COVID AND SMALL BUSINESSES

All of us have had to make sacrifices and adjustments to our lifestyles due to the COVID pandemic. Some of us have endured the pain of the virus firsthand. A lucky few of those have had a mild case, but most of those who have contracted it say it was a horrific experience. Many of those who have remained healthy have suffered in other ways. For example, they have been forced to stand by helplessly while loved ones got sick and passed away, sometimes alone and neglected. Others have lost their jobs or businesses and/or have been confined to their homes, precluded from spending time with family and friends. To be sure, those things are devastating, but the focus of this blog will be on the impact of the virus and the government’s policies on small businesses.

In many ways, small businesses are the essence of America. They embody many of the characteristics that define us – entrepreneurship, free enterprise, independence, risk-taking, being one’s own boss. Being a small business owner entails financial risk, long hours, and sacrifices relative to one’s family. According to the SBA the failure rate is high. About one-half fail within five years, and the resultant fall-out can be severe, such as personal bankruptcy or divorce. However, if one is successful the rewards are substantial. Growing up, my father owned a small pharmacy, and I experienced the various ups and downs firsthand. For some, the experience is not unlike the children’s game of Chutes and Ladders.

The Small Business Association generally defines a small business as one having fewer than 500 employees and generating less than $7.5 million in annual sales. Furthermore, according to the SBA there are currently approximately 30.7 million of them in the US, and they account for 99.9% of all businesses. According to the latest statistics available they account for 62% of all new jobs. Yes, the large businesses are more well-known, but small businesses are the lifeblood of the US economy. Additionally, they provide a livelihood for much of the middle class, immigrants and the working class.

As I said, owning a small business is a high-risk endeavor. However, it is bad enough if one fails due to one’s own actions or inactions, such as a poor product, poor management or lack of sufficient financing. It is much worse to be tripped up by outside events which you could not have foreseen and over which you have no control, such as the events of 2020. First, there was the COVID pandemic, which originated in China and which no one could have foreseen. Then, to combat the pandemic the government was forced to impose a general shutdown of all but what it arbitrarily and unilaterally deemed to be “essential” businesses. Next, the government failed to provide sufficient relief to those affected. Finally, it extended the shutdown of certain businesses based on questionable facts and motivations. More on that last one later.

As I write this we are nine months into the pandemic. Thousands of businesses have already failed, and more failures will be forthcoming. The hardest hit have been the service industries, which are based on person-to-person contact, such as restaurants, catering, beauty salons and gyms. In many states the politicians have deemed these to be “high-risk” enterprises and have imposed stringent restrictions on them, which for all intents and purposes have forced them to shut down.

Many of these restrictions are arbitrary, and punitive. Contradictions, inequities and inanities abound. For example, in many states one is precluded from attending religious services, even if one remains in one’s car, yet one can buy liquor or a lotto ticket.

Our political leaders often ignore their own rules and flout it as if they are above the laws they themselves have instituted. (“Good for thee, but not for me.”) For instance, Nancy Pelosi goes to a closed beauty salon to get her hair done; Chicago Mayor Lori Lightfoot gets a haircut when the rest of Chicagoans are forbidden to do so; NYS Governor Andrew Cuomo makes plans to fly to his mother’s on Thanksgiving (until he was found out and forced to cancel); his brother, Chris Cuomo, goes jogging when he was supposed to be in isolation and then berates a passerby who questions him; and CA governor Gavin Newsome ignores his own rules and dines in an exclusive restaurant with over a dozen family members, friends and donors without masks or social distancing. These “in your face” demonstrations of entitlement only serve to frustrate and anger people. who are forced to sacrifice.

In states such as NY and CA the rules on restaurant dining have changed several times, often without science or logic. First, only takeout was permitted, then takeout plus dining outside, then dining inside was all right with restrictions, then only outside, then not at all. Often, these restrictions would vary from locale to locale as if the virus could not cross the street from one area to another. This continual moving of the goalposts is enough to make one dizzy. In some states restaurant dining is prohibited, but one can go to a strip club where, presumably one can eat and drink. Maybe if an enterprising restaurant owner were to have his waitstaff wear “G-strings” they would be allowed to open up. These ever-changing health and safety standards merely add an extra layer of stress, frustration and anger to an already-difficult situation. Furthermore, they are being imposed by self-righteous, self-important politicians who exhibit indifference, if not callousness, to their constituents who elected them to protect them and who are struggling. Meanwhile, these same politicians remain insulated from the pain and suffering they have caused and continue to draw paychecks. As I said, “good for thee, but not for me.”

There have been many instances where a restaurant, a gym or a salon is prohibited from operating, but a few blocks away a competitor in a bordering county, zip code or state is permitted to open. Try explaining the logic behind that to the exasperated business owner who is forced to watch his clientele move a few blocks to said competitor. Some states have been imposing a 10:00 pm curfew, as if the virus were dormant all day and only came out after 10 pm. Even more unjust was the case of the LA restauranteur who was required to close down her outdoor dining facility when literally next door a movie company was permitted to open and operate an identical outdoor dining setup for its cast and crew. Go figure.

It is instructive to compare the situations in NY and FL. I could write an entire blog on this, but suffice to say the two states are a study in sharp contrasts. Last summer the NY governor required nursing homes to accept COVID patients. Predictably, over 10,000 nursing home patients caught the virus and died. FL kept COVID patients out of nursing homes, and has had fewer deaths even though it has a higher population and an older demographic. NY has shut down many businesses and schools. The NYS Restaurant Association has disclosed that since March some 1,000 NYC restaurants have closed permanently, and many more are anticipated. Moreover, as many as 2/3 of NYS’s restaurants could close by year-end if they don’t receive additional government aid, which, as I write this has not been passed. According to Yelp nationwide about 100,000 small businesses have closed since the advent of the pandemic. The NY governor seems indifferent to the plight of the people; he appears to be more focused on his public image and self-perceived “celebrity.” On the other hand, Fl has encouraged businesses and schools to remain open. Recently, the FL governor has reiterated to the people that he “has their back.” Is it no wonder that many NY residents are fleeing the state for FL?

During the summer, many cities were being victimized by “protests,” which, in reality, were riots and convenient excuses to loot and destroy businesses. Social distancing guidelines were ignored. The politicians directed the police to stand down and ignore those crimes. The final indignity was that in some states, such as NY, the few rioters that were arrested were immediately released to riot again thanks to the state’s illogical and inane “no-bail” policy. Yet, many business owners who dared to open up in defiance of the mayor’s or governor’s order were hounded, jailed and lost their license.

CONCLUSION

I understand the desire to keep people safe from a deadly pandemic. However, in my opinion, one must find a balance between safety and economic well-being. Shutting down the economy has fostered social and economic problems and exacerbated political divisions within the populace.. Virtually, every physician I have heard has denoted that isolation in and of itself leads to various health hazards, such as depression, alcoholism, drug use and domestic violence. Destroying businesses that people have spent years building is unconscionable. What benefit is it to defeat the virus and, in the process, destroy the country?

As we know, help is on the way. The FDA has approved one vaccine and more are on the way. Inoculations have already commenced for healthcare workers and will soon expand to other groups. It is expected that millions of doses will be available by late Spring/early Summer. There is definitely a light at the end of the tunnel. As I said, let’s hope that after the virus has been defeated there is still an economy and a country left.

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