Statement of the Hon. Nydia M. Velazquez “The Impact of Coronavirus on America’s Small Businesses
Washington, March 10, 2020
Not only has coronavirus caused thousands of tragic deaths around the globe, this public health crisis also threatens the fabric of our economy, which is woven together by small businesses. Already, economists have lowered global forecasts with the dimmest outlooks predicting a fall from nearly 3 percent to just 1 percent growth due to the uncertainty and disruptions inflicted by the virus.
Here in the U.S., because small businesses make up over 99 percent of all employers, we can expect that many will face hardship from this public health crisis. From the local barber shop to the neighborhood café to the innovative small tech firm, a pandemic can mean fewer customers, supply chain disruption, and workforce reductions.
For the travel and tourism industries, both of which are significant small business job creators, the outbreak of coronavirus is being estimated as the worst crisis since 9/11. In addition to hurting big retailers like airlines, small retail shops, independently owned restaurants, and recreational services are also seeing severe drops in customers.
For companies that rely on imports from countries like China, the epicenter of the outbreak, the virus has dried up supply chains, forcing many small businesses to reconsider their options for filling orders and meeting sales. Additionally, while businesses around the country take stock of their operational plans during a public health emergency, small businesses may be unable to absorb cuts in their workforce, causing them to scale back operations, ultimately reducing revenue.
As the coronavirus spreads, so, too does misinformation and alarm. For many businesses, particularly Asian-owned firms, this can be equally damaging. Because of fear, misinformation and xenophobia, many Chinatown restaurants and stores in my city of New York were already feeling economic pain before even one person in New York tested positive for the virus. Merchants in Chinatown have reported sales drops as high as 80%. Many restaurants and retailers in Manhattan’s Chinatown and Brooklyn’s Sunset Park are already having to furlough staff, and may have to let employees go.
That is why I’m proud that the emergency funding bill, which included money for vaccines and testing, will also help businesses access federal loans if they suffer losses related to the outbreak. This means that firms harmed by the virus could apply for emergency loans, with extremely low interest rates, to help them meet financial obligations. Just as the SBA helps local economies get back on their feet after a hurricane, wildfire or earthquake, the agency can be critical to helping our small ventures recover from this public health crisis.
In dealing with this public health issue, our number one goal is to contain the spread and ensure that those infected are treated and fully recover. One way to do that is to support paid sick leave. Having people go to work sick only increases the likelihood of transmissions and further prolonging the decrease in demand for goods and services that small businesses provide. I look forward to hearing from our public health experts on the health challenges presented by the outbreak. However, we also understand that there will be an economic impact and that small firms will be among the hardest hit, so I look forward to hearing your experiences and concerns.
In my view, we should be all focus on preparedness, working together in a coordinated way and providing accurate, reliable information to our small businesses and the American people. In the end, the stakes are too high, and the federal government cannot afford to get this wrong.