How has Philadelphia’s workforce, specifically small businesses, been affected by the coronavirus pandemic? I think it is first important to take a look at how Philadelphia was doing before the pandemic in order to understand how drastic the effects have truly been. Rebecca Rhynhart, City Controller for Philadelphia, began a series of articles in early June regarding how Philadelphia neighborhoods have been affected by the COVID-19 pandemic. Her first edition notes how about 70 percent of jobs were in an industry affected by the stay at home order; this added pressure to a county that was the highest in both unemployment rate (5.9 percent) and poverty rate (24.5 percent) entering the COVID crisis. Now that you have some background information, I want to look at what exactly is a small business because we hear that term so often.
A small business is one that employs 500 people or less, as stated by the Small Business Administration. It should be common knowledge that small businesses are imperative to the economy of the United States and especially Philadelphia. In fact, a weekly series done by the Economy League of Greater Philadelphia on the region’s economy during the pandemic found that small businesses make up 99.7 percent of companies in the Philadelphia area. Out of the 99.7 percent, it was found that 53.7 percent of those businesses employ five people or less. How have these small businesses been affected by the pandemic? Let’s do a breakdown in two parts: the workers and the businesses.
WORKERS
Beginning with the workers, it was reported by Rhynhart that from the second week of March through the first week of June over 150,000 workers, about 21 percent of the city’s total workforce, filed for unemployment. Her report also noted that there was about a 60 percent decrease in workers’ hours from March 1 through May 15, only second to New York City where the pandemic was very severe. People who qualified were able to receive a $1,200 stimulus check as well as unemployment payments that were higher than usual.
SMALL BUSINESSES
Small businesses themselves were heading into dark days due to stay-at-home orders; many businesses were unable to work from home (restaurants, retail stores, service stores such as beauty salons, etc.). The city created a Small Business Relief Fund which made grants and zero-interest loans available to small businesses negatively impacted by the pandemic. The Fund raised a total of $13.3 million in funding, but was ultimately overapplied for; receiving more than 7,200 applications before it was closed due to limited resources. A total of 2,054 businesses were given rewards by the Fund and it used up the entirety of the 13.3 million.
What does this mean for the other businesses that were struggling? The city announced a new $3M loan program, “the Restart PHL Loan Fund, for small businesses in the city… with outstanding needs… this report can be used as a starting point to identify the communities and industries where investment should be targeted” (Rhynhart). Alongside this program, there have been a number of other grants and loans that have been distributed by the state that Rhynhart covers in her most recent report under FUTURE SUPPORT.
While the city is working on awards and grants for high-poverty neighborhoods as well as small businesses, it is important to note that they have been working hard to distribute funds in order to help the economy stay on its feet. Rhynhart has noted many programs and plans for future funding and I think that small businesses and their workers will be in good hands moving forward.
