COVID & Unemployment

Expanded unemployment benefits help small businesses, too

Justin Ho Jul 27, 2020
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A hostess at a Miami restaurant waits for customers behind a partition. The expanded unemployment benefits helped small businesses make decisions early in the pandemic. Joe Raedle/Getty Images
COVID & Unemployment

Expanded unemployment benefits help small businesses, too

Justin Ho Jul 27, 2020
Heard on:
A hostess at a Miami restaurant waits for customers behind a partition. The expanded unemployment benefits helped small businesses make decisions early in the pandemic. Joe Raedle/Getty Images
HTML EMBED:
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When Sophie Blake closed her jewelry store in Virginia at the beginning of the pandemic, she said she had some difficult conversations with her four employees. Two she furloughed, and the other two she cut to part time.

When she first heard about the expanded unemployment benefits from the federal government, she encouraged her employees to apply.

“My first initial response was, go ahead and take it because this is extra support for you,” Blake said. “Because I don’t know when I will be able to rehire you back.”

Blake had applied for a Paycheck Protection Program loan at the time but wasn’t sure whether she’d get one. She also knew that one of her employees was asthmatic and expecting a child, and should probably stay away from work.

“For her, the decision was very clear,” Blake said.

The clarity of the expanded benefits helped businesses make decisions about their own futures early in the pandemic.

“Initially it was a lifesaver,” said Mark Frier, who owns three restaurants in Vermont and had to lay off about 130 employees when COVID hit.

Frier said the expanded unemployment benefits, which included an additional payment of $600 a week, let him focus on making plans to stay in business while ensuring that his employees would be taken care of in the meantime.

“We want them to succeed, and we want to help them grow their careers, and we hope to continue to employ them well into the future,” Frier said.

Small businesses, whether they’re restaurants or jewelry stores, also need to know that their customers can afford to come in and spend money, said Nathan Tankus, research director for the Modern Money Network and the author of Notes on the Crises.

“That’s the whole idea around these kinds of programs, that are supposed to sustain demand,” Tankus said. “That they have all these indirect, knock-on positive effects.”

The resurgence of infections in parts of the country is having a negative effect on demand. Blake reopened her jewelry store, but sales have fallen this month. Frier has brought back about 100 of the employees he laid off but said he wants that more robust safety net to be there if he has to close again.

“That’s the elephant in the room constantly with other restaurant owners that I talk to,” Frier said. “That fear that we’re going to have to re-close come fall, and then what happens?”

Frier got a PPP loan but said it’ll likely run out soon. And of his three restaurants, the one that’s doing the best is the one with the most outdoor seating. But in the fall, it’s going to get cold. Frier said he’s worried that then, he won’t be able to make enough money to keep his doors open.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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