The Imminent Small-Business Collapse

The Imminent Small-Business Collapse
AP Photo/Kirsty Wigglesworth

Small businesses are in free fall. Shuttered by the pandemic, local retailers and restaurants have seen sales plummet, in many cases to zero. During every other major disaster in memory—the financial crisis, 9/11, the Great Depression—these sales dropped, but they did not flatline. Main Street businesses are looking into an abyss and it’s not at all clear how far it is to the other side or how they can possibly build a bridge to get there. Most have only enough cash reserves to survive for a few weeks.

Their fate hinges on the emergency stimulus bill that Congress is negotiating this weekend. The stakes are massive. Without a substantial and rapid infusion of cash, many small businesses will have little choice but to shutter for good. If large numbers of local retailers, restaurants, service providers, and other small businesses go under, that would send millions of people to the unemployment lines and wipe out any hope of staving off a deep economic depression. It would lead to the dissolution of a broad swath of the nation’s productive capacity and precipitate a sudden and unparalleled wave of market consolidation, handing corporations like Amazon and Walmart even more economic power. And it would leave all of us who are sheltering in place facing the bleak prospect of finally emerging from our homes only to find that many of the places we most love, the very fabric of our neighborhoods, have vanished.

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