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Expert: It could take years for Indiana's economy to recover from pandemic

Ball State professor weighs in on economic impact
Holiday money-saving strategies that can backfire
Posted at 1:46 PM, Dec 01, 2020
and last updated 2020-12-01 19:31:05-05

MUNCIE — An expert on Indiana’s economy says local businesses are a huge part of our tax base, so losing them is a loss to all of us.

Dr. Michael Hicks is a professor at Ball State University and an expert on Indiana’s economy.

“Local businesses, in particular, small businesses are key employers throughout Central Indiana—comprising 60 or 70% of the non-governmental jobs in the region,” said Hicks. “If you're a consumer and you're buying good or purchasing services, you're likely doing so from a small business locally. The success of local businesses is a key ingredient of the economic health of the region."

Hicks said the businesses hit the hardest are those that rely on face to face services like restaurants, bars, and smaller retail.

“They have really faced strong headwinds, and I think that is the overall drag we are experiencing in the economy right now,” said Hicks.

Other industries are also feeling the pinch.

“It also extends to healthcare providers, dentists, lawyers who are seeing diminished foot traffic as people stay home and watch their dollars,” said Hicks.

Hicks said it will take years for our local economy to recover from the pandemic.

“The challenge is with so many permanent job losses, it's going to be 2, 3 maybe even 5 years before the full permanent job losses that we've had work their way out of the economy,” said Hicks. “So, it's going to be a long slog back to the normal of 2019."

Hicks said restaurant sales were sluggish even before the pandemic.

“I think the evidence is that it’s really been the virus, not the government shutdowns,” said Hicks. “Before the actions taken by Governor Holcomb, and before Indianapolis engaged in strict restrictions- we had already seen a huge drop in consumer spending in these industries, like 55% losses in restaurants. I think it’s the disease that’s causing the problems rather than the government restrictions, which are designed to make the disease less damaging in the long term.”

Keeping a mask mandate in effect will help businesses, said Hicks.

“I think the mask mandate is a critical part of this,” said Hicks. “I think the mask mandate makes it easier for businesses to remain open. It makes it easier for consumers to go to businesses, and I think without a mask mandate would have a much worse holiday shopping season and a weakened economy."

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