There is no doubt that the novel coronavirus has impacted the lives of people around the globe. What’s just as unsettling is that this pandemic has hit Main Street U.S.A. just as hard. Today, we are going to examine the potential short term impact of this virus on small businesses in our region and see how this may influence our regional and national economy in the months and years to come.
You don’t have to drive far to see shops that are closed, businesses that are working remotely, and restaurants that are doing “take-out” only. It can be frightening to witness the changes that have occurred in just a few short weeks of state mandated quarantine and social distancing.
Exactly how has this new normal impacted our regional economy? Here is a closer look at two of the main concerns of economists.
Loss of Jobs
The Economic Policy Institute is predicting that the disease outbreak could potentially wipe out millions of jobs from the U.S. economy before this summer. This financial uncertainty has many people scared about their future ability to pay their rent, mortgage, and other monthly bills, let alone put food on the table for their family.
American workers are already feeling the pain. Initial unemployment claims for the week ending March 21 soared to 3,307,000, nearly 15 times higher than the 211,000 claims filed just two weeks before and shattering the previous high of 692,000, reached in 1982.
Decline in the Number of Small Businesses
The nearly twenty-seven million small businesses in the United States generate about 50% of our Gross Domestic Product (GDP). They also contribute to growth and vitality in several important areas of economic and socio economic development. In particular, small businesses do the following:
- Create jobs
- Spark Innovation
- Employment Opportunities and financial stability for marginalized groups
A recent Goldman Sachs survey of more than 1,500 small business owners found that more than 50% of them said they didn’t think they could continue operating their businesses for more than three months amid the current conditions caused by the coronavirus outbreak.
Now, more than ever, businesses need to check in with their national, state, and local small business associations to find out what can help them stay afloat during this very unsettling time. Please check the SBA of Boston or your local chapter to find out more about Coronavirus Business Relief.