ARTICLE
The first round of Paycheck Protection Program (PPP) Loans have now been distributed and the dollar amount is significant. If some businesses elect to have these loans ultimately forgiven, effectively converting them into grants that won’t require payback, they must maintain their pre-recession staffing levels near pre-recession salaries. Some businesses will use their PPP funds to re-hire workers that had been laid off. Other companies will use them to prevent layoffs in the future. Some organizations have undoubtedly applied for loans when they had no intention of laying anyone off at all. And other firms will allocate the funding to finance both payrolls and other, perhaps larger, expenses such as rent, equipment, materials, and utilities. The details of these decisions will have large implications for the job market. A high share of funding has gone to sectors hit hardest by the shutdowns, such as accommodation and food, retail, and construction, where layoffs have been substantial. But other sectors have received loans to fund more jobs than they have actually lost to date, indicating that the loans will be used to maintain existing payrolls. The most prominent are healthcare and professional, scientific, and technical firms. The $349 billion comprising the first round of PPP loans could fund the salaries of 39.4 million jobs nationwide, exceeding the 38.2 million layoffs that have been recorded to date. Here is a link the SBA’s PPP site that breaks down where the loans are going state by state and industry: SBA PPP INFO In California, the circumstances are strikingly different. We have an estimated 4.9 million layoffs in March and April, but PPP loans issued to California firms will support only 2.9 million jobs. The largest deficit is in the expansive accommodation and food service industry. Of the 1.7 million jobs lost, a maximum of 580,000 could be restored by the first round of PPP activity — a shortfall of 1.1 million jobs. Prominent shortfalls can also be observed in retail (416,000 jobs), entertainment and recreation (312,000 jobs), and manufacturing (122,000 jobs). Loans to the construction industry, on the other hand, could prevent more than 210,000 layoffs in addition to the jobs already lost. Loans to healthcare organizations indicate surplus funding for 199,000 jobs. What are the numbers like in Santa Cruz County? The trend is similar here as well. A huge increase in unemployment claims (UI) that jump off the chart. An example: during the first two plus months of 2020 - from January 4 through March 11 the total number of UI claims in the county were 2,668. From March 25 through April 11, we saw over 19,000 unemployment claims filed in Santa Cruz County. Again, a staggering increase never seen in such a short period of time. Now the question remains: Will those employers who received PPP funds re-hire their employees and bring that number down? So what are the short term and longer term next steps to get our economy and job re-hires turned around? Simply put, I don’t believe there is a “one-size fits” all answer to that question. The Stay at Home order is set to expire on May 3 (or it may be extended in some counties through out California). We are seeing restless citizens across the country and in particular in southern California defying the Governor’s order, while at the same time over 74% of those surveyed nationwide said it is too soon to lift the order. The complexity of limited scientific data, the speed of the COVID-19 spread and the “bend the curve” as fast as we can are upon us. Governor Gavin Newsom has promised a “bottom-up approach” to re-opening that is responsive to regional differences across a vast state, but he has provided cities and counties with little flexibility so far. During his daily briefings last week, the Governor repeatedly cautioned local elected officials about “taking the parachute off before we land,” and said Thursday that he would be able to loosen the stay-at-home order sooner if “all of us are checking off the same list.” Here is the Governor’s six points for California’s Road Map to modify the State’s Stay at Home Order: https://www.gov.ca.gov/wp-content/uploads/2020/04/Update-on-California-Pandemic-Roadmap.pdf In Santa Cruz County, we’ve re-opened our beaches and parks — but not parking lots for those areas — after closing them for a week around Easter. Last week, some beaches were crammed with visitors, and last Friday public health authorities issued a reminder to obey social distancing practices, and warned that people gathering in large groups face fines of up to $1,000. What I saw over the weekend was some people following social distancing practices, while others did not. It is a balancing process where we must find common ground between safe in place or reckless behavior. On Tuesday, the Santa Cruz County Board of Supervisors received a staff report from the Santa Cruz County Health Services Director Mimi Hall outlined a plan called S. A. V. E. Lives Santa Cruz County. The plan includes what may be an 18-24 month period of “new normal” once testing and contact-tracing have ramped up — but before a vaccination or other effective therapeutic treatment is widely available. You can read more about the report here: https://www.santacruzsentinel.com/2020/04/28/coronavirus-santa-cruz-county-launches-initiative-plans-for-long-haul-ahead/. One of director’s comments seemed a little shallow on substance: It is being developed with input from county health officials, local and neighboring governments, and community stakeholders, according to Hall. And it comes as a local effort to align with California’s six-part resilience roadmap, updated on Tuesday by Gov. Gavin Newsom. A new S.A.V.E. Lives Santa Cruz County plan includes four phases of response to the coronavirus. (Santa Cruz County — Contributed) “I often say all public health is, at the end of the day, local,” Hall said. “We have our own plan to align with both the federal and state indicators for reopening our society during COVID-19 — and I don’t say after, I say during, because we’re just in the very beginning of a long haul.”It is being developed with input from county health officials, local and neighboring governments, and community stakeholders, according to Hall. And it comes as a local effort to align with California’s six-part resilience roadmap, announced last week by Gov. Gavin Newsom. The business community is keenly aware that the burden to protect the health and well-being of our employees and our customers comes first. Yet, what are safe applications of the social distancing that can be put in practice sooner than later? And which business should we target first to get the process moving? Small retail, service providers and other businesses may have shops that are too cramped to meet a social distancing order. In those instances, can the local government help offer ‘a regional’ approach and include the business community in these discussions? The future holds a lot of unknowns in charting a new normal. In looking at the Governor’s six point Roadmap he refers to Businesses, schools and child care centers: The ability for businesses, schools, and child care facilities to support physical distancing. Have we worked with businesses to support physical distancing practices and introduced guidelines to provide health checks when employees or the general public entering the premises? Do we have supplies and equipment to keep the workforce and customers safe? You can’t answer those questions unless you begin the discussion between our local public health officers and the business community. Why has the county public health officers not reached out to the business community to seek our input and ideas of how to meet the health and well-being while keeping an eye toward the future of our economy? The two must diverge. Let’s start that conversation now so we can be prepared to take the appropriate and safe steps in the recovery process.
The first round of Paycheck Protection Program (PPP) Loans have now been distributed and the dollar amount is significant. If some businesses elect to have these loans ultimately forgiven, effectively converting them into grants that won’t require payback, they must maintain their pre-recession staffing levels near pre-recession salaries.
Some businesses will use their PPP funds to re-hire workers that had been laid off. Other companies will use them to prevent layoffs in the future. Some organizations have undoubtedly applied for loans when they had no intention of laying anyone off at all. And other firms will allocate the funding to finance both payrolls and other, perhaps larger, expenses such as rent, equipment, materials, and utilities. The details of these decisions will have large implications for the job market. A high share of funding has gone to sectors hit hardest by the shutdowns, such as accommodation and food, retail, and construction, where layoffs have been substantial. But other sectors have received loans to fund more jobs than they have actually lost to date, indicating that the loans will be used to maintain existing payrolls. The most prominent are healthcare and professional, scientific, and technical firms.
The $349 billion comprising the first round of PPP loans could fund the salaries of 39.4 million jobs nationwide, exceeding the 38.2 million layoffs that have been recorded to date. Here is a link the SBA’s PPP site that breaks down where the loans are going state by state and industry:
SBA PPP INFO In California, the circumstances are strikingly different. We have an estimated 4.9 million layoffs in March and April, but PPP loans issued to California firms will support only 2.9 million jobs.
The largest deficit is in the expansive accommodation and food service industry. Of the 1.7 million jobs lost, a maximum of 580,000 could be restored by the first round of PPP activity — a shortfall of 1.1 million jobs. Prominent shortfalls can also be observed in retail (416,000 jobs), entertainment and recreation (312,000 jobs), and manufacturing (122,000 jobs).
Loans to the construction industry, on the other hand, could prevent more than 210,000 layoffs in addition to the jobs already lost. Loans to healthcare organizations indicate surplus funding for 199,000 jobs.
What are the numbers like in Santa Cruz County? The trend is similar here as well. A huge increase in unemployment claims (UI) that jump off the chart. An example: during the first two plus months of 2020 - from January 4 through March 11 the total number of UI claims in the county were 2,668. From March 25 through April 11, we saw over 19,000 unemployment claims filed in Santa Cruz County. Again, a staggering increase never seen in such a short period of time. Now the question remains: Will those employers who received PPP funds re-hire their employees and bring that number down?
So what are the short term and longer term next steps to get our economy and job re-hires turned around? Simply put, I don’t believe there is a “one-size fits” all answer to that question.
The Stay at Home order is set to expire on May 3 (or it may be extended in some counties through out California). We are seeing restless citizens across the country and in particular in southern California defying the Governor’s order, while at the same time over 74% of those surveyed nationwide said it is too soon to lift the order. The complexity of limited scientific data, the speed of the COVID-19 spread and the “bend the curve” as fast as we can are upon us. Governor Gavin Newsom has promised a “bottom-up approach” to re-opening that is responsive to regional differences across a vast state, but he has provided cities and counties with little flexibility so far. During his daily briefings last week, the Governor repeatedly cautioned local elected officials about “taking the parachute off before we land,” and said Thursday that he would be able to loosen the stay-at-home order sooner if “all of us are checking off the same list.”
Here is the Governor’s six points for California’s Road Map to modify the State’s Stay at Home Order: https://www.gov.ca.gov/wp-content/uploads/2020/04/Update-on-California-Pandemic-Roadmap.pdf
In Santa Cruz County, we’ve re-opened our beaches and parks — but not parking lots for those areas — after closing them for a week around Easter. Last week, some beaches were crammed with visitors, and last Friday public health authorities issued a reminder to obey social distancing practices, and warned that people gathering in large groups face fines of up to $1,000. What I saw over the weekend was some people following social distancing practices, while others did not. It is a balancing process where we must find common ground between safe in place or reckless behavior. On Tuesday, the Santa Cruz County Board of Supervisors received a staff report from the Santa Cruz County Health Services Director Mimi Hall outlined a plan called S. A. V. E. Lives Santa Cruz County. The plan includes what may be an 18-24 month period of “new normal” once testing and contact-tracing have ramped up — but before a vaccination or other effective therapeutic treatment is widely available. You can read more about the report here: https://www.santacruzsentinel.com/2020/04/28/coronavirus-santa-cruz-county-launches-initiative-plans-for-long-haul-ahead/. One of director’s comments seemed a little shallow on substance: It is being developed with input from county health officials, local and neighboring governments, and community stakeholders, according to Hall. And it comes as a local effort to align with California’s six-part resilience roadmap, updated on Tuesday by Gov. Gavin Newsom.
A new S.A.V.E. Lives Santa Cruz County plan includes four phases of response to the coronavirus. (Santa Cruz County — Contributed)
“I often say all public health is, at the end of the day, local,” Hall said. “We have our own plan to align with both the federal and state indicators for reopening our society during COVID-19 — and I don’t say after, I say during, because we’re just in the very beginning of a long haul.”It is being developed with input from county health officials, local and neighboring governments, and community stakeholders, according to Hall. And it comes as a local effort to align with California’s six-part resilience roadmap, announced last week by Gov. Gavin Newsom.
The business community is keenly aware that the burden to protect the health and well-being of our employees and our customers comes first. Yet, what are safe applications of the social distancing that can be put in practice sooner than later? And which business should we target first to get the process moving? Small retail, service providers and other businesses may have shops that are too cramped to meet a social distancing order. In those instances, can the local government help offer ‘a regional’ approach and include the business community in these discussions?
The future holds a lot of unknowns in charting a new normal. In looking at the Governor’s six point Roadmap he refers to Businesses, schools and child care centers: The ability for businesses, schools, and child care facilities to support physical distancing.
Have we worked with businesses to support physical distancing practices and introduced guidelines to provide health checks when employees or the general public entering the premises? Do we have supplies and equipment to keep the workforce and customers safe?
You can’t answer those questions unless you begin the discussion between our local public health officers and the business community. Why has the county public health officers not reached out to the business community to seek our input and ideas of how to meet the health and well-being while keeping an eye toward the future of our economy? The two must diverge. Let’s start that conversation now so we can be prepared to take the appropriate and safe steps in the recovery process.