By February 22, 2007

Possible economic impact on ‘social businesses’ due to avian flu in the US

With the notable exceptions of Costco, Wal*Mart/Target and the grocer, every store I frequent is what I call a “social business.” A social business sells luxury/optional goods or services. A restaurant, coffee shop, tanning salon, shooting range, doggy day care, bowling alley, roller rink. A vast majority of my time, and my income, go to these types of places. There are social businesses I don’t frequent, but are worth mentioning, such as “browser-friendly” bookstores like Barnes & Noble, a movie theater, or if you zoom out high enough, a mall.

As I was sitting in Starbucks a few days ago, I got to thinking how many people come through there every day. How quickly would a human-to-human H15N (avian flu) transmit in the small storefront, with people crowded around each other while they ordered and waited for their drinks? One outbreak, or the threat of an outbreak, could be all it took to make my local Starbucks a ghost town. Infection, or the fear of infection, would put many of the social businesses I frequent in economic jeopardy.

Some larger chains, like Starbucks, can probably weather the H5N1 storm financially. Sure, they’d lose a significant amount of revenue if they had to close up for three to six months in a worst case scenario, but as a corporation it would survive. I imagine most of the employees would be laid off. I’m also worried about smaller chains and local businesses. We enjoy going to a local-chain Italian restaurant, I think they have three restaurants in our area. I doubt they have the cash necessary to suspend operations for half of a year. In the case of a true “mom and pop” joint like our doggy sitter, she may be operating quarter-by-quarter. We already know that H5N1 can transfer from birds to felines and canines. If we see a serious outbreak of H5N1 here in the States, it may not take the theoretical human-to-human vector to economically ruin her store.

On the other hand, as social businesses decline in the presence of a pandemic, virtual businesses may thrive. Aside from groceries, there is very little that I need that I couldn’t buy online. Discounting any short-term (two weeks or less) disruption in food delivery to grocery stores, I think the country would right itself from a supply perspective. Unfortunately, with a number of Americans employed by social businesses out of a job, who knows how many of us could afford to buy what’s on the shelves. I couldn’t find a direct answer, but I wonder how many Americans work in the service and retail industries that would be affected by an H5N1 outbreak.

Even more difficult to measure is what would happen if human care centers stopped operating. Most (if not) all of my co-workers use daycare for their children, or rely on schools to keep their children occupied during business hours. The CDC has already issued a guideline suggesting public schools close for three months during an H5N1 outbreak, and I am assuming that day care centers would either close, or fold from frightened parents not bringing their children in, and then close. Adult/retiree care may also suffer, although I would consider their potential infection vector lower than those involved in taking care of anklebiters.

When discussing disaster preparedness with my friends, I have said that one disaster isn’t going to forever change our society. It’s a compound disaster situation that could really threaten to fuck things up. Pandemic illness + economic recession puts today’s credit-dependent Americans (myself included) on a knife’s edge. Add one more thing into that mix, such as a natural disaster and we’re in for a very long, sad ride.

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Posted in: gibberish, preparedness

4 Comments on "Possible economic impact on ‘social businesses’ due to avian flu in the US"

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  1. Markie says:

    Someone must have some mathematical models of this type of spread/scenario. Hell, we did operational studies at starbucks during MBA school to determine optimal workflow and such, but the same thing could be said, with populations and disease transfer rates…

    The impact would be wide, and I am not sure exactly what would happen, but I would try to work out of the house for as long as possible.

    Markie

  2. If there’s a pandemic, though, deliveries may not happen, if drivers are too sick or scared to go into certain regions, or the people operating gas stations are out sick.

    But you’re completely right that pandemic + economic recession could mean a lot of misery and a long time recovering.

  3. drfaulken says:

    I think things would have to be in super bad shape to stop deliveries. Compared to the close personal contact of “social” businesses, deliveries are practically disease free. The absence of ringing someone up in a delivery scenario would reduce infection possibilities, for example. Deliveryfolk would wear N95 or better masks, wear gloves, and be in pretty good shape.

    These days, you don’t even have to sign for packages most of the time, so the delivery person may never see the recepient, or vice-versa, let alone physically interact with them.

    The gas station issue is a strong concern. However, I believe FedEx and UPS have their own fleet refuelling stations and wouldn’t be as affected as the Exxon-Mobile on the corner.

  4. Ed says:

    Actually I suspect impact upon deliveries would not come from fear of delivery drivers getting sick from clients, but from the main warehouse (which has a lot oe employees) and dispatch areas being a disease vector. But there must be examples and reports on this. What happened back in 1918?