid event, if I remember correctly), and they never really recovered.
We’re going to see a lot of that.
These economic holes won’t get repaired. They’re like potholes in a poor town. We’ll either bump over those potholes for years or someone will build a track around them. They’ll remain.
And I’m not sure what kind of impact that will have. I’m going to dig into the economics of it all, for my own sake, but what I do know is that the arts economy—hell, our world economy—will never be the same.
One of the major bright spots, though, is book sales, especially for indie writers. There’s not a lot that we can do as species right now that’s entertaining and fun. So we read. Our book sales have doubled. I know other indie writers are doing well also.
I also know that writers are getting discouraged and quitting because their sales are down—primarily because the books they have on the (virtual) shelf aren’t what the public wants to read right now.
But keep writing. Keep publishing. People will find the books they want to read.
We writers need to count our blessings. We’re not performing artists. Our work in the entertainment world depends on our ability to finish a novel or a short story, and then to get it before the public. That’s within our control. We don’t need our audience to sit in the same room with 999 other people. We can reach a global audience with the click of a button.
I know a lot of writers, seeing the suffering and death all around us, think that the work they do isn’t worthwhile.
But it is. The human species needs to relax. We make better decisions when we’re not stressed, when we have a chance to escape our world for a little while—not just in (restless) sleep, but through our imaginations.
Someone (again, lost in that DDoS of news) said that the only guidance we have in this strange new world we find ourselves in is fictional guidance. How did our fictional heroes deal with pandemics and economic collapse and apocalyptic disasters?
Fiction helps. It makes those struggling against great odds empathetic, much more so than the dusty history books that really hold the secrets of how the human race rises to the various challenges of existence. It’s better if some reader believes they can get through the day because their favorite fictional character made it through their even worse day. It’s good when our characters can be role models of survival or determination—or even if our characters simply go about enjoying life in a world that, for the moment, is out of reach for us.
I have no idea what these holes in the economy will do to the future. I suspect we’ll see indications of it in the next six months. I do know that Americans (finally) seem to understand that if we deal with this stupid virus, by doing simple things like wearing masks, staying distant, and staying home as much as possible, we will be able to reopen our economy at a level that will allow a large number of people to return to work.
I also know that the last things to return will be things like the in-person arts and large sporting events. We’re going to lose an entire generation of athletes and performers, who simply don’t have the financial wherewithal to take a chance on their own futures—or who will lose opportunities they might have had because of a grand performance in school.
The only thing I can do to help them is to give to various charities like the Actors Fund.
But I can provide a respite for people who need one, by continuing to produce fiction, and giving people a chance to escape.
We have no idea what the world will look like in a year. It will take a long time for all of us to figure out what’s going on outside of our little bubble of friends, family, and businesses. We have to assume that everyone is going through a rough time right now, and that their own prospects for a solid future—one they had imagined for themselves just six months ago—are bleak.
We can’t keep track of it all, so we keep track of what we can. All I can do right now is urge you to do a few things:
- Have compassion for the people around you—all of them. We’re very stressed out as a world right now.
- Write a lot and publish a lot.
- Wear a damn mask and stay six feet away from others.
Eventually, this DDoS attack of news and change will ease. It always does. When, none of us knows. We can only trust that we will get through this.
And we will get through it together.
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“Business Musings: Holes in the Economy,” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2020 by Kristine K. Rusch