Small Businesses Ask for More Aid to Ward Off COVID’s Economic Disaster
WASHINGTON – Small business representatives made a plea to Congress Thursday for assistance in getting Americans back to work after millions of workers lost their jobs during the COVID-19 pandemic.
They said that without financial assistance and retraining of the workforce many jobs could be permanently lost.
The Federal Reserve Bank is projecting that U.S. gross domestic product fell a record 35.2% in the second quarter of this year.
Unemployment shot up from 3.5% in February to 14.7% in April. It now stands at 11.1%.
House Small Business Committee Chairman Jason Crow, D-Colo., said during the hearing that “42% of jobs that disappeared during the pandemic may never return.”
Many of the jobs are concentrated in restaurants, bars, clothing stores and other small businesses that say they will close up shop without government assistance.
“We might need to rethink incentives we provide employers,” Crow said.
So far, the Trump administration’s primary assistance to small businesses has been the $360 billion Economic Injury Disaster Loan program. It offers grants and low-interest loans to business owners to help them pay six months of their general operating expenses.
One new incentive being considered in Congress is the PPE Tax Credit Act introduced in the House this week.
The bipartisan bill would offer employers tax credits for purchasing personal protective equipment (PPE) for themselves and employees to prevent the spread of COVID-19.
Independent contractors, small businesses and nonprofit organizations could claim as much as $25,000 for the tax credit.
For small businesses, the pandemic means “many are facing atypical expenses,” said Rep. Troy Balderson, R-Ohio, who co-sponsored the bill.
Witnesses at the hearing said job retraining could be crucial for getting the unemployed back into the workforce.
Joe Schaffer, president of Laramie County Community College in Wyoming, suggested that the federal government expand its Pell Grant program.
The grants are awarded based on need to low- and middle-income students. The money usually is paid directly to a college as a credit toward a student’s tuition. In some cases it can be a cash distribution to students.
“We have to find ways to help people get assistance and training and get back to work,” Schaffer said.
Community colleges are trying to focus their job training curriculum “where the needs are,” Schaffer said. Examples he mentioned included health care and technology.
Kelly Moore, vice president of GKM Auto Parts Inc. in Zanesville, Ohio, said job training expenses have hit small businesses hard.
“It is causing a strain on the businesses when they can least afford the strain,” she said.
Instead, some businesses are hiring inadequately trained workers who lose their jobs after failing to demonstrate basic skills, she said.