Study: 30% of York County businesses could fail in coronavirus fallout

Lindsey O'Laughlin
York Dispatch

By the time York County moves to the yellow and green phases of Gov. Tom Wolf's phased reopening plan, up to 30% of local businesses may have to shut their doors permanently.

That statistic is part of a consultant's report on York County's economic future, said Kevin Schreiber, president and CEO of the York County Economic Alliance.

"This is a crisis," he said. "There’s no way to sugarcoat it."

Schreiber spoke Thursday to Auditor General Eugene DePasquale about York County's economic recovery on Facebook Live.

DePasquale said the estimated business failure rate was "horrifying."

Before the coronavirus pandemic hit Pennsylvania, the YCEA and several other local agencies — the Downtown York Business Improvement District, the City of York and the York County Planning Commission — had commissioned Fourth Economy Consulting, based in Pittsburgh, to prepare a report on the health of the local economy and how to plan for the future.

Signs directing customers of two businesses in Colonial Square Shopping Center Friday, May 8, 2020. Bill Kalina photo

But when the majority of the state's businesses were compelled in March to shut their doors as part of the governor's social distancing guidelines to slow the spread of COVID-19, the report shifted gears to analyze how the shutdown would affect the local economy.

The average business has access to about $12,000 cash and can stay afloat on those reserves for about 27 days, Schreiber said.

There's been growing agitation among some out-of-work Pennsylvanians, business owners and Republican lawmakers who want the governor to allow the economy to reopen.

Thousands of protesters gathered at the state Capitol complex in Harrisburg last month demanding an end to the governor's closure of nonessential businesses, and another 200 or so held a rally outside Wolf's home in Mount Wolf earlier this month.

Hardest hit: Some of the most vulnerable people in this crisis are designated as "ALICE," or Asset Limited, Income Constrained and Employed, Schreiber said.

These are individuals and families who have jobs but are hovering just above the poverty line, without cash reserves or high wages.

The CARES Act, which authorized an additional $600 per week in unemployment benefits for qualifying individuals through July 31, bought those folks some time, Schreiber said, but not much.

"Once you hit that Aug. 1 date, that’s when that benefit drops off, unless Congress should re-extend it," Schreiber said, "and that portion of the population (ALICE) drops significantly below the poverty threshold."

DePasquale and Schreiber said one of the most important ways to boost economic opportunity after this crisis will be to expand high-speed internet access to areas of the state that are still making do without it, particularly with regard to e-commerce.

"If you’re trying to start a small business, and you even have capital, but you can’t access high-speed internet, good luck competing with businesses that do," DePasquale said.

The unemployment rate in the U.S. spiked to 14.7% in April, according to the latest federal jobs report released Friday, the highest since the Great Depression. More than 20 million jobs nationwide vanished in April, the worst monthly loss on record. 

State Auditor General Eugene DePasquale talks with the media during his visit at York Hospital Wednesday, June 12, 2019. Bill Kalina photo

In addition to serving in his role as auditor general, DePasquale, a Democrat, is running for Congress in the 10th District, which comprises parts of York, Dauphin and Cumberland counties.

If he defeats his primary opponent, Tom Brier, in the June 2 Democratic primary, DePasquale will face off against incumbent Rep. Scott Perry, R-Carroll Township, in November's general election.

Latest on the virus: As of Sunday, 773 people in York County have tested positive for COVID-19, and there have been 13 virus-related deaths.

Statewide, 56,611 people have tested positive, and there have been 3,707 virus-related deaths.

An "open" sign rests on the floor at Indigo Bleu in York City Friday, May 8, 2020. According to a consultant's report on York County's economic future, up to 30% of local businesses may have to shut their doors permanently. Indigo Bleu offers online shopping. Bill Kalina photo

On Friday, the stay-at-home order was lifted in 24 counties in north-central and northwestern Pennsylvania, where retail businesses will be allowed to open their brick and mortar stores.

And Wolf announced 13 counties in the southwestern region that will move from the red to the yellow phase on Friday. Neither York County nor any other counties in the south-central region were included in the latest round of reopenings.

Those 13 counties are Allegheny, Armstrong, Bedford, Blair, Butler, Cambria, Fayette, Fulton, Greene, Indiana, Somerset, Washington and Westmoreland counties.

For the rest of the state, the governor has extended the stay-at-home order until June 4.

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