Updated: Apr 5
The Impacts of COVID-19 on Small Businesses
Small businesses aren’t making it. Even with the substantial support of PPP (Paycheck Protection Program) and other forms of monetary altruism by the government. As it stands, the country has been closed for too long. And the worst part is that we can’t change the severity of our situation.
The adverse effects that came with COVID-19 were truly devastating. Within America, let alone the rest of the world, civilians have suffered enough. Through quarantine, our rights have been infringed upon for the sake of safety, the economy has started to undergo recession, and businesses will not be the same.
To be frank, under the guise of returning normalcy, our communities may never be the same. In a study done by Main Street America, small, locally-owned businesses serve as the foundation for many districts all across the country.
In accordance to the report The Impact of COVID-19 on Small Businesses: Findings from Main Street America’s Small Business Survey, “Millions of small businesses will be at great risk of closing permanently if the crisis continues for several months”.
With the aftermath of the desolate customer base that businesses saw as a result of quarantine, many small businesses could potentially close as a result of financial insecurity.
Small businesses such as restaurants or local coffee shops have thin margins to cross. Unlike large corporations, small businesses need constant purchases to thrive since there is not a constant backbone of monetary build-up.
It is still imperative for businesses to pay overhead and other fees as well. Hence, with the addition of quarantine, the load of having to break even and be successful is a daunting task with the reliance of a strong customer base.
The longer COVID continues throughout the year, the more small businesses pay as a result.
Statistics found by Main Street America depict that “nearly 7.5 million small businesses may be at risk of closing permanently over the coming five months, and 3.5 million are at risk of closure in the next two months.”
The potential outcome of “closing shop” that many may face during the course of these next several months is seemingly becoming more and more of a reality as time progresses.
It’s alarming that shops we frequented, ordered the usual, and created fond memories could wither away. Not only do we as customers lose our favorite hotspot to go to on the weekends, but millions more will lose their job and face unemployment.
In order to keep businesses going, managers and overall authority are forced unwillingly to let go of their workers in an attempt to keep the business afloat, especially with the lack of revenue that comes in.
As a result of COVID-19, “1.6 billion is the number of people on the margins of the world economy that are in risk of unemployment which make up half the world’s workforce and it is far from certain that their jobs will reappear” (The Christian Science Monitor).
As it stands, the perpetual problem of job finding is only heightened at the hands of recent events and many are at the mercy of their jobs across the globe.
“More than 30 million people, 15% of the workforce” in America have started to apply for unemployment benefits. But how long can this last?
Workers who have been exposed to the coronavirus are forced to self quarantine for two weeks with “24% of U.S. civilian workers, or roughly 33.6 million people” having no paid sick leave (Pew Research).
Restaurants even consider or have been forced to execute the dire straits of closing down voluntarily. Owners feel that in current circumstances, this may be the only way to keep both their employees and the public safe.
Currently, according to the NCSL, “12 states and Washington D.C. require employers to provide paid sick leave benefits.”Policymakers should be able to address the urgent surge of employment with full fledged methods to mitigate the amount of fiscal hardship and other challenges that citizens have encountered.
Though the situation may seem like an uphill battle, the government is taking action to help American citizens.
With COVID relief legislation being passed, Congress has prioritized the highly influential topic of labor as well as employment. By passing the following acts and more to come, the government is able to provide workers the monetary relief necessary.
The Families First Coronavirus Response Act requires employers to grant employees paid sick leave for specific reasons with relation to COVID-19.
The Emergency Paid Sick Leave Act allows employees up to 80 hours of paid sick leave for COVID-19 related matters. This act correlates completely to the last as the employers give the benefits but with the addition of a set limit.
Lastly, as a result of quarantine, schools and other childcare facilities have shut down leaving parents no choice but to look after their children. If an employee of a business needs to look after their child, the Emergency Leave and Medical Expansion Act provides them up to 10 weeks of paid and 2 weeks of unpaid emergency leave.
These acts give employees benefits during a time where they are not in the condition to labor at full capacity or simply have no alternative choice with others to care for.
Meanwhile, in regards to small businesses, the federal government has issued many different proposals under the Small Business Act (SBA) of COVID-19. As a result of the sudden economic disruption, the government has issued the SBA to reinforce the foundations of recovery methods in the off chance another crisis occurs again.
Under the SBA, businesses are able to utilize recovery grants, debt relief, as well as loan programs. By having these protective measures for both businesses and employees, the government is able to bring many small businesses and citizens back to their feet.
Though this may not bring life as it used to be before the poignant COVID-19 pandemic, the American system will take the opportunity to solidify and grow resilient to prevent such economic casualties.