A ‘frightening time for businesses’: Local employees, organizations face uncertain future amid pandemic

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The future of business as usual in Berkeley is far from certain, even with emergency relief available to organizations and people most impacted by the coronavirus.

Although the exact rate of unemployment and job loss in Berkeley is unknown aside from current projections, the numbers are approximately proportional to national unemployment rates, according to Jacquelyn McCormick, chief of staff for Berkeley Mayor Jesse Arreguín’s office.

“It is a really incredibly tragic, frightening time for businesses and for our entire community,” McCormick said. “We don’t know when we’re going to be able to come back, we don’t know what that coming back is going to look like, we don’t know if COVID-19 is going to raise its ugly head again in the fall and we go through another round of this.”

A press release from California’s Employment Development Department, or EDD, states that 878,727 claims were processed during the week ending on March 28 — a 370% increase compared to the previous week when EDD processed about 187,000 claims and the 58,000 claims processed the week ending on March 14.

Campus sophomore Tessa Stapp works at Starbucks and with the UC Berkeley Graduate Assembly. Stapp said in an email that she was laid off from her third job at a local cafe because it is a non-essential position.

She added that losing one of her jobs increases her sense of insecurity when it comes to paying tuition.

“There are so many folx that knit us all together in unseen ways and it’s hard to stay so tightly knit when we are surrounded by this fear and are physically so distant,” Stapp said in the email.

The Berkeley Relief Fund for residential tenants, nonprofit arts organizations and small businesses started with $3 million from the city in hopes that more donations from the public will eventually match that amount, according to McCormick. About $700,000 in donations has already matched city funds.

The grant program opened applications for one week, during which 1,058 were submitted. According to the city’s economic development manager Jordan Klein, about 20% of all small businesses and nonprofits in Berkeley submitted an application, indicating that the “economic impact of this crisis on small businesses is extreme.”

“For many businesses, that obviously has severe impacts on revenues. Many businesses and organizations have been forced to lay off or temporarily furlough their staff,” Klein said in an email. “For some businesses, the temporary closure might lead to a permanent closure.”

Klein added that the city’s Office of Economic Development is working with local partners to help businesses and nonprofits during the COVID-19 pandemic.

The office’s efforts include helping businesses access government loans and grants, bolstering timely communication, developing marketing campaigns to help businesses stay open and formulating midterm and long-term plans for economic recovery.

Games of Berkeley closed its doors and laid off all of its employees the day of the March 16 shelter-in-place order. Owner Erik Bigglestone said in an email that he has even taken himself off payroll.

“I’ve applied for a variety of government and private loans and grants, but approvals, promised advances, and the like have yet to materialize,” Bigglestone said in the email. “I have a good landlord with whom I feel I can negotiate in good faith once we’re able to reopen, but our business model will be very different in the near-term.”

There is some good news regarding COVID-19’s impact on Bay Area workers, however, according to research conducted by UC Berkeley and other institutions.

Jesse Rothstein — campus public policy and economics professor and director of the Institute for Research on Labor and Employment and the California Policy Lab — said a key finding is that multiple medium and small-sized businesses are keeping employees despite shutting down.

“It’s important to remember we are a collective, not just a singular person experiencing this alone,” Stapp said in her email. “It’s also important to remember that a lot of us will get to return to a sense of normalcy once this moment has passed, and we cannot forget the way we feel now and we can not go back to ignoring our community’s needs.”

Olivia Buccieri is the lead business and economy reporter. Contact her at [email protected] and follow her on Twitter at @obuccieri_dc‏.