Small Business Owners & Employees (Kaleigh Rios)
Fact-Checked Source: "Small Businesses Call for More Help During COVID-19 Crisis" by CBC News.
A CBC News interview conducted with two small business owners about the devastating impacts the COVID-19 shutdown has had on their employees, their personal livelihood, and their companies from a broader financial standpoint.In order to better understand the concerns of these small business owners and to verify claims made throughout the interview regarding the actions of the federal government, I did research to fact check these statements.
Five Fact Checked Claims
Last week the Feds announced that they were boosting their planned wage subsidy from 10% to up to 75%. It will apply to all businesses big and small.
Justin Trudeau did in fact increase the wage subsidy and also relaxed the parameters to qualify according to CTV News.
Part of this announcement from the Federal government where help for businesses is concerned was a $40,000 loan made available through the Business Development Bank, through banks as well. Interest for the first year and then a quarter of it-up to a quarter of it-can be forgiven.
I thought this was important to fact check because at the time of this interview this loan program had not yet been released. I was able to find through Business Development of Canada's website that this loan program can now in fact be acessed through a Canada Emergency Business Account.
This is already a narrow margin business and to just the answer to be take on more debt, keep paying your bills, but take on more debt. I don't see how that's helpful at all.
This quote coming from the the owner of a small resurant in Toronto claimed that this loan program would not advantageous for a good portion of small businesses. According to CBC News, the requirements of the loan program make it very difficult to qualify for it, and many businesses would not be able to financially handle accumulating such a large amount of debt.
There needs to be some support here. Leaving it up to the good graces of- you know banks, or your landlords is not gonna work, you know, we're particularly vunerable.
Small businesses in fact are more financially vunerable than businesses in the corporate sector according to FXStreet. Small businesses have greater difficulty paying back loans due to their typically small profit margins and sensitivity to growing interest rates.
The mall that we're in I think about three quarters of the businesses are forced to be closed now.
According to the Financial Post, all non-essential businesses were in fact forced to shut down. Only grocery stores, pharmacies, and the supply chains needed to support those stores were allowed to stay open.
Analytic Essay
Leaving the Vunerable Behind: The COVID-19 Crisis from the Perspective of Small Business Owners
The perspective conveyed in this source is a group of medical researchers concerned with pandemic preparedness of small businesses. The lead author of this source, Deron Burton, is a medical officer with the US Public Health Service. He is also a medical epidemiologist and the head of operations in Western Kenya. He has a medical degree and a master of public health from John Hopkins University, and a law degree from the University of California, Los Angeles. After the 2009 H1N1 pandemic, Burton feared that many small businesses did not use effective practices that would lower the inevitable negative impacts a pandemic would have on their business financially, their employees, and their community overall. Even in places like New York City, this research team recognized that small businesses are the backbone of the economy. If these places were to be driven out of business due to a pandemic, this would have a domino effect and result in detrimental economic consequences to New York City as a whole.
The researchers talked to many small business owners and employees to perform a careful analysis of practices they implemented prior to the H1N1 pandemic in 2009 that they believed helped to lower the potential negative effects that they may have faced otherwise. These were then shared with other small businesses and rated on a spectrum from small-large in helpfulness. The researchers conducted this study in order to gain valuable data on the best practices to prevent severe financial consequences on small businesses that can quickly lead them to a forced closing. Their intention is that this information given in their scientific paper will be shared with small businesses across the world, especially those in highly populated cities such as NYC, in hopes that when another pandemic hits these businesses will be better equipped to deal with it.
These researchers are definitely qualified to be conducting this study because of their academic backgrounds that allow them to understand pandemics from both a medical and business standpoint. It is important to include this perspective to emphasize the economic importance of small businesses even in places like New York City where they seem to be undermined by much larger corporations. It is ironic that this paper was written in 2011 and that they discussed how they were grateful and therefore optimistic that they got to talk to these business owners and give them a wake-up call of sorts to how they need to be readily prepared for a greater pandemic. The H1N1 pandemic in 2009 was very mild compared to the COVID-19 pandemic we are currently facing in 2020. Maybe the specific businesses that were involved in the study will survive because of the new practices they adopted, but it is most likely that the vast majority of small businesses throughout the world did not have a clear set strategy on how to deal with a pandemic and are going through extreme financial struggle as a result and or have been forced to close. It is essential that all small businesses take away the important lesson of having a pandemic preparation plan moving forward.
References
CBC News. (2020, April 2). Small businesses call for more help amid COVID-19 crisis | Power & Politics [Video file]. Retrieved from https://www.youtube.com/watch?v=aV4jiZeD-Uk
Stangler, D. (2020, March). How Do We Help Small Business During COVID-19 Crisis? Forbes, 10-13. Retrieved from https://www.forbes.com/sites/danestangler/2020/03/17/how-do-we-help-small-business-during-covid-19-crisis/#2527cca81b7d
This is a secondary source coming from a journalist working for Forbes who has done their research on how COVID-19 is negatively impacting small businesses financially and what we as a country should be doing to help them. Although this article is not written by a small business owner themselves, the author still provides some powerful insight on what government plans they believe should be implemented to save small businesses in these trying times. The main argument expressed in this article is that having this global emergency strike out of nowhere and the immediate recession we were thrown into proves that both our federal government and small businesses in the US are economically unprepared to handle pandemics. The author begins the article by describing the vulnerability of small businesses and how many of them essentially live paycheck to paycheck. As a result of COVID-19, a lot of them are facing disruptions within their international supply chains. Both of these issues are driving numerous businesses to close for good. Even at home businesses are suffering due to being denied access to federal aid programs as they do not fit the government’s qualifications. The author suggests that there is a lot more that could be done such as an increase in loan availability and lowering the amount of solicitations. I think this selected source provides good evidence for the perspective I am focusing on because it outlines more of the specifics of what the government is actually doing to attempt to help small businesses. Obviously, like anything else, when you are watching the news and hearing our government leaders talk about all the good they are doing to help small businesses, you may get a false impression of how much improvement these owners and employees are actually seeing. The plans that have been put out thus far are helping a percentage of small businesses, but certainly not all.
Mullainathan, S. (2020, March 20). We All Need Small Businesses. Don't Let Them Die. The New York Times, p. B8. Retrieved from https://www.nytimes.com/2020/03/19/business/small-businesses-coronavirus-help.html
This is a secondary source that comes from the perspective of the son of a former small business owner who is advocating for economic action to be taken during this pandemic. The main argument of this article emphasizes that unless the US Federal government infuses some money into small businesses or freezes commercial rent and mortgage payments, then when the economy eventually reopens a large percentage of our small businesses are going to be gone. The author of this article takes time to reflect on the 2008 financial crisis and explained how without government intervention such as the infusion of money into banks, a lot of the companies likely wouldn’t have survived. In addition to the negative consequences a shut down of a small business has on the owner, it also impacts employees and their families, as well as the greater community. This article informed readers that we should feel it is our civic duty to help the small businesses in our local communities during this time if we are financially able. I felt that this source was necessary to include because it’s easy to forget just how vulnerable the most beloved small businesses within our communities are. There are always things we could be doing to help each other during the pandemic, and one of the most powerful would be to continue to voice our concerns and push the government to take serious action in the protection of our economy.