Apr 16, 2020 - Economy & Business

The small businesses overwhelmed by the pandemic

Erica Pandey, author of @Work

Illustration: Aïda Amer/Axios

A slew of small businesses are struggling — or even closing down entirely — not because business has died down, but because it's booming.

What's happening: Millions of U.S. small businesses have been forced to shut down due to restrictions on non-essential businesses or abysmal foot traffic amid the coronavirus pandemic. But even the small firms that have continued operations are shuttering because they're utterly overwhelmed by the spike in business as the pandemic plays out.

"They're trying to limp along because they've been deemed essential," says Beth Milito, senior executive counsel at the National Federation of Independent Business. "But finding staff willing and able to come in is challenging."

  • Dozens of laundromats across New York City have closed down either because they're too busy or because they're concerned about employees' health, reports The City.
  • Legendary New York food store Kalustyan's has closed for the first time in 75 years due to the high volume of orders it has been receiving.
  • Small trash collectors around the U.S. are dealing with larger-than-ever volumes of residential garbage. Republic Services, a waste management company with operations in several states, says it expects volumes to increase by 30% during the pandemic.
  • Many child care facilities that are open to care for the kids of health care workers and other essential staff are struggling to maintain required ratios between children and caretakers, and may be forced to close.
  • Small trucking and freight companies are seeing unprecedented demand for package delivery as the entire country shops from home, but they're also facing employee shortages as workers gravitate to the giants paying premium wages for tens of thousands of new truckers and warehouse workers.
  • Bodegas and small grocers who are fielding the same panicked, bulk shoppers as the big chains are often unable to restock their empty shelves as the food suppliers focus on keeping the Costcos and the Walmarts stocked, Milito says.

The bottom line: Even in booming industries, small businesses are in deep trouble.

Go deeper

Black workers overrepresented in essential work during coronavirus pandemic

Reproduced from Economic Policy Institute; Chart: Axios Visuals

On a percentage basis more white workers have lost their jobs since February, but that has largely been because black workers in the U.S. are much more likely to work front-line jobs considered essential during the coronavirus pandemic.

By the numbers: Black workers make up about one in nine workers overall, but about one in six front-line-industry workers, according to a study from the Center for Economic and Policy Research.

Updated 5 hours ago - Health

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

Florida reported on Wednesday its largest number of new novel coronavirus cases in a single day since April 17. 1,317 people tested positive to take the state total to 58,764, per the state's health department. Despite the rise, Florida Gov. Ron DeSantis said bars and clubs could reopen on Friday.

By the numbers: More than 107,000 Americans have died of the coronavirus and over 1.8 million people have tested positive, per data from Johns Hopkins. More than 479,000 Americans have recovered and over 18 million tests have been conducted.

23 hours ago - Health

Private equity benefits from HHS loans meant to help health care providers during pandemic

Illustration: Lazaro Gamio/Axios

Private equity companies have borrowed at least $1.5 billion from the federal government through programs intended to provide emergency funding to struggling health care companies during the coronavirus pandemic, Bloomberg reports.

Between the lines: Some of the hospitals, clinics and treatment centers benefiting from the Medicare loans — which could plausibly end up being forgiven — are owned by the richest investment firms.