Area businesses say they can't survive without new government relief package
Posted October 8, 2020 8:59 p.m. EDT
Raleigh, N.C. — Negotiations on a new stimulus package to boost the economy during the coronavirus pandemic have stalled in Congress, and President Donald Trump has wavered between breaking off talks altogether until after next month's election or working on aid for specific industries.
Duke University economists say a second stimulus – larger than the CARES Act passed in the spring – is needed, and some Triangle business owners say they won't be able to keep their doors open without it.
“One of the things I’m really concerned about is going into the winter. A lot of the small businesses that are still hanging on, places like restaurants that can serve outside, they’ll have to move inside. That may be a death blow," said Connel Fullenkamp, a professor of economics at Duke.
That could happen to Whiskey Kitchen restaurant in downtown Raleigh. The $400,000 it received through the CARES Act helped keep 60 workers on the payroll, but with limited capacity both indoors and out generating less revenue, the money ran out last month, owner Michael Thor said.
"I feel as though we are in a better position than most. We have a decent amount of savings," Thor said, noting at least six downtown eateries have closed during the pandemic.
He said he fears more will follow, possibly his own, without government assistance.
"We need help. A second stimulus package is 100% necessary," he said. “The small-business community in general needs more help if we are going to be able to continue.”
Yet, Thor isn't optimistic the help will come in time.
“When I see places closing around, it hurts. It’s like losing a member of the team," he said. "We are all trying to make Raleigh a destination.”
Fullenkamp said no new stimulus could pose long-term problems for the economy.
"People are now dropping out of the workforce again, and we’re seeing the return of long-term unemployment," he said. "We saw not just big cities but small and medium-sized cities revitalize their downtowns as small businesses moved in and taking off. I think it’s going to take quite a lot of time to recover.”
"We will see a major uptick in homelessness," agreed Mariel Beasley, co-director of Duke's Common Cents Lab.
“This is probably the time the government does need to help and do the stimulus packages for both business and individuals to help us get through the next year," said John Graham, a professor of finance at Duke.
“I would like to see a part of it that is for basic necessities that folks have but also having a part of it be sort of a gift card that is branded for spending at local businesses," Beasley said. "I do think it’s so important to get that cash infusion into some of our local businesses. I’d also like to see more grants and less loans."
Sheterica Palacio said she used her first stimulus check on food and rent. She said she hopes to sock another one away, if there is one.
“I would use it to save just in case for the future. I don’t know what’s going to happen next,” Palacio said.
Trump has said he would be willing to have Congress work in the coming weeks on more stimulus checks for families and help for the ailing airline industry, but House Democrats said a broader package is needed.
Fullenkamp said a series of smaller relief packages would be politically infeasible in a divided Congress weeks before a contentious election.
"The political realities are prohibitive here," he said. "They have to put together big, single pieces of legislation that have enough votes on both sides of the aisle to get through Congress."