They are our friends, our neighbors — eminently ordinary people who are most immediately in the line of fire as our economy, our schools, and our consumer spending grind to a halt across the Philadelphia region: self-employed restaurant operators, salon owners, the bigger small businesses that supply them, and, of course, wage earners.
Already, they are starting to feel the pinch as customers cancel appointments, skip dinners out, or are ordered, as is happening locally, to stay home to contain the spread of a virus that has sent the global markets into their worst free fall since 1987.
We must help these people and with real aid from Washington. It must happen now — before calamity befalls these good people who are the bedrock of our economy but have little safety net when things go south.
“My head’s popping off," Le Bus bakery operations chief Patrick McMahon said Friday from his King of Prussia office. "You don’t exactly contingency-plan for a pandemic. We’re a sick employee away from closing completely.”
We must demand that President Trump and Congress make these people first to receive direct financial relief. As Washington debates whom to rescue first, Big Corporations or The Little Guy, the answer is clear: Send cash, mortgage relief, and bolstered unemployment insurance to help The Little Guy.
Gov. Tom Wolf ordered the closure of all schools in Pennsylvania late last week and other businesses across the four suburban counties of Philadelphia. Imagine where this leaves merchants and their families and the employees they pay: Without revenue, but still on the hook to pay rent on their buildings, their business insurance, their home mortgages, their health-plan premiums.
The same goes for Philadelphia, where conventions, professional sporting events, concerts, and vendor deliveries into many skyscrapers have been scrapped.
Unlike public school teachers or corporate workers, these folks get no paychecks. As customers dry up, so does the money. Immediately. Any notion that payroll tax elimination or a Big Oil rescue package will help these people avoid disaster is folly.
“What I worry about is we don’t have sufficient information upon which to base projections,” McMahon told me as we talked this week at the company’s bakery in Montgomery County. Le Bus supplies fresh bread and pastries to hundreds of restaurants, delis, and caterers across the region and into Atlantic City. Its frozen products are distributed nationally.
On Monday, as markets hemorrhaged, I sat across from McMahon’s desk and asked how nervous he was. On that day, orders were holding firm, though he was flying blind, and it was harrowing.
There was no way to guess how the nation’s still-chaotic effort to contain the further spread of the coronavirus would affect consumers or — in another concern of his — the factories that produce the plastic and corrugated packaging that Le Bus uses.
If things start to go bad, in other words, a place like Le Bus would feel it from both ends — the supply and demand side.
“There needs to be a coordinated message from state and federal governments telling us what to expect, what the next step will be," McMahon said calmly despite escalating stress. "Once you see schools closing, what does that do to restaurants?”
Days later, after Wolf on Thursday ordered that all schools in Montgomery County shut down for two weeks to contain further spread of the disease in COVID-19′s "epicenter” in Pennsylvania, McMahon was feeling more of a pinch.
“We’ve had some restaurants cancel orders,” he said Thursday evening. “On the frozen side we have quite a number of orders for next week. However, all the major food distributors have canceled their shows, which typically drive a lot of revenue into our business. Right now we simply — we’re in a holding pattern because there’s simply not enough information to really make good decisions.”
Some of what’s at stake if the calls for self-quarantines lead to big drops of business at restaurants in our region:
At Le Bus, this could jeopardize the 200 or so jobs that belong to in-house wage earners who knead and roll dough and bake pastries and croissants at all hours inside the company’s 42,000-square-foot bakery along SEPTA’s blue-collar workhorse, the Norristown High-Speed Line.
President Trump has seemed fixated this week on enacting a payroll tax cut. But that would be absurd if business drops so much that you can’t even stay open. It does no one any good in that scenario. Same for the low-interest loans the president floated during his calamitous address to the nation Wednesday night.
“No one likes to add debt,” McMahon said — especially if business is gone. Getting stopgap cash from insurance policies, he added, will also be tricky: “If there’s a government-mandated quarantine, most business interruption policies don’t cover that sort of event. Our avenues for remedy are pretty slim.”
A great help, he said, would be bolstering unemployment insurance so that, in the event of layoffs, workers everywhere could retain income to survive at home. This is in a proposal being pushed by congressional Democrats — and for very good reason, if you’re a policymaker who cares about more than just the Big Fish in business.
“Small businesses,” Democratic presidential hopeful Joe Biden said in his own coronavirus address Thursday, “will be devastated.”