{"id":853,"date":"2020-04-17T23:30:00","date_gmt":"2020-04-18T04:30:00","guid":{"rendered":"http:\/\/thefilipinochronicle.com\/backup\/?p=853"},"modified":"2020-06-30T19:20:09","modified_gmt":"2020-07-01T00:20:09","slug":"americans-and-businesses-struggling-to-stay-afloat-during-covid-19-crisis","status":"publish","type":"post","link":"https:\/\/thefilipinochronicle.com\/backup\/2020\/04\/17\/americans-and-businesses-struggling-to-stay-afloat-during-covid-19-crisis\/","title":{"rendered":"Americans And Businesses Struggling To Stay Afloat During COVID-19 Crisis"},"content":{"rendered":"\n

By Edwin Quinabo

Americans are shook up and reeling over two simultaneous crisis caused by the COVID-19 pandemic — public health and the economy. They are also conflicted in a tug-of-war of what to do. On one side there is a desire to reopen and return to business as usual; while pulling at the other end is a reality that staying steadfast to social distancing must continue.

President Donald Trump and his conservative allies suggest that it may soon be time to get people back to work. Health experts overwhelming say it is premature, at least in the next month.

\u201cYou\u2019ve got to be realistic and you\u2019ve got to understand that you don\u2019t make the timeline. The virus makes the timeline,\u201d said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

Even if the president did reopen the economy (and governors complied \u2013 that\u2019s a big question mark), economists are realistic in saying confidence to resume business as usual would still be shaky at best while COVID-19 is still peaking.

Economic experts also concede that until a vaccine is created or deaths-infectious rates drop dramatically — open for business or not — people will not suddenly be the consumers they were spending at the rates prior to the COVID-19 outbreak. Bouncing back will take time.

No one really knows how or when the double-pronged crisis will unfold. What\u2019s certain is the economy is in a deep recession; and Americans are needing all the help they can get to make it through the storm.<\/em><\/strong><\/p>\n\n\n\n

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Economy on life support
<\/strong>It doesn\u2019t come as a surprise that ordering residents to stay at home, avoid most non-essential business activity, restaurants, theaters, shopping (apart from groceries), traveling, most in-person services, and gatherings of groups 10 or more would dramatically hurt the economy and jobs.

In the latest jobs report (week ending March 28) an unheard-of figure of 6.6 million Americans filed for unemployment benefits, putting the total number of people out of work in just three weeks to more than 16 million.

For perspective, that is about 13-15 percent of the total workforce in the U.S. Just last year, unemployment rates fluctuated under the 5 percent range. It took only a few weeks of the pandemic to spike numbers of jobs loses to what normally would take years in a regular recession.

Since the federal government has been collecting data of the unemployed, the worst week in the history came in a week in September 1982 when 680,000 people claimed unemployment benefits. A close second came during the last recession a week in March 2009 with 665,000 new claims. Today\u2019s unemployment numbers crushed all previous records.

Economists say the situation could get bleaker with unemployment rising as high as 30 percent. Historically, Labor Department figures of the unemployed is underreported of what actual jobs losses are. In theory, economists\u2019 worst case prediction is that 3 out of every 10 Americans could be out of work by the end of the year.

But a new poll by Pew Research Center suggests that the country may already be there. The poll found a third of Americans have someone in their household who\u2019s been laid off or lost pay.

The latest unemployment figures from the Hawaii State Department of Labor and Industrial Relations show 53,111 Hawaii residents filed unemployment claims for the week ending in April 4.

For small-to medium and large companies operating during this stay-at home period, many have reported drops in revenues and activity.

Vilma Fuentes, Doctor of Physical Therapy and Manager of OptimalCare Rehab, LLC, an outpatient physical therapy and therapeutic massage company, said their business has seen a decrease in patients by 50-80 percent that started in February. She said this month, April, has been the worst.

\u201cPatients have been cancelling their appointments due to fear of going out. There has been a decrease in patients\u2019 referrals from doctors\u2019 offices. Some referring physicians (that we work with) have temporarily closed their practice.

\u201cThe estimated gross drop of revenues is significant and profound, about 75-80 percent from norms. It\u2019s like a chain reaction. Most people are out of work. We have less patients,\u201d said Fuentes.

In hopes of surviving and making it through the crisis, many employers have furloughed employees (temporarily place their position on hold without pay) or reduced employees\u2019 work hours.

OptimalCare Rehab, LLC has resorted to both furloughing and reducing work hours for some of their employees. \u201cOur employees can go back to work if business will be back on track. However, we expect it to be gradual,\u201d said Fuentes.

Asked how the public could help her business, she said \u201csafety to our patients with this COVID-19 pandemic is our concern. The public can help our business by continuing to visit our facility. They can feel safe with all the safety measures (we\u2019re taking).\u201d

She said staff wear masks and gloves at all times, wash and sanitize their hands, as well as sanitize all equipment and door knobs. She said patients and staff who could be sick are sent home as a precaution.

For Jeoffrey and Cheryl Cudiamat, owners of three businesses in Hawaii, the impact of the COVID-19 crisis has been a mixed bag. For their company One, Structural Hawaii, Inc., a structural & civil engineering design and consultation firm, and architectural drafting firm, Cheryl said they have experienced a few projects put on hold due to homeowners whose jobs are now uncertain. On the plus side, she said new projects have also come through because clients have been taking advantage of the low interest rate.

\u201cWe cannot ascertain at this point whether there is a significant drop in revenue, but thankfully we are holding steady at the moment. It can certainly change any day. We will see the effects of COVID-19 probably in this next month,\u201d said Cheryl.

For their second business, Keiki Care Center of Hawaii, Inc. a preschool education center located in Pearl City, it is temporarily closed due to the State DOE\u2019s directive of closing schools. But they plan to reopen as soon as Gov. David Ige gives the all-clear.

She said they are not collecting tuition during the closure and have applied for the SBA loan assistance programs. \u201cWe do still have to cover employee health insurance, rent, other insurances, etc. We bank with First Hawaiian Bank, and I am grateful that they were on the ball with rolling out the PPP loan program on April 3.\u201d

On the status of their third business Structural Builders, Hawaii, Inc. a general contracting firm, Cheryl said, \u201cWe thankfully just obtained a new bonded-project in March, and that is keeping our crew steadily busy, and should hold us for a few months until completion.\u201d

For Keiki Care Center, all of their employees are furloughed. \u201cFor Structural Builders Hawaii, Inc., construction was deemed essential, so it is still thankfully ongoing. And for Structural Hawaii, Inc., we have identified which employees are \u2018essential\u2019 and have offered all employees the opportunity to adjust their schedule if they are not comfortable working full-time at this time. We definitely do not intend to lay off any workers.\u201d

Cheryl said she hopes the public understands the important role small businesses play in the economy and that they have empathy for small businesses. \u201cIf we disappear, then many jobs will disappear.\u201d

Melody Calisay, Ph.D. is the President and CEO of East West Marketing, Inc., an importer, and wholesaler of Filipino dry food products. Her businesses is doing well during this time. \u201cFood is always considered the last frontier. This is a basic need that people will buy in time of crisis. We did good in the past two months, people are panic buying and storing food amid this COVID-19 pandemic.\u201d

She did not have to furlough any employees. Calisay said she will probably seek help from the stimulus package because she isn\u2019t sure what will happen in the next month or so. She said she likes what government is doing by providing loans to small businesses to help pay for rent, payroll, and continued operations. Calisay encourages the community to support local businesses.

Economic Growth Lowered for 2020
<\/strong>No one knows how impactful COVID-19 will be on small businesses in the long-term, or how many will go under.

Already, the University of Hawai\u2019I Economic Research Organization (UHERO) has sharply lowered its economic forecast for the state. A UHERO report on the COVID-19 crisis states while new infections have slowed markedly in Asia, the spreading of the virus across the entire U.S. suggests a more prolonged outbreak is in the cards. \u201cAnd the longer the virus spreads, the greater the human and economic toll.\u201d

The state\u2019s Department of Business, Economic Development and Tourism (DBEDT) also lowered Hawaii\u2019s economic growth forecast for 2020 to 0.5 percent from the 1.2 percent projected in the 4th quarter of 2019. The forecast was revised downward mainly because of the COVID-19 outbreak.

\u201cWe face a globally driven COVID-19 event that is dynamically evolving,\u201d said DBEDT Director Mike McCartney. \u201cWe remain focused on controlling and preventing the spread in our state. At the same time we are planning for a recovery action plan when Hawaii\u2019s communities are ready and the visitors in our major markets are ready to visit. Volatility in the market will likely continue until COVID-19 becomes controlled.\u201d

On when the economy could begin to stabilize, Hawaii economist Paul Brewbaker said during a joint presentation to three REALTOR\u00ae associations on two islands, \u201cIf we get the daily (COVID-19) case counts down, we implement contact tracing, isolation, and quarantine, maybe in a year — maybe in 18 months — we\u2019ll reach the day when a version of herd immunity or a vaccine becomes available, But my own impression is that the state is not leading as much as following, and not following fast enough.\u201d<\/p>\n\n\n\n

We face a globally driven COVID-19 event that is dynamically evolving. We remain focused on controlling and preventing the spread in our state. At the same time, we are planning for a recovery action plan when Hawaii\u2019s communities are ready and the visitors in our major markets are ready to visit. Volatility in the market will likely continue until COVID-19 becomes controlled. <\/strong><\/p>\u2014Mike McCartney, DBEDT Director<\/strong><\/cite><\/blockquote>\n\n\n\n

Efforts to soften the Impact of the economic fallout
<\/strong>The Federal Reserve stepped in once again, announcing new and expanded programs that could pump $2.3 trillion into the economy. Wall Street reacted positively, holding steady, even as it already lost all the gains from years of a bullish market.

But investor confidence in the economy more significantly came from President Donald Trump and Congress\u2019 passage of three stimulus bills (called three phases of coronavirus assistance): the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, the Families First Coronavirus Response Act, and most recent, the Coronavirus Aid, Relief and Economic Security Act or the CARES Act.

PHASE 1, Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020
<\/strong>CPRSAA is the first coronavirus relief effort that allocates $8.3 billion mostly to go towards coronavirus vaccine research and development. It also includes funding for medical supplies, health-care preparedness and community health centers.
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PHASE 2, The Families First Coronavirus Response Act<\/strong>
FFCRA is the second stimulus bill that primarily focuses on helping American families and workers. $104 billion will fund:<\/p>\n\n\n\n