SAN JOSE, Calif. (KRON) –– Throughout California, small businesses continue to struggle despite Governor Gavin Newsom lifting stay-at-home orders last week.
In the Bay Area, small businesses in the hardest-hit industries like sports and recreations (gyms), food and beverage (restaurants), and retail have continued to reduce or stall staffing levels throughout the month of January.
In Berkeley, El Patio, which sells a blend of Mexican and Venezuelan dishes, continues to face significant challenges amid the pandemic and over the last several months has seen sales decrease only after reopening efforts were stopped and another lockdown ensued.
Although Governor Newsom lifted restrictions statewide last week, the restaurant has had to furlough their head chef and front of house staff as well as reducing the amount of staff members in the kitchen.
“I myself am unemployed right now, there wasn’t enough work for me, I myself had to step back,” said Hamei Hamedi, manager for El Patio.
“We pretty much ran on a skeleton crew in the kitchen, on top of that transitioning from being a place with a patio and people coming to hangout, spend time, birthdays, special events to transition to using delivery apps and using technology more than we did before.”
But news of stay-at-home orders being lifted didn’t bring much good news to other small businesses.
Owner Shannon Adams tells KRON4 News she can’t wrap her head around the fact that people can get their nails or hair done, but her studio is forced to be closed.
Adams says the studio applied for state grants but got waitlisted.
“We’re over 1,700 square feet and we can’t have a socially distant private Pilates or Gyrotonic lesson fully masked, air purifiers on, all sanitation as good as it could possibly be, that we still can’t do that,” said Adams.
“We can’t operate the way we need to operate, it’s really hard, if you’re gonna force closure you got to be able to help us financially a little bit.”
New data reveals how strict lockdown orders impacted hiring and headcount at small businesses throughout California including the Bay Area.
According to a report from Gusto, during winter lockdown California’s outdoor dining, spa services, and more suffered as hiring stalled for four consecutive months and furloughs at a five-month-high.
Small businesses in San Francisco, the East Bay, and the South Bay just barely hit pre-pandemic hiring levels, 10 months after the first lockdown orders were issued in the Bay Area.
Data shows San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara metropolitan areas both reached headcount levels 0.2% and 1% greater than March of last year, respectively.
Hard-hit industries throughout the Bay Area continued to reduce or stall staffing levels throughout the month of January: Sports & Recreation (-3.67%), Food & Beverage (-1.41%), and Retail (0.92%).
But most of that hiring is coming from desk-based jobs in professional services, according to the report.
“We see that [small businesses] are in a very fragile position coming into the new year, whatever recovery they’ve been able to couple together since March and April has stalled out in December and the beginning of January,” said Luke Pardue, economist for Gusto.
“The small business economy in the Bay Area particularly is at an inflection point where we risk diving into double-dip recession which would be particularly harmful.”
Pardue says a key takeaway from these findings is the divide in the recovery between hard-hit industries and industries that have been able to transition to remote work.
“Small businesses like restaurants, salons, and spas, those sorts of businesses that rely on face-to-face interactions remain 10% below their March employment levels,” said Pardue.
“And any growth in San Francisco has been driven by professional services.”q