Like a lot of people, I’ve spent more time talking on the phone over the past couple of months than I have in years. There’s something about disaster that makes us want to hear voices and see faces, when, under normal circumstances, we’re rather just text.
Unfortunately, the conversations I’m having are mostly dire.
One of my recent calls was to a friend who lives in a small town in the Rockies. She’s got two kids, and so, in addition to working full time from a hastily constructed living room office, she’s now running a daycare where the clients don’t pay. She got her young son a walkie-talkie, and, on the morning we spoke, she’d overheard him talking with a friend who lives down the street. They were making plans to meet in the neighborhood park after everyone else had gone to sleep. Not even six weeks into quarantine and her five-year-old was already planning his escape.
Wrangling children, however, is now the least of her problems. The kids can be locked in at night; what she has no control over now is her finances. Her husband owns a small business: a retail store that sells running shoes, hiking boots, trekking poles and the kind of clothing (bright, water-wicking) that people who live in mountain towns think constitutes everyday fashion. They aren’t wealthy, but they’ve got five employees and, despite Amazon and Zappos, the store has managed to stay open for 15 years. In that time, it’s become more than just a place to buy shoes; they’ve made it into one of those “third spaces” urban planners talk about – where people meet up and form community of their own. They organize events and races and group runs where people of all abilities run together and then go out for drinks. In fact, that’s how my friend and her husband met: She was new to town (and running) and he stayed at the back of the pack just to talk.
When the pandemic hit, their business, along with so many others, was deemed non-essential by the state government. My friend doesn’t fault state leaders for that – there was an outbreak a few towns over, and it’s hard to argue that running shorts are “essential” during a pandemic. But despite immediately pivoting to online sales, she does wonder how much longer they’ll be able to stay open. Just before we spoke, they’d had their first zero-dollar day ever.
There has been some relief for business owners. My friend and her husband qualified for a payment protection program loan through the Small Business Administration (SBA), which is designed to keep people employed (and off unemployment insurance) during the crisis. The deal is, if you keep your employees on the payroll, you don’t have to pay it back.
Getting the loan was not a simple process: the SBA distributed the money to banks, which were then supposed to get it to small businesses. My friends banked at Wells Fargo, and the bank was so late making the application available that by the time it was open, the available PPP money had nearly dried up. Their Wells Fargo banker actually told my friend that they should seek out a different institution before it was too late, which they were, luckily, able to do through a local banker who shops at their store. In the end, they received $34,000 from the PPP, but considering that the store is closed and online sales are slow, the loan doesn’t help the business itself very much. It will help pay a portion of the store’s rent for the next eight weeks, but the major expense isn’t rent or even payroll: it’s their vendors.
“We owe vendors $150,000, which is not a big deal if you can sell your inventory for $300,000,” she told me. “But if the doors are closed, that plan falls apart, and PPP doesn’t cover any of those expenses.”
There are, in theory, other options. They applied for an economic injury disaster loan five weeks ago, but the only response they’ve received is an email telling them to expect another email. Their town is giving out small business loans, but, again, it’s not enough to pay off their vendors and keep the business afloat. Before the pandemic, it seemed like this would probably be the best year for their businesses. Instead, they may go bankrupt.
This story is being repeated across the US. Yet while small businesses like my friend’s face bankruptcy, some massive corporations are getting relief. Most PPP loans amounted to less than $250,000, but, according to a report by NPR, the restaurant chains J Alexander’s Holdings (market value: $74m), Potbelly ($85m), and Fiesta Restaurant Group ($189m) received between $10m and $15m of taxpayer-funded relief. Other corporations got just as much. My friend doesn’t want to see these companies go bankrupt or their employees laid off, but she wonders why big businesses are getting so much when small businesses like hers received so little. (Perhaps the answer lies in big banks prioritizing their richest clients.)
Congress has allocated more funding for the PPP (this time, with fewer loopholes for big business), but that will not be enough to prevent the small-business apocalypse. Rent is still due. Vendors still need to be paid. PPP loans, under current regulations, cannot fix that. So, amid all the panic about the disease itself, there’s well-founded fear about what comes after.
I keep wondering what cities and towns across the US will look if the quarantine goes on much longer. Maybe the post-Covid future will look like the present, when you can order nearly anything with two-day delivery but can’t set foot into most shops. In Seattle – the city where I worked until I, too, was laid off – normally bustling neighborhoods look almost abandoned. A few eateries are open for takeout, but more are boarded up to keep potential looters out. Some business owners have hired artists to decorate their new plywood fronts with uplifting slogans – “This too shall pass,” “All you need is love … and toilet paper” – but it doesn’t do much to alleviate the sense of disaster.
Without functional bailouts of small businesses, this pandemic and the resulting economic crash could be the end of cities and towns as we know them. The bars, restaurants, retailers, music venues, art spaces, theatres and coffee shops that make cities feel vibrant will probably go belly-up (though Starbucks will probably be just fine). A few “essential” corporations will prosper but that’s the exception. Even hospitals are now going under. Perhaps Amazon will buy up storefronts and install sterile, cashier-less grocery stores and retailers where no one actually interacts. Post-pandemic, some people might actually prefer it.
While most of us humans will survive the virus, without relief, small businesses may very well not. The federal government could, in theory, stop this slide into ruin, but that would require a level of investment and competence not seen in years. In the meantime, as my friend waits for the quarantine to lift, she’s quickly losing hope that they will come out the other side of this crisis intact.
“Even when stores are open, why would people come back?” she asked me. “They’re scared. I heard Jeff Bezos made $24bn since the shutdown started. Maybe he’ll buy us out.”
My friend’s small hiking shop is dying. It’s one story of millions
Katie Herzog
This could be the end of cities and towns as we know them. The places that make communities unique may not survive
Photograph: Elaine Thompson/AP
Like a lot of people, I’ve spent more time talking on the phone over the past couple of months than I have in years. There’s something about disaster that makes us want to hear voices and see faces, when, under normal circumstances, we’re rather just text.
Unfortunately, the conversations I’m having are mostly dire.
One of my recent calls was to a friend who lives in a small town in the Rockies. She’s got two kids, and so, in addition to working full time from a hastily constructed living room office, she’s now running a daycare where the clients don’t pay. She got her young son a walkie-talkie, and, on the morning we spoke, she’d overheard him talking with a friend who lives down the street. They were making plans to meet in the neighborhood park after everyone else had gone to sleep. Not even six weeks into quarantine and her five-year-old was already planning his escape.
Wrangling children, however, is now the least of her problems. The kids can be locked in at night; what she has no control over now is her finances. Her husband owns a small business: a retail store that sells running shoes, hiking boots, trekking poles and the kind of clothing (bright, water-wicking) that people who live in mountain towns think constitutes everyday fashion. They aren’t wealthy, but they’ve got five employees and, despite Amazon and Zappos, the store has managed to stay open for 15 years. In that time, it’s become more than just a place to buy shoes; they’ve made it into one of those “third spaces” urban planners talk about – where people meet up and form community of their own. They organize events and races and group runs where people of all abilities run together and then go out for drinks. In fact, that’s how my friend and her husband met: She was new to town (and running) and he stayed at the back of the pack just to talk.
When the pandemic hit, their business, along with so many others, was deemed non-essential by the state government. My friend doesn’t fault state leaders for that – there was an outbreak a few towns over, and it’s hard to argue that running shorts are “essential” during a pandemic. But despite immediately pivoting to online sales, she does wonder how much longer they’ll be able to stay open. Just before we spoke, they’d had their first zero-dollar day ever.
There has been some relief for business owners. My friend and her husband qualified for a payment protection program loan through the Small Business Administration (SBA), which is designed to keep people employed (and off unemployment insurance) during the crisis. The deal is, if you keep your employees on the payroll, you don’t have to pay it back.
Getting the loan was not a simple process: the SBA distributed the money to banks, which were then supposed to get it to small businesses. My friends banked at Wells Fargo, and the bank was so late making the application available that by the time it was open, the available PPP money had nearly dried up. Their Wells Fargo banker actually told my friend that they should seek out a different institution before it was too late, which they were, luckily, able to do through a local banker who shops at their store. In the end, they received $34,000 from the PPP, but considering that the store is closed and online sales are slow, the loan doesn’t help the business itself very much. It will help pay a portion of the store’s rent for the next eight weeks, but the major expense isn’t rent or even payroll: it’s their vendors.
“We owe vendors $150,000, which is not a big deal if you can sell your inventory for $300,000,” she told me. “But if the doors are closed, that plan falls apart, and PPP doesn’t cover any of those expenses.”
There are, in theory, other options. They applied for an economic injury disaster loan five weeks ago, but the only response they’ve received is an email telling them to expect another email. Their town is giving out small business loans, but, again, it’s not enough to pay off their vendors and keep the business afloat. Before the pandemic, it seemed like this would probably be the best year for their businesses. Instead, they may go bankrupt.
This story is being repeated across the US. Yet while small businesses like my friend’s face bankruptcy, some massive corporations are getting relief. Most PPP loans amounted to less than $250,000, but, according to a report by NPR, the restaurant chains J Alexander’s Holdings (market value: $74m), Potbelly ($85m), and Fiesta Restaurant Group ($189m) received between $10m and $15m of taxpayer-funded relief. Other corporations got just as much. My friend doesn’t want to see these companies go bankrupt or their employees laid off, but she wonders why big businesses are getting so much when small businesses like hers received so little. (Perhaps the answer lies in big banks prioritizing their richest clients.)
Congress has allocated more funding for the PPP (this time, with fewer loopholes for big business), but that will not be enough to prevent the small-business apocalypse. Rent is still due. Vendors still need to be paid. PPP loans, under current regulations, cannot fix that. So, amid all the panic about the disease itself, there’s well-founded fear about what comes after.
I keep wondering what cities and towns across the US will look if the quarantine goes on much longer. Maybe the post-Covid future will look like the present, when you can order nearly anything with two-day delivery but can’t set foot into most shops. In Seattle – the city where I worked until I, too, was laid off – normally bustling neighborhoods look almost abandoned. A few eateries are open for takeout, but more are boarded up to keep potential looters out. Some business owners have hired artists to decorate their new plywood fronts with uplifting slogans – “This too shall pass,” “All you need is love … and toilet paper” – but it doesn’t do much to alleviate the sense of disaster.
Without functional bailouts of small businesses, this pandemic and the resulting economic crash could be the end of cities and towns as we know them. The bars, restaurants, retailers, music venues, art spaces, theatres and coffee shops that make cities feel vibrant will probably go belly-up (though Starbucks will probably be just fine). A few “essential” corporations will prosper but that’s the exception. Even hospitals are now going under. Perhaps Amazon will buy up storefronts and install sterile, cashier-less grocery stores and retailers where no one actually interacts. Post-pandemic, some people might actually prefer it.
While most of us humans will survive the virus, without relief, small businesses may very well not. The federal government could, in theory, stop this slide into ruin, but that would require a level of investment and competence not seen in years. In the meantime, as my friend waits for the quarantine to lift, she’s quickly losing hope that they will come out the other side of this crisis intact.
“Even when stores are open, why would people come back?” she asked me. “They’re scared. I heard Jeff Bezos made $24bn since the shutdown started. Maybe he’ll buy us out.”