Pandemic’s Impact on PA Snapshot Illustrates How Health Crisis, Closures Affect Keystone State, Businesses
Eileen Anderson is the director of Government Relations at SMC Business Councils, which merged with the Manufacturer & Business Association in 2019. Contact her at eileenanderson@smc.org.
Editor’s Note: This article includes the most current figures as of July 9, 2020.
Sir Isaac Newton had it right in 1687 when he proposed his First Law of Motion: A body in motion tends to stay in motion.That’s an accurate description of many businesses during these extraordinary times. What’s learned from numerous calls to MBA member companies is that many have been in motion since the March 23 shutdown. They have taken it in stride, often painfully, and dealt with many changes to operations and finances caused by the pandemic and directives from overhead.
This collection of information partially illustrates the magnitude of the COVID-19 pandemic and the instant recession it caused. While uncertainty abounds, the task for businesses is to predict what lies ahead for the remainder of the year.
The first case of COVID-19 in Pennsylvania was March 6 followed by the first death on March 18.
- Confirmed cases: 92,418
- Confirmed deaths: 6,812
Closure of all PA non-life sustaining businesses was ordered on March 23. Weeks of confusion followed. It was difficult to understand the exemption request process, why some were granted and others denied. Some businesses could not initially determine their category and closed unnecessarily. The process caused extreme frustration for businesses and lawmakers alike.
- Exemption requests reviewed: 42,000
- Exemption requests approved: 6,124
- Exemption requests denied: 12,826
Note: Estimates are from the Department of Community and Economic Development.
Pennsylvania has nearly 1 million small businesses. Eventually those businesses that closed for good will become apparent, but no one will ever know the number of businesses that closed temporarily.
When businesses shut down so does the economy. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and provided for the Paycheck Protection Program (PPP). Thousands of businesses applied for the Small Business Administration (SBA) loans. SBA gave this report on June 30:
- 165,918 PPP loans were made to PA businesses with an economic impact of $20.7 billion.
The PPP loans helped, but when businesses — both those that were closed and others that were open — suffer from weakened sales the result can be worker layoffs and furloughs.
Labor and Industry reported:
- Nearly 2.2 million workers filed claims during the 10-week period beginning March 15.
- Estimated unemployment compensation payments were $23.7 billion.
- May’s unemployment rate was 13.1 percent.
The CARES Act gave an extra $600 weekly to those on unemployment through July. It also provided stimulus checks. PA’s Independent Fiscal Office reported in late June that Pennsylvanians received 6.2 million checks with an economic impact of $10.8 billion.
In response to the pandemic and collapse of the economy, Congress passed four bills between March 4 and April 24 totaling $3.6 trillion.
- Coronavirus Preparedness & Response Supplemental Appropriations Act – $8 billion
- Families First Coronavirus Response Act – $192 billion
- CARES Act – $2.7 trillion
- PPP and Health Care Enhancement Act – $733 billion
Pennsylvania has a $25.8 billion five- month budget that keeps spending level through November. Painful cuts or incr- eased taxes will be needed to make up for lost revenue projected to be $5 billion by June 2021. The state received $4.9 billion in federal stimulus, but it cannot be used to make up for lost revenues. Stay in motion!
