So far, many of the numbers measuring the painful economic impact of the COVID-19 pandemic have been from a bird’s-eye view.
The U.S. Department of Labor has reported that 16.8 million Americans applied for unemployment between March 15 and April 4. New numbers due out Thursday morning will push those numbers even higher, but already that three-week total represents roughly one in 10 U.S. workers. More than 127,000 of those people live in Colorado.
Last week, an analysis released by online payroll and benefits platform company Gusto captured an early-stage snapshot of devastation playing out across some of the c1ountry’s small businesses.
Using data from the company’s payroll, benefits and human resources applications, Gusto determined that the more than 100,000 small businesses it works with across the country let go of 3.7% of their employees in March.
It may seem light, but jobs cuts at those companies — which range in size from just a handful of employees to headcounts of more than 100 — increased 94% in March over February, according to Gusto’s analysis. There was a more than 1,000% spike in job cuts specifically labeled as “layoffs” in the Gusto system.
Considering that government restrictions such as the statewide stay-at-home order Gov. Jared Polis’s issued on March 25 only started rolling in the latter part of the month, it’s also likely that 3.7% figure is significantly higher more than two weeks later.
Gusto has a large office in downtown Denver, though the roughly 900 people who work there have been doing so remotely since mid March. Denver-specific data collected by the company shows local small businesses increased their use of the “layoff” tag in the company’s software 1,100% in March over February. Overall, job cuts doubled and total employee counts fell by 3.8%. Statewide, Colorado companies outpaced the national average, shrinking by 4.4%, according to Gusto’s data.
Gusto’s analysis tracked a 25% increase in likely furloughs in March compared to March 2019, and a 50% spike in workers who have experienced a significant decrease in hours worked compared to a year prior. Those workers earned about a third less money in March than they did in February. It’s likely many of those workers have also applied for partial unemployment support though they still work limit hours or remain job-attached.
“We believe that the trends observed on the Gusto platform are indicative of broader trends across the country, and that payroll data can act as an early warning for broader economic trends that will later surface in government unemployment levels,” Daniel Sternberg, Gusto’s head of data science, wrote in the report.
Koan Goedman, owner and co-founder of Denver coffee shop and wholesale business Huckleberry Roasters, laid off 30 of his employees last month. He’s now down to a staff of six including himself. His company’s fortunes changed quickly once the spread of the new coronavirus reached emergency levels.
In early March, the company, which operates stores at 4301 Pecos St. (now offering curbside pickup) and in the Dairy Block development downtown (closed until further notice) was talking about expanding and offering benefits to more of its employees. Starting on March 16, the day Denver Mayor Michael Hancock announced he would be banning sit-down service in food and beverage establishments in the city through May 11, Huckleberry’s business fell off a cliff. By Wednesday, it was clear drastic measures were necessary.
“We looked at revenue for the first two days compared to what it would typically be and extrapolated that out a little bit and we essentially lost 80% of our revenue in three days,” Goedman said.
Goedman said his initial thought was to cut shifts, limit hours and keep as many employees on payroll as possible, but Huckleberry’s accountant told him that would not be enough to keep the business afloat.
“We’re not doing anybody any favors if we get to the other side and there is some normalization, whatever that looks like, and we aren’t able to operate effectively,” he said. “We could have kept paying everybody then we get to mid May, mid June or September or whatever it is, and we have no capital and then we’ve done a much longer-term disservice to everybody.”
Online orders have tripled in recent week, Whole Foods has agreed to carry Huckleberry’s coffee in more Colorado stores and the brand is being featured in an online subscription service box. That, along with some leeway from landlords and some possible federal loan support, might be enough to make it through the crisis, Goedman estimates. Then he hopes to bring people back.
In the meantime, he’s left contemplating some of the lessons the virus is teaching America about itself.
“It’s showed how most people were still living on the margins, both as individuals and with our businesses,” he said.