As many states across the U.S. are beginning to slowly re-open, one issue that has plagued the mind of small-business owners is that of customers: even if these small stores and restaurants begin to re-open, how many customers will they have? As small-business owners wrestle with these troubling questions, another problem is emerging that they might inevitably deal with, one possibly more troubling—will they have any employees back to help them?
Due to the CARES Act passed in March, states now have the ability to extend unemployment benefits an additional 13 weeks on top of the typical 26-week period of benefits for the unemployed. Further relief provided by the Act is that some unemployed workers can receive an additional $600 with their usual unemployment benefits due to COVID-19. These benefits are meant to be provided through July 25, 2020, according to the government’s website on the CARES Act. But as stores begin to re-open and store owners call back their employees, many are reluctant to return to work.
A store in Ithaca, New York, nearly a 4-hour drive from Manhattan, the epicenter of the COVID-19 pandemic in New York and the United States, is dealing with this exact problem. Ms. Julia Crowley is attempting to re-open her two businesses, Triphammer Wines & Spirits and Ithaca Coffee Co., yet is finding that some of her employees are choosing not to return to work and would rather continue receiving their unemployment benefits. One of her employees, a Ms. Luce-Fina, finds that her $816 a week unemployment check pays her more than her old $12.50 an hour salary, and thus would rather stay unemployed for the time being.
So as small-business owners like Ms. Crowley being to reopen their stores and restaurants, unsure of how many customers they can bring in during the usually busy summer season, they will also have to wrestle with finding employees. Any business that pays employees near minimum wages will find it increasingly difficult to get their old employees back, as they are reluctant to return given the higher unemployment benefits due to the CARES Act. Small businesses already have their backs against the walls due to the lost revenue because of the COVID-19 shutdown, and even though some aid via PPP loans and others have kept them afloat, the next month or two will be crucial in their fight for survival. A worrisome trend that could emerge is that of a lack of employees due to the greater benefits of staying unemployed. The majority of minimum-wage jobs will not equal or surpass that of the extra $600 unemployment benefits now given to the states through the CARES Act, and those currently unemployed might not view a return to work necessary until a date closer to that of July 25, when the program will cease. While those unemployed might be able to wait a little longer until they return to work, many small businesses across the country cannot. Every day more reports detail the deaths of small businesses across the country, and for those that remain, the fight for survival is now. So as the unemployment numbers across the country continue to rise, small businesses might still have a hard time actually finding anyone to hire.