Shutdown: The lunch-hour effect

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The winners and losers in the Minnesota government shutdown were on display in downtown Saint Paul today.

Winners: There was no waiting at high noon today at the restaurants and fast-food joints in the city’s Town Square and plenty of tables available in the usual free-for-all in the seating area.

Losers: Restaurants and fast-food joints. Not since the disastrous Republic National Convention in 2008, have the locals seen such a drop-off in business. The manager of a coffee shop told me this morning business was about half what it usually might be.

Why the impact? The Minnesota Department of Public Safety, the Driver and Vehicle Services office, the Department of Agriculture, and the office of the attorney general are among the bigger state agencies located in downtown Saint Paul.

  • Disco

    But government doesn’t create jobs nor wealth. That’s what I’ve been told. Have I been misled?

  • jon

    Disco,

    Of course the government doesn’t create jobs… There are just 50,000 or so (source) jobs that they have always had that aren’t there right now…

    But they’ve always been there, none of them were ever “Created” Just like how humans have always been here, and evolution is a scam thought up by the radical left.

  • Al

    Disco, you stole my line almost word for word! I’ll have to be quicker on the draw next time.

  • Kassie

    Don’t forget the Dept of Human Services at 10th and Cedar which is now mostly empty.

  • matt

    Disco,

    You have not been misled. If you walk down a street and throw a rock through a window of a bakery, the shbaker must then pay a glass company to replace the window (a job is created) that is what is seen. In order to pay for the window he must sell 6 more loaves of bread. What is unseen is what the shop owner would have done with the proceeds of the 6 loaves had the window not been broken. Perhaps he would have purchased a pair of shoes (creating a job). So now the shop owner has a unbroken window and no new shoes. You have not created a job by throwing a rock you have deprived the baker of new shoes in order to replace a window that was perfectly servicable before you came along. (if govt services being portrayed as broken windows offends your sensibilities replace it with bank bailouts, war, public transportation, Alaskan bridges or per diem for Minnesota legislators) — hat Tip to Basiat.

    Bob makes a similar error in confining his discussion to restaraunts who are temporarily affected and calling this a loss on that end. Clearly the 22,000 people that are not working today will still eat, so food is still being sold the winners are just not as apparent.

    In the end the taxpayer will be on the hook for unemployment benefits or back pay if it is granted. Dayton and the Republicans have simply decided to break another window.

  • Bob Collins

    //Bob makes a similar error in confining his discussion to restaraunts who are temporarily affected and calling this a loss on that end. Clearly the 22,000 people that are not working today will still eat, so food is still being sold the winners are just not as apparent.

    It’s only a mistake had I said that all restaurants and the economy are losing money everywhere because of the shutdown, but I didn’t say that. What I said was the winners and losers were apparent in one location of one city at one lunch hour.

    Period.

    Asserting otherwise is like objecting to the fact you can’t get a table at a restaurant in Minneapolis because I said there was one available in Town Square today.

    Again, on the unemployment benefits, unemployment is a tax on employers. It’s not an extra penalty. The tax has already been paid. The pool already exists exactly for this purpose. It’s not a gift from the taxpayers of Minnesota. It’s just that in this case the employer is the state.

  • matt

    Bob,

    Based on Disco, jon and Al’s comments it would appear that your intended message was not received the way you say you intended it as they speak of broad concepts such as jobs as compared to your narrow focus of one hour’s receipts in one area. Based on simple facts you are correct, based on framing the conversation it appears you may have missed.

    UI is paid by the employer but is considered to be an employment cost. Like everything else employment decisions are made at the margin of total costs – if salary+benefits+employer FICA+UI exceed expected gain you do not hire. Since most Minnesotans are employees – they are paying the taxes through decreased wages. Writing the check does not equal tax incidence, nor does the timing. Again, you hit it correctly on the facts but you miss by a long shot in the framing dept.

  • Bob Collins

    //Based on simple facts you are correct, based on framing the conversation it appears you may have missed.

    If you’re all having a nice, intelligent conversation about the “mays” and “may nots,” I didn’t.

  • matt

    ;-)

  • http://www.bymaggie.com Maggie

    It’s very similar to how Lowertown is getting hit by the light rail construction. Those restaurants like Bulldog and Barrio are losing thousands of dollars a month because no one’s willing to take the walk through the construction zone to get to them. And those folks who were intrepid enough were probably state workers.

    And the NFL wants to add a tax to St. Paul businesses to build a new stadium. HILARIOUS.

  • Al

    \\Clearly the 22,000 people that are not working today will still eat

    For how much longer, Matt? And are they spending as much on lunch today knowing they may not have a paycheck?

    \\Based on Disco, jon and Al’s comments it would appear that your intended message was not received the way you say you intended it

    I didn’t claim to use Bob’s statement as he intended, nor would I claim to know what he intended. I was simply making my own statement (or rather seconding disco’s) based on what I read, directly relevent or not.

    \\if govt services being portrayed as broken windows offends your sensibilities replace it with…

    or replace it with firefighters, police officers, teachers, water testers, sewage treatment plant workers, road construction and maintenance people, judges, corrections officers, consumer protection officers, public transportation workers, emergency management officials, public health officials, food inspectors…

    Matt, you may claim to rely on no government services and be completely self-sufficient. Perhaps you should move to some totally isolated area and live off the land unencumbered by those pesky other people who choose to pool some of their fortunes in what we call society.

  • Snyder

    It’s not just downtown in St. Paul, either.

    My agency is located over on Lafayette Road N in a cluster with three others. That’s at least a few thousand people that are no longer going out for lunch or stopping for morning coffees or going out for happy hours after work while we sit at home and wait for this shutdown to end.

  • matt

    @Al,

    #1 – I was responding to Bob’s writing that downtown St. Paul restaraunts were being hurt by the downturn by offering that the purchase of food did not go away, it is simply less concentrated in downtown St. Paul now. Clearly unemployed people cannot maintain the same food budgets as they could when employed. But it is very important to note that because of unemployment benefits and retro pay we are not looking at the huge loss that Bob’s narrow story shows. If those state workers represented the entire economy and their spending, be it from paychecks, insurance proceeds, savings or other means was the full “product” of that economy it would not drop by a huge % based on the shutdown. Alternative funding and time shifting of the payment for goods (savings/credit) will result in proably no more than a 10% temporary change to the economy. So Bob presents an isolated story, which he states is only an isolated story, but on the macro level, as state economist Stinson has indicated, this will not bring things to a halt in Minnesota.

    #2 – Conceded. But had the article focused on how golf courses were seeing increased sales based on some laid off state workers having a more time to pursue hobbies it is doubtful that you or Disco would have commented on how the shut down is good for golf course employment.

    #3 – yes you can include all of those govt employees as well. In that case you have just chosen a good that you would have already paid for and made it a monopoly supplied good. If the govt did not provide sanitary sewer would you simply just fill buckets with dirty bathwater and let them sit in your backyard? No you would pay someone to dispose of the bathwater. No “new” job has been produced.

    #4 I am all for pooling my resources, I do it all the time in my family, with friends and with people that I do not even know. The difference comes when I am told that I cannot get out of the pool and that resources that I am sharing can be used to kill other people or that more of my resources are needed to sustain other people – not because they cannot afford to pay – but because they are too important (banks, auto worker unions, oil companies, etc.).

    Being anti-state does not make one anti-social any more than being atheist makes one immoral.

  • vivian

    matt-

    I appreciated your story. Someone threw a brick through our window. Another year of the same shoes. :- (

  • Vivian

    // And those folks who were intrepid enough were probably state workers.

    And the NFL wants to add a tax to St. Paul businesses to build a new stadium. HILARIOUS.

    The intrepid willing to TRESPASS for a sniff or plucking of a lovely delphinium on the way to those establishments.