America's job recovery is at a crossroads
New York (CNN Business)Tim Burgess came up with creative ways to keep his Charlottesville, Virginia, restaurants running after reopening in May, following a nearly two-month shutdown during the pandemic.
He expanded outdoor seating at his two full-service restaurants, Bizou and Bang, by taking over nearby parking spaces and an empty lot next door. As the weather cooled off, he installed heaters and tents with roll-up sides. While restaurants in Virginia can now serve limited numbers of customers indoors, Burgess’ restaurants will remain outdoors-only, out of concern for his staff and customers.
But as Burgess thinks about how to keep the business afloat in the coming months: “We keep thinking of Game of Thrones — winter is coming,” he said. “We’re staring at winter, and we’re scared.”
It’s a concern shared by business owners across the country, as colder weather and the possibility of converging flu and Covid-19 outbreaks threaten the makeshift operating models that have helped keep revenue flowing during the pandemic. Still other business owners have yet to be able to safely reopen at all, like Scott Hammertree of Grand Rapids, Michigan, whose concert venue, The Intersection, has been closed since March.
“I’m 48 years old, I am an owner of this business, and I am now accepting unemployment,” Hammertree said. “I can’t do delivery or takeout for concerts … We have zero revenue and still have to pay rent, taxes, utilities.”
Such concerns have left business owners wondering what more they can expect in the way of government assistance — financial and otherwise — especially after the Paycheck Protection Program ended months ago. Those questions have intensified following a recent breakdown in talks on Capitol Hill over a second round of stimulus.
The type of help that business owners can expect may depend in part on the outcome of the election: Republican President Donald Trump and Democratic challenger Joe Biden have presented differing visions for how to repair the economy and help businesses recover.
How Trump and Biden plan to help
During the first presidential debate, Trump and Biden laid out starkly different plans for helping businesses survive.
Trump’s vision centers on reopening the country as quickly as possible, a call he has made repeatedly that is at odds with the guidance of health experts.
“People know what to do — they can social distance, they can wash their hands, they can wear a mask, they can do whatever they want — but they’ve got to open these states up,” Trump said. “People want their schools open. They don’t want to be shut down. They don’t want their states to be shut down. They want their restaurants.”
I'm scared. I would like to shut my restaurant, I would like to be closed until this thing is under control."
The President repeated claims, which have been questioned by health experts, that a coronavirus vaccine would be ready soon. He said that the military is “all set up” to deliver the vaccine around the country.
Biden, by contrast, emphasized a desire to get the pandemic under control, and to provide funding to help businesses reopen safely.
“We should be providing all of the protective gear possible,” Biden said. “We should be providing the money the House has passed in order to be able to go out and get people the help they need to keep their businesses open … The way to open businesses is give them the wherewithal to be able to open.”
He added: “You can’t fix the economy until you fix the Covid crisis.”
The stakes are high for an effective solution: Yelp estimates that around 60% of the businesses that closed their doors during the pandemic will never reopen. Although optimism among US small businesses has returned to pre-pandemic levels, the situation is tenuous, according to Oxford Economics’ September 2020 NFIB Small Business Optimism Index. It said that small businesses are “highly vulnerable to a renewed downturn” if the outbreak worsens, especially given that additional fiscal support is likely to be smaller than the initial package.
What businesses need to survive
Many business owners face massive declines in revenue because of coronavirus-related closures and changes this year.
Revenue from Hammertree’s venue has fallen about 95% this year, he said — an expected decline of around $4 million. To manage, Hammertree and his business partner furloughed their 76 employees and dipped into savings.
Still, he said Trump’s plan to return to normal operations doesn’t make sense during an ongoing pandemic.
“I personally am not in favor of opening right now and I believe that if you talked to 80% of other venues, they would say the same thing,” Hammertree said. “One of my rooms has a 1,500-person capacity. How do you put people in there and keep them six feet apart and keep them masked, and keep them from shouting and sweating? … It’s not safe right now.”
Many business owners say they’re wary of returning to business as usual at a time when Covid-19 rates are rising in many states. Some even said they’d be willing to close again temporarily, if it meant bringing an end to the pandemic.
“I would like to shut my restaurant, I would like to be closed until this thing is under control,” said Ellen Tomiye, owner of takeout restaurants Ellen’s Homestyle & BBQ in Virginia Beach and Portsmouth, Virginia. Tomiye, a Black woman with preexisting medical conditions — compounding risk factors — said she’s is fearful of contracting coronavirus. But without additional funds to cover rent and other costs, she said closing is not a realistic option.
“Everyday we make it, people are still coming through those doors, but it would be better if people didn’t have to be scared,” Tomiye, 54, said.
Deborah Reed, owner of Cloud & Leaf Bookstore in Manzanita, Oregon, has limited the number of customers allowed in the store, installed a plexiglass shield at the checkout stand and placed hand sanitizer throughout the store. But she still worries about being exposed to the virus and what that could mean for her husband, who has stage four cancer.
“We’re just terrified that he’s going to get this virus,” Reed, 56, said. “It would be helpful to get this virus under control, that’s the most important thing … I am also more than happy to close my bookstore for a month or two if it meant we could get this thing under control.”
And as Oregon’s rainy season approaches, Reed isn’t sure many customers will be willing to wait in line outside to comply with social distancing measures.
Business owners urged whichever candidate wins to push for more financial support to shore up likely sales losses over the winter. Additional stimulus could also help cover the costs of investing in personal protective equipment, setting up outdoor dining and other operational changes.
Burgess said that while sales at his sit-down restaurants are down 50%, he’s had to spend around $10,000 each month on tents, heaters, disposable serving products and other pandemic-related costs.
“All this rushing to send kids to school and open up businesses, it’s all for money,” Tomiye said. “We should never put money over people. But if I’m not open, I will lose this place and the landlord will still want their money … As small businesses, we are so overlooked.”
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