The Chairman of the Federal Reserve, Jerome Powell, noted last week that the economy is quickly deteriorating – and this is after the Federal Reserve and the federal government have both taken extraordinary measures to shore up the economy. Of course, Powell is not the only one who has noticed the sharp economic downturn. Small business owners all across the country are worried that the businesses they worked so hard to build will fail and they will be forced to lay off all of their employees if things do not change very soon. Here is what several such business owners have to say about their situations.
Andrew S. is the owner of Sebastian Design Build, a home improvement company based in Clarksville, Maryland, who stated, “The shutdown of our economy has had a terrible effect on my company, my family, and myself. It also is adversely affecting the lives of my employees and all of my employees’ family members. We have a very small company here, but I can easily think of 40 or 50 Americans that are being adversely affected by this shutdown and us not being allowed to work. As a small business owner, I do appreciate what was accomplished with the CARES Act. That is gonna allow me to keep my employees paid for the next two months or so. After that, I don’t… know what’s going to happen. I would not expect the government to keep writing checks to cover everybody’s payroll. “
Sherry R. and her sons own a salon in Oklahoma City, Oklahoma, who worried about being able to pay their employees: “We put everything on the line to do this business, which is what makes America great — that we have the opportunity to work really hard and build a business. But with everything shut down, we are unable to… help these girls [her employees] and their families… My sons and I… we’re still gonna owe at least 144,000 [dollars] every year. We’ve gotta get back to work.”
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Gabe S. is the owner of Window Ninjas, which provides window cleaning and pressure washing services and has locations in North Carolina, South Carolina, Tennessee, and Virginia, said, “Thus far the shutdown… has had a severe and negative impact on our business. We went from [a] 25 percent growth rate to a… decline in sales and service. We have had to reduce our workforce hours and had to lay off about 25 percent of our employees… completely. Our numbers are suffering, and our goal of franchising our business is in serious jeopardy. If our economy is not opened up by May 1st, we will lose out on the most productive month of the year for us – May’s our busiest month… By closing our economy… it will literally take us backwards by about 20 years – if it… just doesn’t completely shut us down. We service commercial companies from large commercial chain stores to the local mom and pop pizzeria. They have been completely wiped out and cancelled all services… We do a lot of residential service work… but that work is starting to dry up now as well. And we have also seen a major decline in our larger, commercial high-rise buildings that usually are scheduled months in advance… If they have no customers, we have no customers, and the U.S. will have not any tax revenue. And the local municipalities will lose out as well. We’re anticipating a huge spike in our local property tax rates to pay for all for the lost tax revenue that they are losing out on. And we are also anticipating a major drop on property values… Open up the economy by May 1st as planned…, or we will be out of business. And we’re predicting about 75% of other companies will be too.”
The good news for these business owners is that President Trump is a businessman and understands that the economy cannot remain closed indefinitely. To facilitate the reopening of the economy, he is establishing the Council to Reopen America. We hope this council will include small business owners as well as clergy members, counselors, and charity workers. Public health officials can be expected to want to keep the country locked down for months, and it is crucial that the social, mental, and economic costs of such a course of action are fully considered.
Richard McCarty is the Director of Research at Americans for Limited Government Foundation.
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