Point of view matters, perhaps now more than ever.
Indeed, panelists at Providence Business News’ Economic Trends Summit on Feb. 18 painted very different pictures of the devastation wrought by the COVID-19 pandemic and the way out, dependent upon industry, business size, location and other factors.
While keynote speaker and panel moderator Thomas Tzitzouris, director at Strategas Research Partners, criticized federal aid as “overstimulating” spending and creating a “lasting legacy” of inflation, panelist Mark K. W. Gim, president and chief operating officer at The Washington Trust Co., framed it differently.
Acknowledging Tzitzouris’ view of “overly accommodative” federal support, Gim urged attendees of the virtual summit to consider other perspectives. As the federal government tries to extinguish the metaphorical inferno of the pandemic, it may not be as concerned with aiming its firehose too specifically, as long as it puts out the fire, Gim said.
And for hard-hit small businesses such as the ones using the Westerly-based bank to apply for Paycheck Protection Program loans, government relief programs are a “lifeline,” Gim said.
Using another analogy, he said, “If the medicine doesn’t taste good but it helps the cure, maybe that’s an ill we have to accept in the short run to get to a more stable place in the long run.”
Another panelist called for more targeted spending of future stimulus dollars, particularly to help Providence’s tourism and hospitality industry. Kristen Adamo, CEO and president of the Providence Warwick Convention & Visitors Bureau, said that while southern Rhode Island and its beaches are poised to benefit from an expected travel rebound, the capital city is set to see another summer of major losses.
‘I feel like I’m yelling that the sky is falling, but in Providence, it really is.’
KRISTEN ADAMO, Providence Warwick Convention & Visitors Bureau CEO and president
That’s because the urban core’s tourism is driven by large-scale entertainment and corporate events, none of which can return without mass vaccinations.
Also a problem is the lack of access to the R.I. Convention Center, which since early on in the pandemic has been outfitted to be a field hospital and testing facility. It could take more than two months to convert the building back to a convention center when the time comes, which will exacerbate the city’s ability to bounce back, Adamo said.
“I feel like I’m yelling that the sky is falling, but in Providence, it really is,” said Adamo, estimating that the city lost $70 million in direct spending in 2020 from events booked through her organization that have been canceled or postponed, about $50 million of which came through events at the convention center.
Some state programs, such as the Take it Outside grants administered through the R.I. Commerce Corp., helped her industry survive. But others such as the Rhode Island Hotel, Arts & Tourism Grant Program, also through R.I. Commerce, came too late in the season to make much difference, Adamo said.
That the state economic development agency has not yet hired a top tourism official in the nearly 10 months since the former chief marketing officer stepped down is also a concern, Adamo said.
Gim, meanwhile, thought R.I. Commerce should focus on workforce development through education, skills training and even the housing that workers will look for if they move here. The pandemic’s impact on low-wage jobs has been significant, he said, and the state should take the lead in efforts to retrain these workers in industries poised for growth.
Alden Anderson Jr., senior vice president and partner for CBRE/New England, touted the “think outside the box” strategy Commerce Secretary Stefan Pryor and former Gov. Gina M. Raimondo implemented through inventive public-private partnerships and tax credits to major employers as one he hoped to see continue.
Some sectors have held their own, or even thrived during the pandemic. Among them is residential real estate – partly because of low interest rates, Gim said. And home improvement businesses are seeing a boom, too.
Another success story is the industrial sector, thanks to the huge demand for e-commerce, Anderson said.
Evidence of that can be found in the $300 million retail distribution facility proposed for Johnston. Amazon.com Inc. is rumored to be behind the project, and if approved, the facility will be 3.8 million square feet and employ 1,000 workers by its estimated 2023 completion date.
Anderson named growing the state’s supply of fully permitted, “pad-ready” industrial warehouse space as an important way to capitalize on this economic shift, noting the lack of available industrial space as a barrier to economic development, and the tight supply – the vacancy rate stood at 1% – could get tighter this year because there are already deals in progress.
Another topic, brought up by an audience member, further illustrates the divide across industries.
Advocates say raising the minimum wage is long overdue and especially important right now to help the low-wage workers hurt most by the pandemic.
The increase might help a restaurant worker, for example, but would very likely hurt the owners of the restaurant itself, which generally operates on such narrow profit margins that dramatic wage hikes may not be feasible, Adamo said.
Tzitzouris also cautioned against dramatic wage increases, which will squeeze small businesses that don’t have the ability to pass on the higher costs to customers.
“It encourages the substitution of capital for labor,” he said, adding that a gradual increase to $15 per hour by 2025 would be manageable.
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.