SAN ANTONIO, TEXAS
Monday, May11, 2020
COVID-19 Monday Morning Brief
Brought to you by
The San Antonio Hispanic Chamber of Commerce
MONDAY MORNING OBSERVATION –RED LIGHT, GREEN LIGHT AND FLASHING YELLOW
It’s been 7 weeks sinceSan Antonio and Bexar County issued the joint Stay Home, Work Safe order. Itis set to expire in 9 days with no indication of being extended. Last week’s news cycle was an interdependent mess of April unemployment numbers,majorbankruptcy headlines, and more alarming data on COVID-19 impact to Latino communities.
The Unemployment Numbers
Forbesdominated the marquee with “U.S. Unemployment Is at Its Highest Rate Since The Great Depression At 14.7%—With 20.5 Million More Jobs Lost In April.”The articled reported jobs in the leisure and hospitality industries were hit the hardest with 7.6 million job losses. This was followed by retail and health, each losing 2.1 million. Manufacturing, once the backbone of the U.S., lost 1.3 million jobs. Government workers weren’t immune to the negative impact, as 980,000 workers lost their jobs. If they had been counted correctly, the unemployment rate would have been nearly 20%, the article reported –https://bit.ly/2yLbxhY.
In San Antonio, Workforce Solutions Alamo (WSA) reported 42,023 more unemployment claims were filed in the first 26 days of April compared to total claims filed in March (52,388). This represented an increase of 80.2%. Almost identical to the national data, these four industries, Accommodation and Food Services, Health Care and Social Assistance, Administrative and Support and Waste, and Retail Trade accountedfor 57.5% of all claims for the Bexar County region.
A national trend and most alarming, more than half of all claimants are Hispanic (55.9%) and claims filed by minorities seem to be increasing compared to the previous week.As of today, WSA expects the number of unemployment claimants to reach between 170,00 and 193,836 for San Antonio and the surrounding county region since February 24.See Attachment
The Bankruptcy News
With headlines like “Lawyers expect tidal wave of bankruptcies due to COVID-19 pandemic,” on Fox and “Congress Urged to Bolster Nation’s Bankruptcy Courts,” in the Wall Street Journal, it is not difficult to see where the unemployment stems. According to GlobalData, coronavirus lockdowns forced about 263,000 retail stores to close temporarily and that more than 100,000 could permanently close by the end of 2025, per UBS –https://wapo.st/2WECgFa.The Streeteven went as far as predicting several major companies that could file for bankruptcy in 2020 or 2021 including Neiman Marcus, Kroger, Lowe’s, AMC Theatres, Aeromexico, and Best Buy to name a few –https://bit.ly/3clb0ls
San Antonio is not immune either. The San Antonio Business Journal is tracking the local impact onGourdough’s Riverwalk, Asteria Education Inc., Pioneer Energy Services Corp., Integrity Telecommunications LLC, Non Ducor LLC, Most Choice Healthcare LLC, Toepperwein Family Practice PA, BR Healthcare Solutions LLC, AGI DME Inc. and Salubrio LLC.The take home message locally and nationallyis that retail desperately needs a lifeline.
For a good resource to keep an eye on national companieswith local presence that are failing amid the shutdown, check outthe Coronavirus Bankruptcy Tracker –https://bit.ly/3bcShaw
The Hispanic Impact
While CNN’s Sunday late feature reported, “Latino communities in the US devastated by Covid-19,”https://cnn.it/35NbIpg the Texas Tribune was pointing to why, “Language barriers, absence of bank loans leave Latino small-business owners struggling.”
Painting a bleak picture for Hispanic small business owners, some key takeaways and learnings include that when it comes to the COVID-19 health pandemic:
- Language barriers are having adverse effects
- Government forced closuresfor weeks in a state that didn’t prohibit evictions for commercial properties is catastrophic for smaller and minority businesses
- Regulating customer limits and operating capacity is still crushing business operations
- Lack of fluent relationship with financial institutions is proving to be detrimental
- Immigrationissues are a thorny obstacle too
These circumstances point to underlying cultural and social differences that further compound the impact to Hispanic-owned businesses. Because of this, many Latino business owners have been unable to access available assistance and understand all the various resources and remain wary. The reality is that “it’s going to be very hard for them to come up with June 1’s rent if operations are at 25%,” said Luz Herrera, a law professor at Texas A&M University and Hispanic small business advisor –https://bit.ly/2Ls2Got
The importance of these interrelated economic indices is critical.First is the red light,“The Risks – Know Them – Avoid Them,” by Erin S. Bromage, Ph.D., an Associate Professor of Biology at the University of Massachusetts Dartmouth. She warns “if you don’t solve the biology, the economy won’t recover,” and gives an excellent precautionary how-to take on avoiding the risks as we give the virus more fuel and open the economy – https://bit.ly/2Lsb1bL
Then there is the greenlight,“The ABCs of the post-COVID economic recovery,” by The Brookings Institution that describes the various types of recovery at hand and what will determine the shape of the recovery. It is an interesting economic lesson examining several possibility economic recoveries –https://brook.gs/2YQ5qns
Also according to the study and perhaps more pressing is the ticking bomb we can dismantle because the damage is tied to 1) Lost human capital; 2) Businesses—bankruptcies and lower investment; 3) Household ability and willingness to spend; and 4) State and local government finances which is what I suggested in the “City should turn to the Fed for Help,” in last week’s Express-News – https://bit.ly/35NIqH5
Though it is adarklandscape and intricate environment, it is not difficult to see where this road is heading. Between the green lightsto open the economy and jump start business and the red lights to avoid the risks and pitfalls of feeding the pandemic are flashing yellow lightswarningus that all these lights should not be on at once because we are headedfor a crash.
The COVID-19 Monday Morning Brief is a product of the San Antonio Hispanic Chamber of Commerce and brought to you by Leonard B. Rodriguez, former White House Adviser to the President of the United States during 9-11 and Political Director for the Governor of New York, to keep you briefed on critical business-related focus areas during this pandemic.
An entrepreneur and Hispanic Business Magazine 100 Influential alum; he is also the award-winning author of Celebrating Outstanding Hispanics – 500 Years of Latino Pride and a 10th generation San Antonian. He currently serves as the Senior Vice President at the San Antonio Hispanic Chamber of Commerce in the Office of Small Business Programs and Services and served his prior position as the President and CEO of the City of San Antonio Westside Development Corporation.
He can be reached at firstname.lastname@example.org