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Trump wants to reopen the economy May 1. What’s the plan for Massachusetts?

Business leaders and economists urge caution in face of uncertainties

The streets in downtown Boston were virtually empty a day after Governor Charlie Baker issued a stay at home advisory for all non-essential workers.
The streets in downtown Boston were virtually empty a day after Governor Charlie Baker issued a stay at home advisory for all non-essential workers.Jessica Rinaldi/Globe Staff/file

President Trump is eager to reopen the economy ASAP, raising the stakes in what amounts to a colossal race against time: Can the deadly coronavirus be contained fast enough to spare businesses and workers irreparable financial damage?

As Massachusetts approaches its peak of the pandemic, it’s hard to see a scenario anytime soon in which stay-at-home orders are relaxed and commerce comes roaring back, according to business owners, economists, and public officials. And they say it would be folly to circle any date on the calendar — Trump is aiming for May 1 — before the virus shows signs of subsiding, and some national coordination is broadly agreed upon.

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“You don’t need a date. You need a plan,” said Harvard economist Jason Furman, who served as a top economic adviser to President Obama. “There is no plan right now.”

As much as the White House would like to think it calls the shots on jump-starting the economy, the real decisions about when — and how — will be driven by the very people who first closed schools and shuttered businesses: governors and mayors.

While Massachusetts was among the first wave of states to implement strict social-distancing measures nearly a month ago, Governor Charlie Baker has bristled at questions about when to restart the economy, which has suffered record job losses. He insists his focus is on managing an unprecedented health crisis that has sickened more than 25,000 people statewide, taken at least 756 lives, and is expected to get worse before it gets better.

“I don’t want people to get ahead of themselves on this one, OK?” he said Friday. “We are about to have a very difficult couple of weeks here in Massachusetts.”

The administration, though, has taken the lead on so-called contact tracing, teaming up with the Boston-area nonprofit Partners in Health to hire 1,000 workers to track down people who’ve come in contact with a confirmed COVID-19 carrier. Once found, those people can quarantine, potentially reducing the spread of the disease.

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That, along with widespread testing, is what economists, business owners, and epidemiologists say is needed so people can resume the daily rhythms of life, such as taking public transportation or eating in a restaurant, without fear of infection. Knowing who has COVID-19 and who’s immune will be essential, at least until a vaccine is available.

While tests are underway in Massachusetts, it’s unclear how broadly they can be rolled out. Opening up the economy too soon, when consumers and companies don’t feel comfortable, makes little financial sense and may lead to a resurgence of the virus.

“We have only one chance to boot up,” said Simon Johnson, an economist at the MIT Sloan School of Management.

Jay Ash, head of the Massachusetts Competitive Partnership and Baker’s former top economic development aide, said his members — some of the state’s largest companies — are closely monitoring their operations in China and Europe for clues on how reopening might work here.

Still, Ash said, it’s premature to plan a restart of the economy here with so much uncertainty about testing, tracking, and the effectiveness of the federal government’s trillions of dollars in rescue funding.

“I don’t really know what problem I’m solving for yet,” Ash said. “Until I know the full extent of the problems, and the tools available, it’s tough to say exactly what steps will be necessary.”

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Wuhan, the Chinese city of 11 million where the coronavirus first emerged in December, only last week ended a travel ban that had been in place for more than 10 weeks. Officials made the move after just a handful of new COVID-19 cases emerged over the previous three weeks.

However, some restrictions remain in force. While shops and other businesses are reopening, Wuhan’s schools are closed, and residents stay in their homes as much as possible. People must present proof that they are healthy to travel around the country.

In Europe, governments running the continent’s biggest economies are debating how and when to reopen. On Saturday, Spain said construction and factory workers could return to their jobs after the Easter holiday. Still, Prime Minister Pedro Sánchez said the country, which has seen the second-most COVID-19 deaths in Europe, will not lift its broader lockdown.

Italy remains under a national lockdown, even though COVID-19 cases peaked on March 20, according to a Johns Hopkins database. Some 18,500 people have died in Italy, second only to the United States.

Last week, Italian Prime Minister Giuseppe Conte rejected a plea from businesses to resume operations, saying scientists have told him restrictions need to remain in place.

Dr. Anthony Fauci, the top US infectious disease expert, said Sunday that the economy in parts of the country could be allowed to reopen as early as next month. He told CNN’s ‘‘State of the Union’’ that “rolling re-entry” will be required, based on the status of the pandemic in various parts of the country.

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When the local economy does reopen, some parts will bounce back faster than others. Many professional services firms and technology companies, for example, have kept busy because they can do a lot of work remotely.

“Tax season is normally a whole craziness unto itself,” said Norman Posner, whose accounting firm, Samet & Co., has offices in Chestnut Hill and Brewster. Now, the firm is also helping clients sort through government loan programs and the new realities of the economy.

The hospitality industry, however, faces a long road back. With travel restricted and major conventions canceled through June, many Boston hotels have closed, laying off or furloughing thousands of workers. While Baker’s order that shuttered nonessential businesses expires May 4, some hotels don’t plan to reopen until June or July, reflecting how business will be slow to return and how difficult it might be to ramp up staffing and prepare properties.

Martha Sheridan, CEO of the Greater Boston Convention & Visitors Bureau, does not anticipate a normal summer of tourism. She expects air travel to remain depressed; Logan Airport reported a nearly 97 percent year-over-year drop in departing passengers for the week ended April 5. The visitors bureau instead will focus its marketing on tourists who can arrive by car.

While Sheridan wants to see her industry in full swing again, she said there are risks to jumping the gun.

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“I can’t imagine getting rolling again, getting these massive hotels open, and getting these flights up again, and then all of a sudden stopping,” she said. “It has to be managed with continued growth without any backpedaling.”

Other industries may rebound faster, even if they don’t quite look like they did before.

Construction — currently paused in Boston, Cambridge, and Somerville — could come back if big contractors figure out a way to ensure workers will be safe. But projects are likely to take longer to complete, as safety measures make job sites less efficient.

Office workers could return to their buildings, too, but to new setups.

“The idea of packing as many people as possible into office space may not be so popular,” said Aaron Jodka, head of research at the Boston real estate firm Colliers. “People could be in bigger cubes and workstations where you can’t just reach out and touch your neighbor.”

Other industries might thrive in a world where coronavirus remains an ever-looming threat.

Rick Faulk, CEO at the warehouse robot-maker Locus Robotics, said he plans to hire about 70 people to supplement his current staff of 110. The disastrous slump in brick-and-mortar retail has been accompanied by a boom in e-commerce (see Amazon). That means more robots to help ship the goods, Faulk said, and the people needed to design and build them.

“There’s a tremendous amount of hiring going on in the logistics space,” he said.

And there are some industries — big ones in Boston — in which it’s just too soon to know what the toll might be.

Colleges and universities quickly sent students home as the outbreak emerged last month, but with tuition already in hand, most have been able to keep their payrolls largely intact through this academic year. However, if students cannot return to campuses en masse in the fall and instead continue with remote learning only, that could lead to drastic cuts.

That scenario could also ripple through the Boston economy, which counts on college students as consumers. Think of the bars, restaurants, shops, and landlords of apartment buildings in student-heavy neighborhoods.

“If we don’t bring students back, it’s going to be a much more painful recovery,” said Jason Gell, president of the Greater Boston Association of Realtors.

Hiawatha Bray of the Globe staff contributed to this report.




Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com. Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan. Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.