Support local businesses
We can all still pull together while maintaining social distance
In normal times, Harrison Rusk would have spent last weekend at his son’s baseball games and treating himself to the Jon Pardi concert at the Houston Rodeo.
With those events canceled to curtail the novel coronavirus outbreak, Rusk instead spent much of his time Googling information about Small Business Administration loans, calculating cash reserves and worrying about whether his family’s auto repair shops would be considered essential or non-essential services in the event of a government shelter-in-place order.
“I think in a city like Houston, there could be an argument that an automotive business is very much essential,” Rusk said Wednesday from RMS Auto Care & Collision, a shop his family has owned and operated for 40 years. “But depending on the level of the health threat, there’s also certainly an argument it is non-essential.”
Welcome to the worries of a small business in the time of pandemic: How long can you stay open and will the choice even be up to you?
The debate is more than theoretical for Texas Restaurant Association CEO Emily Williams Knight whose members are reeling from Gov. Greg Abbott’s executive order Thursday banning sit-down service in restaurants, bars and food courts across the state.
Houston, Dallas and Austin had already made the move, leaving restaurants to convert, at least those that can, from dining in to takeout and delivery only.
Knight called the directives “catastrophic” for her industry: “We think a very high number of restaurants are not going to make it through this,” she said, adding that the lobby group is pushing for a national financial aid package to help restaurant owners assist employees.
Rusk and Knight are both concerned about recently passed legislation that requires businesses with fewer than 500 employees to pay for sick leave that the government promises to reimburse through refundable tax credits — within 90 days.
“Small businesses don’t usually have a three-month cash reserve on hand,” said Annie Spilman, state director of the National Federation of Independent Business, the nation’s leading small business advocacy organization. “Then you have the added expenses of setting up the program, the pressures from the bank for loan debt or rent payments to landlords, utility bills. And this is all happening when revenue is not coming in.”
No one is denying that paid sick leave is a good thing and a crucial tool in limiting the transmission of the virus, as is the case for eliminating crowds at restaurants and bars.
But these measures highlight the balancing act that the government must strike in aggressively fighting the spread of the coronavirus without doing long-term damage to the economy.
For starters, Congress needs to fix the paid sick leave provision so that businesses can more quickly recover those expenses and employees don’t have to worry about losing pay when they stay home sick.
The government at all levels needs to consider delaying tax payments, waiving fees and arranging for emergency bridge loan programs that provide speedy assistance, rarely a strong point for bureaucracies.
Although each affected business can get up to $2 million through an SBA Economic Injury Disaster
Loan, relief will take a while because Texas is just entering the program and applications take weeks to process.
Abbott made the right call last week when he issued a waiver to allow restaurants to deliver alcohol with food purchases, a little help for those trying to maintain their business through carryout and delivery.
Other leaders need to look at even modest ways they can help small businesses boost their income and remain in operation. Without businesses, there are no jobs.
And it doesn’t all fall on the government.
Knight said that some restaurants are trying to place their employees with grocery stores that are need of workers to deal with the surge in demand.
She also noted that Favor, an HE-B
company, has waived delivery fee commissions for restaurants until March 30. Grubhub and Uber Eats are waiving fees as well.
The rest of us can focus on supporting local businesses in a safe way. If you can afford it, order takeout today. Buy gift cards now to use later. Before ordering a book on Amazon, consider buying from a local bookstore, many of which are offering curbside pickup and free delivery.
We’re all in this together and it’s going to get worse before it gets better.
The Trump administration told reporters Wednesday that under a “worst-case scenario,” the unemployment rate could jump to 20 percent, twice its peak from the financial crisis. The highest rate was 24.9 percent in 1933, during the Great Depression.
Rusk says he will do all he can to keep his 32 “team members” employed.
“But, if this extends out, as the president said, through July or August, the truth is that we will have to make some very difficult decisions,” he said.
The rule of thumb is that for every $100 you spend at a local business, $68 stays in the local community. That’s why it’s important for the government, the private sector, business and labor to all pull together now — without violating social distancing.
Small businesses are said to be the lifeblood of the economy. Right now, they’re in need of a transfusion.