Over a year has passed since local businesses first went into lockdown in response to the COVID-19 pandemic and, since then, economic recovery has been unsteady.
Business has picked back up, albeit with masks and vaccinations, easing the pressure on local stores. Alana Helms, a manager at the Santa Cruz jewelry store Super Silver, described the difference between their current sales and those of the early days of the pandemic as drastic.
“We were [staying open] just to stay afloat and to give our employees hours,” Helms said. “Once things opened back up, it opened the floodgates.”
Even though sales have gradually increased, labor shortages have become a challenge, and persistent supply chain issues may keep prices high for returning consumers.
A Shifting Workforce
The labor force in Santa Cruz struggled during the pandemic. Employment rates dropped across the board, but were steepest among workers earning the least, according to the Santa Cruz State of the Workforce study. Santa Cruz remains nine percent below its pre-pandemic levels of employment.
For those who remain in business, there have been distinct changes in how consumers interact with employees. Helms noted that customer service has changed dramatically over the course of the pandemic, contributing to low morale across staff.
“A lot of customers have been very abusive to staff, so as an employee it has been very hard on us emotionally,” Helms said. “We’re just trying to do our jobs […] we’re all human, we’re all trying to do our best.”
Surviving the Lockdown Economy
Business owners, too, faced a challenging lockdown. Santa Cruz’s local economy is driven significantly by tourism and the university — either through student labor and consumption or by companies involved in educational services— according to Santa Cruz Chamber of Commerce CEO Casey Beyer. Both of those industries suffered during the pandemic, as many tourists and students remained home.
The supply chain crisis that began over the past year exacerbated the economic difficulties many of the businesses faced. The effects of logistic labor shortages, as well as closed or reduced capacity factories, have caused massive strain to the international supply chain.
“It’s a global process where [stores] are running out of products,” Beyer said.
A Chamber of Commerce Survey from May 2020 revealed losses of up to $50,000 among nearly 46 percent of responding businesses in just the first two months of lockdown.
Annie Rains, owner of local retail business Cognito Clothing, described having to pay rent even as business wavered and products became more difficult to acquire.
Rains said that if she didn’t have extra funds, her business would have had a harder time staying afloat. In fact, she said that Cognito Clothing survived the pandemic in part due to a loan from the Small Business Administration and its low payroll commitments. Billions of dollars were distributed by the Small Business Administration through the Paycheck Protection Program, to help struggling businesses during the pandemic.
A Supply Chain Crisis Persists
While traffic in these stores has increased significantly since the beginning of the pandemic, the supply chain issues that have driven up prices and whittled down reserves persist.
“I couldn’t order what I normally carry, so I was running low on items. I couldn’t afford to have a back-stock,” Rains said.
The crisis shows no immediate signs of abating. Even as vaccines and masks curtail the spread of the virus, few measures can keep prices low as the sprawling global supply chain tries to recover from the devastating effects of the pandemic.