On July 22, 2020

Federal aid helped, more will be needed

The federal Paycheck Protection Program (PPP) pumped $1.19 billion into the Vermont economy in April, May, and June to help employers hang onto nearly 114,000 jobs during the first wave of the Covid-19 pandemic. To put that in perspective, in normal times Vermont has about 315,000 non-farm payroll jobs, and the state’s total output of goods and services in a three-month period is about $8.7 billion.

The money provided through PPP came in the form of loans administered by local banks, credit unions, or other lenders. Some or all of a loan can be forgiven if the business meets certain criteria for retaining employees and maintaining salaries. We don’t know yet how much of this money will eventually become a grant to Vermont businesses and their employees.

Full-service restaurants and their employees were perhaps hit hardest by the business closures ordered in the early days of the pandemic. Vermont restaurants make up the largest group that turned to the PPP for help, according to new, nationwide loan data released by the Small Business Administration last week. The report shows that 445 full-service Vermont restaurants received loans and reported that they retained more than 7,400 jobs. Some of the loan amounts were reported in ranges, so it’s impossible to get an exact total, but the loans to full-service restaurants totaled between $36.5 million and $59.5 million.

Hotels and motels reported the second highest job retention—just over 2,800 jobs saved by 151 businesses. And the larger accommodations and food services industry group, which includes different kinds of eateries and lodging businesses, reported saving more than 15,000 jobs through the PPP loans.

After full-service restaurants, some of the industries that received the most loans—though not necessarily the most money—included law offices (266), dairy cattle and milk producers (248), general auto repair businesses (218), and real estate agents and brokers (215). Together, these businesses saved nearly 4,400 jobs, according to the federal data.

The problem going forward is what happens to Vermont workers and their families when the federal support runs out.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided two basic tracks for getting money to people who couldn’t work because businesses were closed to curb the spread of the virus. PPP was designed to get money to employers so they could continue to pay their employees—and cover other operating costs—during the lockdown. In addition, Congress expanded federal unemployment benefits, including an extra $600 a week for people who qualified for state unemployment benefits. The additional $600 payments will end in just over a week, at the end of July.

The initial PPP loans were intended to help businesses cover their payrolls for about two months—most of which were given out about two months ago…

Vermont still has more than 40,000 people unemployed. New data released this week show that for the first quarter of this year—essentially the first month of the coronavirus—the state’s economy shrank at an annualized rate of 6.1%. Many Vermonters are still at risk of not having enough to live on without additional federal help.

More needs to be done.

Jack Hoffman is a policy analyst for Public Assets Institute (publicassets.org), a non-partisan, non-profit organization based in Montpelier.

Do you want to submit feedback to the editor?

Send Us An Email!

Related Posts

Medical debt relief is a direct investment in Vermonters

February 5, 2025
By Vermont Treasurer Mike Pieciak As Vermont’s Treasurer, I am committed to making investments that lower costs, strengthen our economy, and support healthier communities. I believe every Vermonter deserves a fair shot at success, regardless of the situation they are born into. Yet, for too many Vermonters, the cost of health care stands in the…

Tariffs

February 5, 2025
President Trump’s warning of tariffs on neighboring countries, Mexico and Canada, and critical trading partner China got off to a false start on Monday, Feb. 3, with the current administration putting the plan on hold after conversations with Mexico and Canada. A trade war is already brewing with China, who countered with tariffs on U.S.…

Fishers in crisis, action needed

February 5, 2025
Dear Editor, I am a conservation biologist with a specific interest in wildlife. Last April, I wrote and submitted a paper to the Vermont Fish and Wildlife board (FWB) summarizing the results from numerous studies across the U.S. and Canada indicating that anticoagulant rodenticide (AR) threatens fisher populations. Vermont had the highest exposure rate among…

MVSU district explains budget, cuts

February 5, 2025
Dear Editor, Editor’s note: the following letter was addressed specifically to members of the Mountain Views School District. As the vote on the MVSD budget approaches, we wish to further clarify the decisions that were made in the creation of this budget. Through months of meetings with the administration and board members, and consideration of…