WINCHESTER, Virginia – In a normal year, hundreds of book lovers would have gone to Winchester this summer for Shenandoah University’s annual children’s literature conference.
Some would have gone to Christine Patrick’s bookstore in the city center. Winchester Brew Works reportedly launched barrels this month for Oktoberfest revelers. Hideaway Café would be announcing its monthly Divas Drag Show.
But 2020 is not a normal year. The literature conference, Oktoberfest and drag shows were all canceled – victims, like so many others, of COVID-19.
The pandemic has hit small businesses in the United States – an alarming trend for an economy that is trying to recover from the deepest and fastest recession in US history. Typically, small employers are a vital source of hiring after a recession. They account for almost half of the economy’s output and an enormous portion of new jobs.
Nearly one in five small businesses closed, according to data company Womply.
Small businesses are struggling, even here, in a city of 28,000, which works hard to promote and preserve local businesses. Founded in 1744 and contested repeatedly during the Civil War, Winchester, 75 miles west of Washington, DC, at the northern end of the Shenandoah Valley, years ago blocked several blocks to create a boardwalk in the city center – a bulwark for local businesses that must compete against the big stores on the outskirts of the city.
But urban planning is no match for a global pandemic.
“We are in a very strange time,” said Mayor John David Smith Jr. “Small businesses and families are suffering.”
Some businesses in Winchester closed quietly in the spring, he said, choosing not to renew their rentals.
Others are holding on. They are getting help and loans from the government or readjusting their operations to reach customers online. Some are now offering sidewalk service and deliveries or benefiting from residents who buy local produce to keep dear Winchester’s businesses from sinking.
When the pandemic hit in the early spring, the American economy fell into an unhealthy free fall, with businesses closing everywhere and consumers staying home to avoid infection.
Victoria Leigh Kidd, owner of Hideaway Caf & # 233;, poses in her store in the Old Town area on Wednesday, October 7, 2020, in Winchester, Virginia. The viral pandemic has hit small businesses in the United States, an alarming trend for an economy that is trying to recover from the deepest and fastest recession in US history. Small businesses are struggling in Winchester, a city of 28,000 that works hard to promote and preserve local businesses. (AP Photo / Steve Helber)
Although hires have partially recovered, the United States is still down 10.7 million jobs since February.
Without access to credit and the cash stocks of larger companies, small businesses were especially vulnerable to the sudden economic downturn.
Many folded under the pressure. Yelp, which publishes reviews of restaurants, bars and other businesses online, reports that almost 164,000 businesses on its website have closed since March 1, 98,000 of them permanently.
Steven Hamilton, an economist at George Washington University, estimates that 420,000 small businesses in the United States have closed permanently until July 10.
And the problems of small businesses are not limited to their owners. They generate nearly 44% of the United States’ economic output, according to the Small Business Administration, and account for two-thirds of new hires. (The SBA generally defines small businesses as those that employ a maximum of 500 workers.)
In addition to their economic impact, small businesses define communities. “Let’s talk about tapestry for people and communities,” said Andre Dua, a senior partner at McKinsey Consulting, who studied the impact of COVID-19 on small businesses. “What is New York without its restaurants?”
Or Brooklyn without its boutiques?
Diana Kane opened her clothing and jewelry store on Brooklyn’s Fifth Avenue in 2002, before the New York neighborhood was trendy.
When the pandemic hit, its clothing sales evaporated – down 78% in April. Unable to negotiate a reduction in rent, she closed the Boutique Diana Kane in May.
Across the country, in Santa Fe, New Mexico, Leslie Moody is struggling to maintain Rancho Gallina, the boutique hotel she opened in 2013 with her husband. In January, they expected an exceptional year – predicting revenue of $ 20,000 a month from room reservations, weddings and other events.
“At the end of April, everything had been canceled or postponed,” said Moody.
The bailout program that the federal government enacted in March helped them to survive. In addition to state unemployment benefits, she and her husband could each receive $ 600 a week in federal unemployment benefits – until the program expired on July 31.
“That was the money that meant we didn’t have to hold our breath every month,” said Moody. “Now we are in the mode of holding our breath.”
Governments at all levels have struggled to protect small businesses. In addition to expanding unemployment benefits, Congress approved the Salary Protection Program, which provided $ 520 billion to 5 million companies, most of them small.
But Congress did not agree on another bailout. Without further federal aid – soon – economists warn that the recovery is likely to falter and intensify pressure on small businesses struggling to survive.
To endure, many small businesses have tried to reinvent the way they do business by making deliveries and allowing customers to withdraw purchases.
Flexibility may be paying off for some.
Companies with fewer than 500 employees were most affected when the pandemic hit: they cut 16.4% of their jobs between February and April, against a 14.1% drop in employment in companies with 500 or more workers, according to with the ADP payroll processor. But since April, employment in smaller companies has recovered a little faster than in larger companies.
Still, Hamilton, of George Washington University, fears the damage will be lasting.
“It seems clear to me that the COVID-19 crisis will have an extremely profound healing effect on the small business sector,” said Hamilton, “and, through it, on the American labor market and economy.”