The Wuhan coronavirus hasn’t just taken lives, it’s also taken livelihoods, and according to a report from the New York Times, the number of businesses COVID will claim is as astounding as it is heartbreaking.
According to the NYT, “more than 40 percent of the nation’s 30 million small businesses could close permanently in the next six months.”
Most towns and cities benefit economically from small businesses in their area. Not only do these businesses provide everything from medical care to construction and home repairs, but they also provide jobs that residents desperately need.
Small businesses collectively employ far more people than corporations do according to Entrepreneur:
Estimates place the number of small businesses in the U.S. at between 25 million and 27 million. Although many of these are “micro-companies” or are run by “solo-preneurs,” the statistics are pretty consistent in showing that 60 percent to 80 percent of all U.S. jobs are created by small businesses.
Furthermore, it’s unclear if major chains will take their place and fill in the gaps. Corporations are also feeling the hurt according to CNBC, who reported that some 150 companies have taken massive hits on their earnings, including AMD, Apple, Best Buy, Big Lots, Coca Cola, and Costco.
The environment is also unstable, making companies nervous to make any big moves reported CNBC:
“The backdrop right now is different,” Quincy Krosby, chief market strategist at Prudential Financial, told CNBC. “We don’t know in this pyramid of uncertainty under the coronavirus what happens to the economy, what happens to consumer spending, what happens to [capital expenditures].”
“The only thing that can change this pyramid is what we hear from the government in terms of alleviating some of the pain,” Krosby added. “You know that the Fed, Treasury Department and White House have to be focused on this to make certain the financial conditions stay healthy and solid.”
All of this is devastating news, and we should brace for an economic impact from this that we’ll be feeling for years to come.