Economics? Biggest loss is yet to come, experts say
By Jack Minch and Jennifer Swift New Haven Register
The biggest economic impact to Friday’s lockdown of Greater Boston is yet to come, said Northeastern University economist and professor of public policy Alan Clayton-Matthews.
Dunkin’ Donuts shops were the only businesses with permission to open in Watertown, and residents throughout Greater Boston were urged to stay inside, so the region ground to a near-halt Friday.
In Boston the MBTA shut down and Bruins and Red Sox postponed their games.
Restaurants and universities were closed in response to the search for Boston Marathon bombing suspect Dzhokhar Tsarnaev.
It is difficult to tell the value of the economic loss, said Jon Hurst, president of Retailers Association of Massachusetts.
“Certainly it is hundreds of millions including retail, restaurants and lost office productivity,” he said in an email. “Could exceed a billion.”
Jim Fitzgerald, the owner of Fit-Z’s Bar and Grill on Main Street in Watertown, said Friday afternoon his bar is a place for people to hang out, but he planned to remain closed until told otherwise.
“Friday is the busiest day of the week for us,” Fitzgerald said. “My friends have called, different people have texted to see if we’re open. But I’m friends with cops, and they’ve told us it’s not a good idea to congregate.
“Friday’s are a busy day for us; so is the weekend, but it’s not worth the risk. Just in case.”
Most of the money lost to business in the short term can be made up, said Northeastern University economist and professor of public policy Alan Clayton-Matthews.
It isn’t unprecedented for businesses to close on workdays, economists said.
Blizzards forced similar closures during snowstorms this winter, said Clayton-Matthews and UMass Lowell Economics Department Chairman Professor Michael Carter.
“In terms of the effect on business this is similar, but since the weather is nicer I think the rebound effect will be stronger,” Carter said.
Many of the people who work in Boston have salaried positions, and hourly employees will get the opportunity to make up the lost hours for shoppers who delay their spending, Clayton-Matthews said.
Some businesses such as pushcart vendors or convenience stores won’t make up the business.
“That business is just gone,” Clayton-Matthews said.
It will be especially difficult for restaurants that cater to the lunchtime crowd, Carter said.
The bigger impact will be on attendance at outdoor events later this year, where fewer people may go to those events out of fear of the danger posed by being in crowds, Clayton-Matthews said.
“People do seem to want to respond to this by being not afraid and not being afraid to be out, but I still suspect there will be some kind of effect later this summer in public open places,” he said.
Businesses and municipalities are likely to start adding security.
The impact will be worldwide, Clayton-Matthews said.
Runners and spectators at the Virgin London Marathon can expect to see increased security Sunday, he said.