EDITORIAL

The fate of RI's small businesses

Posted 4/28/21

What a difference a year makes. One year ago, Rhode Island was locked down in state-mandated quarantine and non-essential businesses that couldn't operate remotely were closed indefinitely, with no idea when they might be able to re-open - if they could

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EDITORIAL

The fate of RI's small businesses

Posted

What a difference a year makes.

One year ago, Rhode Island was locked down in state-mandated quarantine and non-essential businesses that couldn’t operate remotely were closed indefinitely, with no idea when they might be able to re-open – if they could reopen at all.

A year ago, not much was definitively known about COVID-19, how it spread or how it could be treated. Testing was nowhere near as available as experts advised would be necessary to control its spread. A vaccine was purely hypothetical, and the populace was essentially living day-to-day in between various states of uncertainty and fear.

And yet, one year later, here we are. Restrictions are being relaxed, rapid-result testing is available basically around the clock throughout the state and, amazingly, a significant portion of Rhode Islanders have been vaccinated – with all but the youngest members of our state eligible to receive one if they wish (and they should, by the way). Somehow, the promise of a 2021 summer season resembling a state of pre-pandemic normalcy doesn’t seem out of the question anymore.

However, the situation for small businesses in Rhode Island has not yet progressed to such a point of optimism.

Federal stimulus dollars granted through the Paycheck Protection Program and subsequent direct financial infusions to citizens’ bank accounts has breathed life into a flat lining economy and certainly saved hundreds of Rhode Island small businesses in the process – but it does not erase the fact that for hundreds of other small businesses, the pandemic struck a deadly blow that has contributed towards an uncertain destiny for the Ocean State’s economic identity moving forward.

As outlined by General Treasurer Seth Magaziner, a possible 2022 gubernatorial candidate, during his recent appearance at the Warwick Rotary Club, Rhode Island is uniquely dependent on its small businesses – with nearly 99 percent of businesses in the state employing 500 or fewer employees prior to the pandemic.

So much of Rhode Island’s economy depends on those little mom and pop shops that dot our main streets and oceanside tourist destinations – the coffee shops and bakeries, repair shops, independently-owned boutiques, restaurants and beauty shops. It is part of the cultural fabric here to shop small and think about your neighbors when going out to make a purchase or find a service.

But since March, Magaziner cited, revenues for small businesses have dropped 50 percent and the number of small businesses making sales declined by 40 percent – basically meaning that for every 10 small businesses in the state, four didn’t survive the pandemic’s wrath.

We agree with Magaziner that Rhode Island can, and will, recover from this dark moment in history. Somehow, we always find a way to persevere despite the obstacles. However, whether we will remain a state that cherishes and props up its small businesses is yet to be determined.

As easy as it is to target governmental institutions with the success or failure of that endeavor – and we concur with the push back against Gov. McKee’s proposal to tax PPP loans above $150,000 – the ultimate success or failure of small business in Rhode Island will be up to the residents of Rhode Island.

The other noteworthy statistic Magaziner revealed during his Rotary Club appearance was that while small business revenue was down 50 percent, Amazon’s revenue increased by 38 percent. Of course, this increase in online shopping should be expected during a time when a majority of people could not safely venture out to shop small and locally. However, if that becomes the new normal, Rhode Island’s identity as a small business state will truly be in jeopardy.

Rhode Islanders have long been advocates for their communities and small business success stories. While the state and federal government should be providing aid to assist small business owners through this unprecedented hardship, it will be the responsibility of regular Rhode Islanders to shirk the convenient allure of the Amazons of the world if they truly hope to bring the economy, as we once knew it, back to life.

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