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 the 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 businesses in that industry make up the largest group that turned to the PPP for help, according to new, nationwide loan data released by the Small Business Administration this week. The report shows that 445 full-service Vermont restaurants received loans and reported 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.
The 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 later this month. The initial PPP loans were intended to help businesses cover their payrolls for about two months.
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.
Jack Hoffman is a policy analyst for Public Assets Institute nonprofit based in Montpelier.