Unemployment creeps lower in Fresno area. Data show why and reveals rocky path ahead
Almost 18,000 businesses across the central San Joaquin Valley received loans from the federal government through June 30 to keep employees on their payrolls during the pandemic .
Those loans from the U.S. Small Business Administration’s Paycheck Protection Program – part of the massive CARES Act approved by Congress and President Donald Trump in March to ease the burden of the coronavirus pandemic – were expected to help businesses keep almost 274,000 Valley workers for two months.
But the earliest of those loans were approved in April. Now, as the COVID-19 pandemic stretches into its fifth month, unemployment in the Valley remains far higher than in February, before the virus triggered sweeping business closures and stay-at-home orders across California.
About 134,500 people were out of work in June across Fresno, Kings, Madera, Merced and Tulare counties, according to estimates released Friday by the state Employment Development Department. That’s down from the 141,100 who were unemployed in May.
The drop in unemployment – to a rate of 14.6% last month in Fresno County, compared to 16.9% in April and 15.5% in May – coincides with an easing of the economic and social limitations over the past two months.
And while the number of unemployed remains far above pre-pandemic levels in Feburary, when fewer than 85,000 Valley residents were estimated to be out of work, what won’t be known for at least another month is what will be the employment effects of a renewed clampdown by the state on indoor business operations as the coronavirus continues to spread and hospitalizations increase locally and statewide.
Also unclear is what happens after the thousands of businesses that received PPP loans burn through that money.
The loan program was designed to allow businesses to have the loans forgiven by the government if they lived up to the requirements of the program.
Data from the SBA show that more than 370 Valley companies received loans of between $1 million and $10 million under the Paycheck Protection Program – enough money, according to their loan applications, to salvage the jobs of almost 59,000 employees either through avoiding layoffs or quickly rehiring workers who had been let go.
From Ahwahnee to Woodlake
About 2,800 other businesses took in loans of between $150,000 and $1 million in order to retain more than 117,000 workers on payroll in the pandemic.
By far the largest volume of loans – more than 13,000 of them in the Valley – were less than $150,000, but collectively added up to more than $572.6 million. From Ahwahnee to Woodlake, from architectural firms to wholesalers, and everywhere and everything in between, those loans were expected to preserve the jobs of more than 95,000 employees.
Restaurants
About 900 of the smaller loans, collectively amounting to almost $36 million, went to restaurateurs in the region, from full-service dine-in restaurants to fast-food franchisees and mom-and-pop operations.
Restaurants are part of the broader leisure/hospitality industry sector that has endured some of the most significant impact of the pandemic and the measures meant to slow the spread of COVID-19. Between February and April, the sector – which includes hotels, restaurants, movie theaters, bars, family entertainment centers and other recreational businesses – collectively lost an estimated 15,100 jobs, figures from the Employment Development Department show.
Since April, the sector has regained about 6,800 jobs, but that’s less than half what was lost. Many of those are businesses deemed “non-essential” that were closed for weeks before the state slowly began easing restrictions. Some of those limitations are being reimposed, however, as case counts and hospitalizations for COVID-19 increase statewide and in the Valley.
Retail
Similarly, the retail industry saw about 6,200 positions evaporate between February and April because of the pandemic. That sector has regained about 1,400 of those jobs.
More PPP
Through June 30, two rounds of Paycheck Protection Program funds produced more than 4.9 million loans to businesses nationwide, amounting to a whopping $517.4 billion.
More than 584,000 California firms received a total of $67.4 bilion in PPP loans.
The original guidelines for the program were for loans to be made to small businesses with 500 or fewer employees; some larger businesses could qualify under certain circumstances if they met SBA requirements. The program provided money to cover eight weeks of payroll, and the money could also be used for such operating needs as mortgage interest or rent and utilities.
Some small businesses in Fresno reported they had trouble finding SBA-approved banks or lenders who would work with them on securing the federally backed loans. That meant that many missed out on the initial program because it ran out of money within a couple of weeks after the application period opened in early April.
A second round of money kept the program going and enabled many more businesses to participate.
As of July 1, about $132.2 billion in PPP money remained available, according to the SBA.
This story was originally published July 17, 2020 at 12:36 PM.
