Job creators need help to survive and thrive after COVID-19
May is typically a time set aside to recognize the contributions of entrepreneurs and small business employers around the country as we celebrate National Small Business Week and Small Business Month. This year stands in stark contrast as we do all we can to support small businesses that have shuttered and have been forced to layoff employees due to the spread of COVID-19. This is why it’s important now more than ever to understand the importance of small businesses to a thriving, job-creating economy and ensure they don’t just survive this crisis—but that we promote a robust small business ecosystem that addresses inequities and promotes quality jobs in the Bay Area and nationwide.
Here in California, four million small businesses, nearly half of which are owned by people of color, employ more than seven million people—nearly half of the entire private sector workforce. And importantly, most new jobs are created by businesses with fewer than 20 employees.
Many of these small business owners come to think of their hard-working employees like family, which makes the current crisis all the more devastating for the small business community. Small Business Majority polled small businesses in California last month to better understand the impacts of COVID-19 on small businesses and their workforce, and the results are dire.
An astounding 92% said the coronavirus has impacted their business, with nearly half reporting it has had a severe negative impact. And 44% of small businesses in California have already closed or are planning to do so in the next two months.
Unfortunately, small businesses reported widespread layoffs and furloughs. Thirty-one percent have permanently laid off their employees, roughly half (49%) have furloughed employees and most (71%) have reduced hours, salary or both for their employees as a result of the crisis. More than 4 in 10 (41%) have permanently laid off, furloughed or reduced the hours/salary of their entire workforce.
These devastating numbers underscore why we must take action to ensure small businesses can recover, rehire and sustain good jobs in California. We asked small businesses what they need right now to help them survive this crisis, and most small businesses (93%) reported they need direct grant assistance.
This is why at Small Business Majority we have worked since the beginning of the crisis to educate stakeholders, policymakers and the media about the importance of small businesses to our economic recovery and why we need a robust, direct grant program to reopen Main Street and get people back to work. To date, thousands of small businesses and advocates for the business community have signed our letter calling for a direct grants program for small businesses.
What’s more, last week we released our new Roadmap to Recovery that outlines immediate and long-term actions in key areas that can ensure small businesses’ survival and help businesses and their employees thrive after this crisis. We’re particularly concerned with promoting a more level playing field for entrepreneurs of color, women, immigrants and other underserved businesses that create jobs in their local communities. This is especially important to the Bay Area as we work to address inequalities in our local economy and ensure we can overcome the pandemic.
While parts of our region slowly start to reopen, the impacts on our small business community and the workforce continue to be bleak. But we have an opportunity right now to recognize the important role small businesses play in providing critical jobs and enact changes that will bolster them, and our workforce as a whole.
The time to act is now.
Mark Herbert serves as Vice President, California for Small Business Majority, overseeing the organization’s policy, outreach and development efforts across the state. Mark is also a member of ReWork the Bay’s Equity at Work Council where he represents small businesses in the conversation about making our regional economy more equitable.