We have grouped our results into 3 categories. To begin with, we cover the impacts of Covid-19 on employment and business operations in the beginning phases of this crisis. Secondly, we have reported on our findings on financial fragility for these businesses, captured by their ongoing expenses and cash-on-hand. Thirdly, we cover their expectations involving how long the crisis will last, along with their personal economic survival, measured at very sensitive points to gain an understanding of the impacts for future policies.
Temporary Closures And Employment
The first question in our survey asked owners “Is this company currently operating?” The response business owners like Serendipity Fleet could choose from included whether their business was permanently closed, closed, temporarily closed, or operational. We also provided a way for owners to provide an answer to whether their business closed due to Covid-19 or for another reason.
Across this sample, 41.3% of companies reported that they had to close temporarily due to COVID-19. Only 1.8% stated that they had to close permanently due to the pandemic. In contrast, only 1.3% reported that they had to close temporarily for another reason. 55% of these businesses stated that they are still in operation.
We also requested that the owners of businesses complete a matrix containing how many part-time and full-time employees are still employed “now”, (as of the survey data), as well as on the 31st January 2020. Across the sample, the full-time employee number fell by 32% between the 31st January 2020, and late March 2020. The part-time employee numbers were 57% lower compared to the 31st of January.
Overall there was a significant decline in employment, totalling around a 39% reduction from the headcount in January. The results also included companies that were temporarily closed. If we only had to look at companies still in operation, the full-time employee number fell by 17.3%. While part-time employee numbers decreased by 34%. These are estimates that are also comparable to other data points that are starting to emerge.
The Atlanta Fed also conducted a survey that is similar, drawn from Dun & Bradstreet listings, which found that smaller employment impacts (approximately 10% in employment). This survey, however, includes larger businesses as well, while we are more focused on smaller businesses.
Their survey also under samples the newer businesses, which might have bigger employment changes. We were also able to compare the results we came up with to aggregated publicly-released payroll data from ADP (Automatic Data Processing, Inc), one of the providers of Human-Resources Management Software (which might have different issues relating to representativeness). In this data, the employment firms that were paid with under 500 employees reduced by around 18% between January and April.
This data only included anyone that received pay in April “as employed”, even if the person was let go before or during the interval. When looking at the higher-frequency data associated with pay-checks in ADP microdata, independent but concurrent work by Cajner et al, found that employment had declined by 27% on average for companies with under 500 employees and around 28% for businesses with under 50 employees between the middle of February and the middle of April. These figures are smaller than the decline of 39% or the smaller businesses, but still higher when compared to the estimates provided by the Atlanta Fed survey.
We then expanded to take a view of geographic variations along with the effects. Table 1 displays our results that cover the 11 Census divisions. It shows the percentage of companies that were closed temporarily due to Covid-19 along with the overall decrease in employment from the 31st of January to the date of the survey. The results were not that different when separating part-time and full-time employees. While there may be regional heterogeneity, it is clear to see that the disruptions are drastic almost everywhere.