Central Austin Edition | April 2020

With local economy staggering, workers and businesses say they needmore assistance Local unemployment jumped a full percentage point in March, and projections show the rate could jump as high as 25% BY JACK FLAGLER February to March, representing 43,971 local residents seeking benets.




Tens of thousands of Austinites are looking for help after being furloughed, laid o or having their hours cut in the midst of the economic crisis caused by the coronavirus.

Kristy Avila works as a manager at Paco’s Tacos in East Austin. When restaurants were forced to close dine-in areas March 17, Paco’s—like many restaurants— decided to stay open for take-out and delivery. But with no customers coming in the door, Avila said her hours were cut to about ve or 10 per week. That means Avila is eligible to receive benets from the state’s Shared Work program, in which the Texas Workforce Commission supplements employees’ lost wages to help businesses weather a slowdown and help Texas residents keep their heads above water nancially. Avila has tried to get through to the TWC for weeks. But the system has been overwhelmed by millions of phone calls from Texans per day. Avila has not been able to break through as of April 19 and said she is starting to run out of hope. “I’m out of funds. I’m not going to have my rent. I’m barely making it on food,” Avila said April 3. Prior to the coronavirus pandemic and the devas- tation it wrecked on businesses nationwide, Cisco Gamez, TWC media and public relations specialist, said the state agency received about 13,000 calls a day, and the single-day record was 60,000. In the rst two weeks of April, the TWC received an average of more than 2.2 million calls per day. In a single month, the TWC processed more unemployment insurance claims than it did in all of 2019. According to Gamez, the TWC processed about 700,000 unemployment insurance claims for Texans in 2019. Frommid-March to mid-April, according to Gamez, it processed 1.2 million claims worth about $408 million in benets. Locals have felt the eects of the economy grounding to a halt sharply. According to numbers fromWorkforce Solutions of the Capital area, unemployment in the Austin metro jumped a full percentage point—from 2.5% to 3.5%—from

Gamez said the TWC has set up additional call centers, hired employees on an emergency basis, shifted workers over from other departments and even secured help from the Capitol—bringing on sta from Texas House and Texas Senate members to help residents nd resources. All in all, he said, about 1,000 additional hires have come on board. “We’re going to continue to look for opportuni- ties to help more Texans in need,” Gamez said. Struggling small businesses seek help With residents across the country staying in their homes under government orders, businesses across every sector, from restaurants to auto repair shops to retail stores, saw their revenues plummet and very quickly began asking questions about how long they could hang on before going dark. The Small Business Administration’s Paycheck Protection Program was oered as a life raft to those businesses and their employees. Businesses applying for a PPP loan could receive enough from the SBA to cover their payroll expenses for eight weeks, and as long as 75% funds were used toward payroll, the loan is forgivable. But the money in the rst round of funding ran out quickly. Banks received authorization to begin making PPP loans to small businesses on April 3. By the morning of April 16, the entirety of the rst $349 billion allocated by Congress to the program had been distributed, including more than 88,000 loans to Texas businesses totaling more than $21 billion. The emergency funding largely sidelined Austin’s startups because of the way the SBA’s rules are writ- ten. The administration’s “aliate rule” stipulates that, when counting the number of employees at a business, all companies with the same investors must aggregate their sta numbers together.

Since many startups have multiple investors, tallying their numbers along with other, unali- ated startups, pushes the vast majority above the threshold of 500 sta members, making them ineligible to apply. After initially launching the PPP and other disaster-relief loan programs, the SBA issued new guidance to companies clarifying its policies, but the aliation rules were not waived completely. Matt Glazer, co-founder and managing director of consulting company Blue Sky Partners and a member of the Austin Tech Alliance’s advisory board, said startups being left out in the cold from the loan program jeopardizes companies that are actively participating on solving problems in the Austin community. “We may lose some of these brands and compa- nies, which will devastate our local economy—and we don’t need to do that,” Glazer said. On April 21, the U.S. Senate passed a deal to inject the program with an additional $310 billion. Nina Ramon, public aairs and economic relations specialist for the SBA, said eld agents will stay exible to help local businesses. “Our small-business community is resilient, and they’re going to do what it takes to stay alive and recover from the crisis,” Ramon said. Is there an exit plan? On April 17, Gov. Greg Abbott announced plans to lift certain restrictions in Texas to restore more jobs. However, Abbott said the reopening process




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