Economy

52 million people worry about losing their jobs as loans are slow to get to businesses

Key Points
  • As many as 52 million workers are worried about job security, according to a Cowen Washington Research Group survey.
  • Programs worth at least $350 million were supposed to incentivize companies not to furlough.
  • However, those dollars have been slow to get to smaller businesses and instead have been going to larger publicly traded firms.
People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease (COVID-19), at an Arkansas Workforce Center in Fayetteville, Arkansas, April 6, 2020.
Nick Oxford | Reuters

More than 22 million Americans have filed for unemployment benefits since the coronavirus economic crisis began. Many more are worried that they'll soon be in the same boat.

As many as 52 million workers are worried about job security, according to a Cowen Washington Research Group estimate from a survey the firm conducted from April 13 to 17. The results come amid a stampede to the unemployment line brought about through government-ordered shutdowns of most nonessential businesses.

The survey found that about 11% of respondents reported being laid off over the past 30 days, a number that projects to more than 16 million people, which seems to understate the flock of new filers the Labor Department has reported over the past four weeks. 

Each of the previous three weeks saw more than 5 million new claims, and economists expect the number to top 3 million again for the most recent reporting period. 

The trend comes amid a dire backdrop in which government programs worth at least $350 billion were supposed to incentivize companies not to furlough. However, those dollars have been slow to get to smaller businesses that tend to need the money more, with a huge share of the cash going to large publicly traded companies that seem to have less of a need.

The situation is flustering small business owners across the country.

'When can I get ahead?'

Sarah Piepenburg runs a small specialty grocery store called Vinaigrette in Minneapolis and said she is "in survival mode."

Piepenburg, who has run the business for the past 10 years with her husband Richard, was denied a Payroll Protection Program loan in the first round of funding. All she wanted was $25,000 to the keep the store running while the economy falters and social distancing remains public policy. Without help and as business declines, she said her business, and her five employees, face an uncertain future.

"I just need a little help because my mortgage is due, my commercial rent payment is due," she said, tearfully. "At this point, all of them want to work. But if this goes on any longer, we're going to have some hard conversations."

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The business could take out a loan on less-generous times, like one that carries a 3.75% interest rate, "but tell me how that makes business sense."

"If my sales have dropped by another 50%, when can I get ahead?" she said. "If I have to lay off my employees, which I am desperate not to do, they can get unemployment. But as a business owner, I have no access to feed my family. If there are no sales coming, there is no money to feed my family."

Workers worried about the future are increasingly driven to gig-economy freelance work. 

Many freelance platforms have been reporting sharply increased traffic. One called Hunterz.io provides cash benefits for freelancers who connect start-ups to enterprises through previously established business connections.

The firm's CEO, Noam Weisman, said activity on the site has increased by multiples during the current layoff cycle.

"Everyone has to continue to sell and everyone needs to make those connections," Weisman said. 'In this climate, it's even more important to be able to do without hopping on an airplane or going to a conference."

Dan Haskell of Livingston, New Jersey, is a "hunter" who has used the platform to help furloughed friends get work.

"In recently weeks, as things were getting tougher and tougher, some of my friends who are in sales lost their jobs," Haskell said. "As tough as it is for some people, it's also a time for opportunity. People are still looking to do business."