Arizona economist: 35% of small businesses may not survive pandemic
Jul 30, 2020, 4:15 AM | Updated: 9:46 am
(Getty Images/Spencer Platt)
(Getty Images/Spencer Platt)
PHOENIX — As many as 35% of small businesses could be forced to close operations due to financial hardships imposed by the coronavirus pandemic, according to an Arizona economist.
“My guess is that 25-35% of all small businesses … will not be back,” Elliott D. Pollack, CEO of Elliott D. Pollack and Associates, told KTAR News 92.3 FM’s Gaydos and Chad Tuesday.
“Even for medium and large-sized businesses — a lot of them are going to face bankruptcy … They’re going to face restructuring their debt.”
According to Pollack, this will lead to a complicated economic recovery because there may not be enough small and medium-sized businesses to supply goods and services commensurate with consumer demand.
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“Those people who worked probably saved a lot of money because they had no place to spend it,” Pollack said.
“Those people who didn’t work and didn’t fall through the cracks could have ended up with more money than they had from working.”
Pollack added that the misalignment of supply and demand could be made worse by inconsistent government policies and, potentially, a second round of economic shutdowns.
Economic circumstances could be made even worse if the government hinders financial support from reaching those in need, he said.
“The object of the government … everything they’ve done with the CARES Act, with the HEROES Act is to keep money flowing to people who are unemployed because of COVID,” Pollack added.
“That will keep the economy alive through this thing. In the absence of that, the economy is going to be a mess.”
