A study conducted at the beginning of April found that more than one third of Wisconsin’s businesses could end up closing their doors if the shutdown continues for three months. The study was conducted by Wisconsin’s Economic Region Partnerships as well as the Wisconsin Economic Development Corp and the University of Wisconsin-Oshkosh.
The study found that the businesses they interviewed lost over $650 million between inventory, income, lost wages, and other financial impacts. 8,795 jobs were lost in late March alone, after Governor Evers issued his stay-at-home order. Paul Jaden, the president of the Madison Region Economic Partnership, says that this would be disastrous. However, he believes it may not come to pass.
“I’m hopeful that we’re not going to see 35% of our businesses going out of business,” said Jaden.
“I’m hopeful indeed that we’ll see many of those who felt they were at risk get the kind of assistance that was necessary to keep them afloat, and I’m also hoping that this survey is going to conform to that assistance so we target those businesses who will indeed have the capacity to survive with just a little boost.”
Jaden says they will be repeating the survey to keep track of the situation as it unfolds.
One of the major problems businesses face is that they’ve lost customers. In addition to the stay-at-home order discouraging unnecessary travel, a lot of customers may not have the extra money to spend at those businesses. Just last week, Wisconsin residents filed over 69,000 new unemployment claims according to data from the Wisconsin Department of Workforce Development. According to Dennis Winters, the chief economist for the Wisconsin Department of Workforce Development, over 4.5 million new unemployment claims were filed nationwide over the last week. Winters says that the claims are concentrated in more densely-populated areas.
“There’s high concentrations of unemployment claims that are correlated with COVID-19 infections in highly or densely-populated areas,” said Winters. “In the southeast, certainly Milwaukee and that area. And then up in the northwest, St. Croix County which has, or had, a lot of commuting workers into Minnesota and the twin cities.”
Residents of Saint Croix County, Wisconsin, filed eleven times as many new unemployment claims in March as they did in February. Residents of Douglas County, which is across the border from Duluth, have filed nine times as many claims.
Governor Tony Evers extended his stay-at-home order to the end of May, a move which Republican lawmakers are now challenging in court. They say that it’s too harmful to the economy for the order to go on too long. Winters says that the situation is a careful balancing act.
“You’re going to see more businesses fail,” said Winters. “And so that of course is the calculus that everybody has at the state and federal level, which is: How do we weigh the risk to our population against the risk to our economy. Obviously a calculus that comes up on a regular basis. If you had a 20 mile-an-hour speed limit versus a 65 mile-an-hour you know you can save lives, but you choose to go with some degree of convenience. And so that’s what we’re up against. All of our elected leaders are obviously going to have to be in a position to make those decisions.”
Jaden says the study will be repeated in early May.
Madison Mayor Satya Rhodes-Conway says that the city is temporarily getting rid of business fees for certain establishments in order to help small businesses. The city is also deferring certain payments until the end of the year.