Bloomberg.com is reporting that more than 340 companies declared bankruptcy in 2020 and blamed Covid-19 in part for their demise. The bulk of the small firms doesn’t get much public notice. But the local effect goes deeper than mass media reports.
Thanks to the Opportunity Insights Economic Tracker at Harvard University, data that normally doesn’t show up on the local level is being reported.
Here are some Tri-Cities county examples from the Jan. 2020 to Dec. 9 Economic Tracker reporting period.
% CHANGE IN SMALL BUSINESS OPEN
Change in small businesses open is defined by those having current financial transaction activity. It’s helpful to remember that not all businesses have a storefront where a “closed sign” chronicles its permanent or temporty status. For example, Sullivan Co. had the lowest percent change in businesses still open. There were 3,337 Sullivan Co. businesses in the most current Census Business Pattern report and 10,025 nonemployer businesses. Washington Co. was had the highest percentage change of the still open. The current Business Pattern Report shows it had 2,880 business establishments and 8,697 nonemployer businesses.
The Tracker’s current report shows a substantial bite on the number of Sullivan Co small businesses. But it has fared better than its neighbors. Here are the percentage changes for Tri-Cities counties during the current reporting period.
Sullivan – down 25.8%.
Greene – down 27.6%.
Carter – down 31.4%.
Washington, Va. – down 32.8%.
Washington, Tenn. – down 45%.
SMALL BUSINESS REVENUE
During the same period, small business revenue has declined by 22.2% in Tennessee.
In the Tri-Cities:
Sullivan – down 15.6%.
Greene – down 20.9%.
Carter – down 27.3%.
Washington Co. Va. – down 48.4%.
Washington Co. Tenn. – down 52.7%.
CONSUMER SPENDING CHANGE
Statewide spending is down 1.2%.
County spending here in the Tri-Cities is:
Hawkins – up 17.5%.
Sullivan – up 6.7%.
Greene – up 0.8%.
Washington Co. Va. – up 3.3%
Washington Co. Tenn. – down 2.8%.
Carter – down 5.4%.
Unicoi – down 13.5%.
Some of the variances in consumer spending are attributed to state and federal transfer payments in areas with a higher number of low-wage workers because the transfer payments typically go to essential goods and services. According to the study, one of the major consumer spending impacts is that upper-income households reduced their consumer spending during the pandemic.
The K-shaped recovery is evident in statewide employment when pay levels are compared. Current county-level data isn’t available.
Statewide employment of workers at the bottom of the wage group ($27,000 and below) is down 15.1%.
Employment in the middle-wage group ($27,000 to $60,000) id down 2.2%.
Employment in the high wage group ($60,000 plus) is up 1%.
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