How will lockdown impact the economy?

Written by on September 14, 2020

“Right now, I can see one third of the stores on Dizengoff Street are closed,” Ellie Green of ‘Green Brothers Bookstore’ told the Post, ‘but eventually people want to live in a big city.’

Shoppers wear face masks and walk around a fashion shopping center in Ashdod, as restrictions over the coronavirus disease (COVID-19) ease around Israel, May 5, 2020 (photo credit: REUTERS/AMIR COHEN)

Shoppers wear face masks and walk around a fashion shopping center in Ashdod, as restrictions over the coronavirus disease (COVID-19) ease around Israel, May 5, 2020

(photo credit: REUTERS/AMIR COHEN)

The government-imposed lockdown starting this Friday threatens to crush some businesses, among them restaurants and gyms, and benefit others, like alcohol and food stores – as the nation shops ahead of the holidays. What seems clear, several business owners told The Jerusalem Post, is that the future is here, and it belongs to those who have an effective web presence and logistics services.

“We are the only independent bookshop to stay open all this time,” Ellie Green, owner of The Green Brothers bookstore, told the Post, “because we have a good online catalogue and, right before the first lockdown, we stopped working with the postal service and switched to a private delivery company.”

The results had been excellent.

“People couldn’t come in and open a book but they bought online,” he said. “Sales were so good we actually began to run out of books.” The Green Brothers offers second-hand books, so with a curfew in place, he was unable to drive and buy from people.

“People began calling us after the lockdown because they wanted to get rid of some books or maybe make some cash,” he said. “I think the biggest change was the virtual one: Whole new age groups are now buying online, including my mom.”

In a study released by Start-Up Nation Central on Monday, they predicted that the increasing scope of digital sales will translate to an increase in cybersecurity needs, and that coronavirus is destined to usher in “a new digital age.”

The study recommended that Israel offer financial incentives to ensure that hi-tech decision-makers will opt to remain here instead of relocating, and to fund educational programs encouraging women and other groups to enter the hi-tech market.

The study mentions national strengths such as AI, ag-tech and the Internet of Things (IoT), all of them crucial for the not-so-distant future. But what are regular people supposed to do until the age of the flying car?

GREEN WAS careful to note that businesses he enjoyed had to close, too, and he himself had to let five workers go since the store needs only one worker to pack books for deliveries.

“Right now, I can see one third of the stores on Dizengoff Street are closed, and that is sad,” he said. “However, I think COVID-19 ended businesses that were tourist-dependent or were just barely hanging on.”

He did notice that young people are moving out of the city, but thinks that “eventually, in a year or two, Tel Aviv will bounce back. People want to live in a big city.”

This is a much larger issue: that COVID-19 has disrupted the notion that people, young and old, would prefer to pay more rent to live close to work in a city.

If your university offers remote classes, but no face-to-face ones, what’s the point of moving out to a city when you can stay in your hometown or live with your parents rent-free? Or if your boss tells you to work from home, why should you rent in Tel Aviv and not in a moshav up North?

The economic drop felt around the world has a “bad news” aspect. Cities are becoming empty of their creative classes and full of cheap food chains, while high-end culture is decreasing and closing down. Opera singers and actors can’t be expected to hang on forever if they can’t do the things they worked so hard to learn how to do.

The “good news” – or at least the futuristic news aspect – is an Israel where people work from home and rely on a much better network of delivery and public transportation to get their needs met. For the sake of argument, why visit a fancy restaurant and waste time in traffic when you can get the chef’s special delivered to your doorstep?

Green noted that he got a tax break from the city and that two of his landlords were willing to offer him a skip on rent.

“I also see hair salons moving 10 meters down the street,” he said. “It’s poetic justice. For years we overpaid to work here. So now people are [renegotiating] their leases, knowing that, unless they get a better deal, there’s an empty building with an owner who will be happy to accommodate them.”

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