When thinking about the high unemployment rate and the damage to the job market in the United States created by the coronavirus, many only consider corporations. However, small businesses in the US, as well as in other developed nations, are the backbone of a running economy – keeping them functioning is key to any government.
Due to COVID-19, no less than thirty million small-businesses jobs are said to be vulnerable – employees are predicted to be furloughed or completely laid off. Moreover, most of them are in companies with less than a hundred employees.
In addition, 54% of companies with less than five hundred employees are likely to get rid of some of them.
Customer Service, Food Service, and Sales – The Most Affected Categories
The interesting part regarding the small-business sector is that more than half of the people employed are concentrated in industries like accommodations, social assistance, healthcare, or retailing. These are sectors which have been strongly affected by the economic lockdown and, in particular, by the slowdown in consumption, traveling, or spending.
Education plays an important role too. Jobs requiring at least a bachelor’s degree or more, are not so vulnerable than low-skilled jobs. Administration and waste, agriculture, or retail trade are categories in jeopardy when compared with finance and insurance, education, or management of companies.
Such a detailed study, like the one above, can be used as a benchmark for other developed countries. Even though differences from country to country exist, most developed nations have a service-based economy, with an emphasis on higher education and a strong tourism sector.
Therefore, it helps to identify the challenges in different countries and the support small businesses need to survive the coronavirus outbreak. So far, both central banks and governments acted strongly, with massive monetary and fiscal stimulus. Yet, millions of workers lost their jobs, with more to follow.
Small businesses are the pillar of the private sector, and the first step entrepreneurs take and act as a strong source of employment, innovation, and competition. Both owners and employees need resources to weather the current storm. The longer the crisis lasts, the more likely the jobs more cuts will occur and increase the unemployment claims statistic.