Economy in transition; reopening brings new reality
Rex Richards: ‘We are coming out of the lockdown pretty strong’
Jenn Watts started her tutoring and learning center out of her Hebron home in October 2018, focusing on kids with special needs and children being homeschooled.
By June 2019, Watts had rented a storefront at Country Square Plaza on the town’s north side and her business continued to grow. In March, she brought in a part-time tutor because she was overbooked.
“All of a sudden, we were put in quarantine” because of the COVID-19 pandemic, Watts said.
She tried working with children on the online meeting platform Zoom but found that didn’t work. Parents pulled their children out of the summer program she had planned. She considered a loan through the Paycheck Protection Program but was put off by the red tape.
“I had no guarantee that once that assistance ran out, I would be OK,” she said. “I figured it was time to just rip the Band-Aid off.”
She legally dissolved Watts Center for Diverse Learners so she could get out of her lease. The storefront is now empty and Watts plans to move her scaled-back business to her home, where she won’t have to pay $2,000 a month to cover overhead.
“I’m hurt. I need some time to heal right now,” she said, adding her family invested a lot emotionally and financially into the business.
As the economy slowly eases back and businesses begin to return to a new semblance of normal, the financial struggles because of the pandemic will continue in many sectors of Porter County’s economy for some time. While some businesses and jobs
will rebound completely, others will not, or not in their previous form.
There were 74 initial claim counts for unemployment benefits in Porter County the week of March 14, according to data on the labor market website Hoosiers by the Numbers, www.hoosierdata.in.gov. By the week of April 11, when schools and businesses here and across the country had shut down because of the new coronavirus, that number shot up to 2,472.
Since then, as businesses have begun to reopen, the number has dropped dramatically; there were 380 initial claim counts for the week of June 13, the most recent data available.
“It looks like the Porter County data is somewhat consistent with the trend we see in the state,” said Mike Hsu, an assistant professor of economics at Valparaiso University.
That number should continue to decline, he said, but the absolute number of claims is still pretty high, at a level that’s comparable to, if not higher than, what the county saw during the 2008 recession.
Porter County’s unemployment rate in March, according to the Indiana Department of Workforce Development, was 4.1%. That rate rose to 18.2% in April; county figures for May will not be released until Monday.
Despite the phased lifting of Gov. Eric Holcomb’s stay-at-home order, which is expected to be complete by July 4, many businesses are taking things more slowly, Hsu said, as are the consumers many of them rely on.
“(Businesses are) probably not expecting to return to normal any time soon so the need for workers is low,” Hsu said.
Policy also might be keeping unemployment numbers high, he said, because workers can receive an additional $600 per week, on top of their unemployment benefits, through the CARES Act, which expires July 31. That gives workers less incentive to return to work before those added benefits end.
Additionally, businesses are receiving incentives to retain workers rather than hiring new employees, Hsu added.
“These policies tend to slow the process of matching workers with jobs,” he said.
Rex Richards, president of the Valparaiso Chamber of Commerce, had a more positive outlook and noted Valparaiso’s diversified economy, which he expects will help it bounce back from the pandemic.
“There is no one industry or business that has an overriding dominance in our local economy so we are coming out of the lockdown pretty strong,” he said, adding that a number of niche businesses “have done very well.”
Restaurants in particular have suffered, though, he said, adding longstanding establishments that have done well over time have been able to maximize their ability to serve the public, while newer restaurants are struggling.
Still, someone driving down Lincolnway through downtown can see that most of the businesses are open, Richards said.
“Valparaiso has been very fortunate overall,” he said, adding a lot of the diversified manufacturing businesses have continued to operate, though those affiliated with the automotive industry experienced a slowdown.
What’s also hampering some businesses, he said, is disruptions in the supply chain, something he discovered when he and his wife found a wait of up to eight weeks to get a new washer and dryer because of factory closures.
“That’s a perfect example of the challenges businesses are having,” he said.
Porter County officials are expecting a mixed bag. Council
President Jeremy Rivas, D-2nd, said a high percentage of county residents paid their property taxes on time, despite a 60-day extension granted by the state. At the same time, revenue from income taxes is expected to drop because of job loss.
County facilities that host events, including the Memorial Opera House and the Expo Center, remain shuttered with their employees, except for the directors, on furlough. Summer cancellations include the 10-day county fair, which brought an estimated 150,000 people to the fairgrounds each year.
“This is going to continue to unfold so it’s hard to say right now what the full impact is going to be,” Rivas said, adding that impact might not be fully evident for another year or two.
The county has instituted a hiring freeze, backed by the council and the Board of Commissioners, among other measures to tamp down spending. Projects that were already in the works, including the renovation of county facilities and storm water improvements in South Haven, both backed by bond issues, continue to move forward.
“We’re going to have to be very cautious of how we spend until we get a better picture. The challenge is going to be not to overreact, too,” he said, adding county services and employees have to be protected.
Amy Lavalley is a freelance reporter for the Post-Tribune.