States facing cash crunch amid coronavirus pandemic
States are asking for financial aid from the government while coronavirus hits hard. FOX Business’ Hillary Vaughn with more.
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More than 26 million Americans have lost their jobs as the coronavirus pandemic has shut down swaths of the U.S. economy, but according to a new report released by the Pew Research Center, millions more who work in industries deemed high-risk could be impacted by the outbreak.
More than four in 10 businesses — or 2.4 million out of the 5.3 million studied — operate in higher-risk industries likely to be impacted by the virus, according to a Pew Research Center analysis of federal government data. At least one million of those businesses are in retail trade, or accommodations and food services, one of the industries hit hardest by the crisis.
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The typical business analyzed by Pew was small: The workers earned an average of $40,194, and nearly three-fourths had annual sales lower than $1 million. Businesses considered “high risk” also tended to pay their employees less (about $28,259 annually as of 2016).
“Thus, as businesses in higher-risk industries confront uncertain economic times, their fortunes mostly imperil low-wage workers,” the study said.
But the economic risk from the virus varies based on demographic group, according to the study: Men, white or Asian entrepreneurs and individuals over the age of 50 are more likely to be business owners than their counterparts.
Pew found that in 2016, men were the majority owners of nearly two-thirds of businesses in the country, while women were the majority owners of about 21 percent (the remaining 15 percent of businesses were controlled equally by men and women).
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At the same time, however, women, Asian and foreign-born entrepreneurs are more likely to operate within a high-risk industry. Women are the principal owner of 25 percent of businesses deemed to be “risky,” in part of their bigger role as owners in health care (33 percent) and the social assistance (27 percent) industry.
Business owners tend to be older and more educated compared to the U.S. workforce. About half of business owners are over the age of 55 and have graduated from college. By comparison, only 23 percent of all employed workers are 55 or older. Forty percent are college graduates.
To help small businesses weather the economic storm, Congress last month created the $349 billion Paycheck Protection Program, which offers low-interest loans to businesses with fewer than 500 employees. If at least 75 percent of the money goes toward maintaining payroll, the federal government will forgive the loan.
On Friday, President Trump signed into law a bill that approved an additional $310 billion in funding for the program.
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