As the pandemic Covid-19 ravaged his activity in the tourism sector, Arrangements Abroad has had to mobilize to get a loan of 597 000 dollars in the framework of the program of safeguarding of employment put in place in emergency in the United States.
The funds from the Paycheck Protection Program (PPP) have allowed this company, based in New York, specialized in the organization of cultural trips, to pay the salaries of its staff for a few months.
But it was not able to avoid layoffs: last week, she had to get rid of six of its 30 employees, a sign that despite the financial efforts of unpublished State, the pandemic continues its ravages on the job.
Yet, “we have spent every penny,” sighed Jim Friedlander, president of the company.
On Thursday, the ministry of Labour will reveal the number of people who pointed to unemployment last week, which should have decreased compared to the previous week. But it will remain well above trend before the pandemic.
“The worst in terms of layoffs is behind us,” says Lydia Boussour, economist at Oxford Economics. “But it will still occur. “
It is estimated that 60% of the jobs lost will be recreated by the end of 2020, but workers still unemployed will put a lot more time to find employment opportunities.
The constant flow of dismissals reflects the mixed results of the PFP programme, some businesses such as Arrangements Abroad is continuing to reduce its workforce while others like Legacy Toys, in Minnesota, still have not managed to re-employ the majority of the staff.
The program, which provides loans to small and medium-sized enterprises affected by the coronavirus to cover the salaries of their employees and a portion of the rent, had been developed in the framework of the law CARES, a gigantic plan to assist businesses and households to about 2200 billion dollars. Loans are cancelled if the businesses keep or réembauchent their employees for a certain period of time.
The deployment of this device has been winded, the influx of requests has been such that the computer systems of the us administration have planted.
Loans of the first tranche of $ 350 billion of the program had also been granted to larger companies who could not, in principle, not entitled to claim it. The latter of which a team of famous NBA, have had to repay.
Fewer SMES sustainable ?
The request for the second tranche of the PPP decreased.
If the 350 billion of the initial $ have been quickly spent, $ 130 billion of the second tranche are still available, which could be a sign that fewer small businesses are granted loans, in the absence of a viable.
Yet, the PPP has probably contributed to the decline in unemployment and to job creation in may, say economists.
For the boss of Arrangements Abroad, the PPP has provided the company a chance to reposition themselves for the future.
“Our employees are financially and psychologically better” off, was also estimated Mr. Friedlander.
However, he underlines that now it is not a loan which his company has need but of a vaccine “for people to feel safe” to work and travel.
For the time being, he sees no recovery before mid-2021.
For its part, Legacy Toys has used his loan to PPP to create a trading company in-line operating from its seven stores in Minnesota and North Dakota.
Customers are not always allowed to enter shops, demand is “skyrocketing” for the collection of toys in front of the stores after being ordered online, ” said owner Brad Ruoho.
So far, Legacy, which has secured a loan from DPI of $ 160,000, was able to re-employ only 35 of his 75-member staff because the shopping centres are operating with reduced hours.
The company’s efforts have also been undermined by the events in Minneapolis after the murder of George Floyd.
For a week, a store has been inaccessible, and the company has lost about 40 parcels burned in a post office in Minneapolis has been looted.
But ” we are fighters. We will not give up “, swear Mr. Ruoho.