Covid-19

Why Small Businesses Matter In Shutdown Order

County Judge Ricardo Samaniego extended the non-essential business shutdown order through December 1 yesterday. Although El Paso police are now enforcing the shutdown order within the city limits there remains the unequal treatment of businesses being forced to close. This is why it matters.

The dialog is generally that health and safety trumps business viability. That is a valid argument. What is missing is the unequal treatment of all businesses in El Paso.

As the Order stands now, small mom-and-pop stores are the targeted businesses that are forced to close. These include service businesses like bars, hair and nail salons and other businesses that are not considered “essential” under the many loopholes that exist today.

One such loophole are the bars that are using taco trucks in their parking lots to avoid the order for bars to close. The taco trucks turned them into instant restaurants. [2]

Here is why unequal treatment matters.

One of the major exemptions to the closure order is Walmart.

KTSM News reported on November 5, that “contact tracing data has been continuing to show big box stores as the leading source of where the virus has been infecting community members.” [1]

Margo, through KTSM stated, the City cannot order “the main retailers, the Walmart, Target, Home Depots, [and] Lowes” to close.

Recent news reports have reported Walmarts temporarily closing for “deep cleaning.”

Although the County’s Order No. 13, ostensibly is trying to control the Covid-19 emergency by ordering businesses to close, the data shows that the businesses responsible for the rising spread of the pandemic infections – Walmart – are not being forced to close.

According to Dee Margo, in an interview in the Business Insider today, “a quarter of El Paso’s small businesses have shut down since March.” “They’re gone,” Margo told the Business Insider. [2]

One quarter of El Paso small businesses are gone forever.

Those lost businesses translate into higher unemployment numbers, lost taxes as residents buy less and lose their homes and lost wages that trickle down through the economy of El Paso further deteriorating the city’s economy.

Retail businesses in El Paso have already lost about 15% of their revenues due to the border shutdowns. Mexican shoppers account for 15% of the retails sales in El Paso. With the closure of a quarter of El Paso’s small businesses the loss of those wages will further decimate El Paso’s retail businesses.

Economically El Paso is doing worse than other border communities.

Laredo has seen a drop of about 20% of cross-border trade traffic this year. El Paso has seen over 50% drop in cross border trade. That drop also translates into less disposable income in El Paso.

Although Samaniego’s Order is framed as an attempt to protect El Pasoans from the pandemic virus, the reality is that the true sources of the rising spread of the virus are not being forced to close, i.e. the Walmarts of the city.

The brunt of the resulting economic chaos is being forced upon the vulnerable small businesses of El Paso which are predominantly minorities. In the case of El Paso, because of El Paso’s low-income levels, the smaller businesses not only represent wages for lower-income earners but the businesses are themselves income generators for the families of the business owners themselves.

Footnotes:

  1. Tatiana Favela, “Big box stores top source of COVID-19 spread in El Paso, officials say,” KTSM, November 5, 2020.
  2. Charles Davis, “’We need more help’: El Paso’s Republican mayor says the city needs federal funding to protect public health,” Business Insider, November 12, 2020.

2 replies »

  1. It’s a trickle-down effect. Closing any business affects all the others. I don’t know if shutdowns work in the long run, given the potential for economic ruin, but why give the big box stores, mostly national chains, a pass and shut down small businesses that have little to do with the overall problem? I understand we need the big stores to supply our needs at this time, or we are dead in the water. But I also suspect the prime driver for (mostly Republican) opposition to a shutdown is they want to please their billionaire donors and SuperPacs. In any case, the prime drivers of the pandemic in the US are the poor schmucks exposed to infected people all day every day: medical personnel, pharmacists, store clerks, waiters and waitresses, cashiers, deliverymen, military and other federal workers, etc. Then they spread it to their families. So what we need is better protection for these people since we know the average person will typically wear a mask, use hand sanitizer, and socially distance at least to some extent.

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  2. To contend Republicans receive more money in donations is totally false. Read the CNBC article Democrats are Crushing Republicans in Fundraising as Campaign Hits the Final Stretch published 11/15/2020. Democrats have become the party of big donations. President Trump has supported the middle class with policies such as lowering tax rates for the middle class which Biden will increase.

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