New COVID-19 lockdowns, mitigation tactics hurt small biz

Dec. 21, 2020

The COVID-19 pandemic is not over.

Novel coronavirus cases continue to climb across the United States. In response, California has implemented a second stay-at-home lockdown order and other states could follow suit.

The ongoing public health crisis will likely cause more businesses to fail and more workers to file for unemployment as states embrace temporary mitigation measures, including the suspension of in-person dining and indoor entertainment.

How did we get here?

The United States has recorded more than 17 million coronavirus cases and well over 300,000 deaths since the pandemic began, according to the Centers for Disease Control and Prevention. This contagion, in turn, has hamstrung America’s economy.

The U.S. unemployment rate stood at 3.5% in February 2020 — a historically low number — but surged to 14.7% in April during the first wave of infections.

Many states, especially New York and New Jersey, imposed strict economic lockdowns requiring beauty salons, gyms and other non-essential businesses to close until further notice and schools to cease in-person instruction to help slow the spread of COVID-19.


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Yelp Inc. released a report in September 2020 saying nearly 100,000 U.S. businesses have permanently closed as a direct result of the pandemic. But states soon began to reopen as warmer weather and lower rates of infection fueled demand for goods and services.

The nation’s unemployment rate edged down to 6.7% in November 2020 with the resumption of economic activity, according to new data reported by the U.S. Bureau of Labor Statistics. This, however, is the calm before the storm.

States like Pennsylvania saw an explosion of new daily COVID-19 infections since Thanksgiving. Democratic Gov. Tom Wolf quickly responded by imposing new restrictions on Pennsylvania’s restaurants, bars and casinos. From Dec. 12 through Jan. 4, 2021, indoor dining is prohibited in the Keystone State, among other prohibitions.

Based upon what happened the first time, we know that any subsequent lockdowns will have a devastating impact on the U.S. economy, especially on small businesses and independent workers.

“The loss of revenue many small businesses will experience as a result of this latest shut down could be catastrophic,” Allan Zaremberg of the California Chamber of Commerce said in a Dec. 3 statement in response to the Golden State’s new lockdown order. “We appreciate that the governor has allowed retail to stay open even if it is at a reduced capacity. With so many small businesses relying on revenue from the holiday shopping season, we are encouraging people to take advantage of local retail establishments to do their holiday shopping.”

Nationwide, food establishments may fall into a double-dip recession as states continue to combat COVID-19.

“For nearly nine months, restaurants — our nation’s second-largest private sector employer — have been in an economic free fall as a result of mandated closures and capacity limits due to the coronavirus pandemic,” the National Restaurant Association said in a letter dated Dec. 7, 2020, to congressional leaders. “We predict that as of today, 17% of restaurants — more than 110,000 establishments — are completely closed.”


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Newly developed vaccines by Pfizer Inc. and Moderna Inc. have begun to ship after receiving emergency use authorization. Data show both shots “may be effective in preventing COVID-19,” according to the U.S. Food and Drug Administration, which greenlighted both vaccines in mid-December.

With new lockdowns or restrictions being imposed from coast to coast, the National Restaurant Association says eateries should prep for unexpected expenses, continue to look for new revenue streams and embrace technologies promoting best practices in accounting and financial management. This advice has universal appeal across industries.

Indeed, any business or worker should prepare for the worst, because it is not clear how long it will take for America to crush this virus once and for all.

“It is my hope that all Americans will protect themselves by getting vaccinated when the vaccine becomes available to them,” Dr. Anthony Fauci, America’s top infectious disease expert, said in a Dec. 18 press statement. “That is how our country will begin to heal and move forward.”

Independent contractors and self-employed individuals became eligible for Paycheck Protection Program or economic injury disaster loans after Congress approved a $2 trillion CARES Act in March. Federal lawmakers largely agree that more stimulus is needed to help bolster America’s virus-battered economy.


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