By Sharon McElhone
On April 17th, Governor Gavin Newsom announced that California is now in a corona induced recession. Small businesses are in dire need of Payment Protection Program (PPP) loans and over a million of California workers have filed for unemployment after the month long shut down. Some good news is that Bay Area leaders were quick to join with other community leaders, businesses, and non-profit organizations to raise millions of dollars in order to provide much needed financial relief for Bay Area residents and businesses. Companies such as Cisco, Western Digital, Google, Apple and Adobe have all donated to Silicon Valley Strong, which has collected a total of fourteen million dollars, with Santa Clara County donating two million to the fund. According to Supervisor Cindy Chavez’s website, though, the funding has already been distributed and there are still 7,000 households still on the waiting list and many businesses waiting for relief.
On a more cautionary note, Santa Clara County and the City of San Jose are relying heavily on donations from large corporations to help keep Bay Area families and businesses afloat during the shutdown and the pandemic is showing us how vulnerable Bay Area families and small businesses are. The reports of mass sums of money available for small businesses, food banks, homeless shelters, and families appear to tell a Robin Hood kind of story with good Samaritans banding together to give to those in need, and Americans have seen numerous examples of generosity during these difficult times. However, the story of Robin Hood is also one of robbery, greed, control of wealth, and a kind of lawlessness. Millions of small businesses and families do not have enough of a cushion to survive a one-three-months shut down and large corporations seem to be the ones with money to give away to charity.
During the recovery, the big question will be how will leaders help better prepare and protect small businesses and residents financially when another crisis occurs. Local, state, and federal government have yet to distinguish between the corporations that complement the growth of small businesses, which are vital to a healthy and vibrant economy, and ones that undermine them. The concentration of wealth to corporations that have a long history of undermining small business has gone mostly unchallenged by Bay Area leaders. This crisis shows just how essential small businesses and the middle class are to the economy and how without more wealth distribution, the middle class and small business are relying on government loans and donations from large corporations to survive the pandemic. Leaders helping in the recovery should take note.
Furthermore, Congress and lenders recently let the American people down by giving Small Administration’s Paycheck Protection Program (PPP) business loans to large chain stores and restaurants that were meant to provide relief to small businesses with less than 500 hundred employees, showing that a different kind of oversight is needed. It will take a change of course to improve the situation for small businesses and the middle class, one where California leaders start to stand with small business and families in a way that they have not done since large corporations became the driving industry in Silicon Valley.
The pandemic is threatening to grow the wealth gap even more in the Bay Area where a small local business like Yamagami’s is still waiting for a PPP loan. Yamagami’s was founded in 1948 long before companies like Facebook and Google came into being. Brittany Sheade, a 3rd generation owner of the nursery, says that her family applied on April 3rd for a PPP loan, the same day the county announced the shut down and the same day their child was born. Two days later, Chase Bank stated that the bank was out of funds. Additionally, Santa Clara County made grants of ten thousand dollars available for non-essential businesses, but limited the grants to businesses operating in the City of Santa Clara. Yamagami operates in Cupertino.
Yamagami’s founder, Brittany’s father, remembers when they opened some 70 years ago and 20 different nurseries thrived. Now she says “as the years have gone by, most have disappeared.” What Yamagami needs now in order to continue being in business is for the county to allow curbside pick-up. Before the virus, “Yamagami’s was on track to have a phenomenal year,” she added, but the shutdown, not being able to do curbside pick-up, and the inability to secure a PPP loan has put their business at great risk. They are reaching out to Santa Clara officials and asking the county to ease the restriction so they can compete in the market place. Other counties like Santa Cruz and Lafayette have allowed nurseries to do curbside pick-up safely, and many nurseries are doing up to 300 orders a day.
When asked what Yamagami’s would have done differently had they known a crisis was coming, Brittany said that having an online presence to take in orders would have helped and that they will be working on incorporating more technology in the future.
What everyone knows to date is there are thousands of tales that tell the story of a small business like Yamagami’s waiting on a loan and waiting to participate in their own recovery. They and their employees make up a large percentage of the middle class and placing value on them again after years of allowing large tech companies to overrun and overshadow their businesses, employees, and contributions will take a new kind of approach and a new kind of bravery.