Apr 1, 2020 - Economy & Business

Very small businesses are bearing the brunt of the coronavirus job crisis

Photo: Melina Mara/The Washington Post via Getty Images

Small businesses were responsible for the entirety of the 27,000 net jobs that the private sector shed in March, according to a closely watched employment report by payroll provider ADP.

Why it matters: The extent of job losses is much worse than the ADP survey suggests, as it was conducted before states stepped up coronavirus containment efforts. But it shows that America's smallest businesses were hit hardest first, even as bigger corporations continued hiring.

By the numbers: Businesses with fewer than 50 employees shed 90,000 jobs in March, ADP found — making it the worst job loss for that group since April 2009, per Bloomberg. In February, those employers added 24,000 jobs.

  • The private sector's net job loss of only 27,000 was possible only because larger businesses were still adding workersalbeit at a slower pace than in prior monthsoffsetting some of the losses from smaller firms.
  • Companies with between 50–499 employees added 7,000 jobs.
  • Businesses with more than 500 but less than 1,000 workers added 1,000 jobs, while the largest businesses (with 1,000+ employees) added 55,000 jobs.

What to watch: The coronavirus stimulus package passed by Congress allocates $350 billion in relief for small businesses, which can apply for loans starting on Friday.

  • The loans are meant to incentivize businesses to rehire workers.
  • Cash that's used to rehire and pay workers, among other things, doesn't need to be repaid.

Yes, but: The program, which works on a first-come, first-served basis, likely won't be large enough to satisfy the needs of all of America's small businesses.

  • If that's the case, Treasury Secretary Steven Mnuchin will go back to Congress and ask for more funding, he told CNBC Wednesday.

The bottom line: "Payrolls of small businesses are most vulnerable to the drop-off in activity seen as a result of the outbreak," Rhea Thomas, an economist at Wilmington Trust, wrote in a note on Wednesday.

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What we expect from our bosses

Illustration: Eniola Odetunde/Axios

Workers — especially millennials and Gen Zers — are paying close attention to the words and actions of their employers during national crises, such as the protests following the killing of George Floyd in police custody.

Why it matters: American companies have an enormous amount of wealth and influence that they can put toward effecting change, and CEOs have the potential to fill the leadership vacuum left by government inaction. More and more rank-and-file employees expect their bosses to do something with that money and power.

Trump backs off push to federalize forces against riots

Photo: Brendan Smialowski /AFP via Getty Images

A day after threatening to federalize forces to snuff out riots across the country, the president appears to be backing off the idea of invoking the Insurrection Act, sources familiar with his plans tell Axios.

What we're hearing: Aides say he hasn’t ruled out its use at some point, but that he's “pleased” with the way protests were handled last night (apart from in New York City, as he indicated on Twitter today) — and that for now he's satisfied with leaving the crackdown to states through local law enforcement and the National Guard.

Updated 2 hours ago - Politics & Policy

Updates: George Floyd protests continue for 8th day

Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

Protests over the death of George Floyd and other police-related killings of black people continued Tuesday across the U.S. for the eighth consecutive day, prompting a federal response from the National Guard, Immigration and Customs Enforcement and Customs and Border Protection.

The latest: The National Park Service said in a statement Tuesday that while it "is committed to the peaceful expression of First Amendment rights," it "cannot tolerate violence to citizens or officers or damage to our nation’s resources that we are entrusted to protect."