BRAC today released a commentary underscoring the importance of economic recovery for the region’s small businesses, which make up nearly 90 percent of all regional enterprise and account for over 60 percent of all regional jobs. The commentary is available at brac.org/ppc.
“About half of hourly small business employees have lost their jobs since the pandemic began,” said Andrew Fitzgerald, senior director of business intelligence for BRAC. “It is incumbent on local, state, and federal officials to consider policies that not only assist small businesses in the coming months, but also have robust workforce components that ensure employment returns to pre-pandemic levels.”
The recovery of small businesses is especially precarious because they historically lack access to capital and have less than one month’s worth of expenses in cash reserves. With the sharp downturn in revenue associated with extended periods of Stay at Home Orders, ensuring that these businesses are able to survive is an important aspect of an inclusive economic recovery.
Key takeaways from the commentary include:
- Nearly a third of small businesses in operation as of January 2020 were not operating in Phase One of reopening;
- Small business revenue was down more than 25 percent near the end of Phase One;
- The Capital Region lost almost 54,000 jobs as of April, including more than 20,000 in the sector accounting for restaurants, bars, and hotels;
- While the generous federal unemployment supplement of $600 weekly has caused some employers difficulty in rehiring employees, the elimination of the benefit enhancement will translate to tens of millions of dollars in diminished income for the region.
BRAC is regularly updating brac.org/recovery with business resources and guidance related to COVID-19.
As Senior Vice President of Business Intelligence, Andrew focuses on research and analysis for BRAC’s business development and economic competitiveness teams, providing economic, demographic, and fiscal research to support business expansion and relocation efforts in the Baton Rouge Area and analysis of education, workforce, tax, and other economic and public policy issues.