The Coronavirus’ toll on low-income workers and entrepreneurs

By Rudy Espinoza

The Coronavirus has gone viral (pun intended). Over the last week, we’ve seen headlines taken over by the threat of illness in our communities. Supermarkets, big box stores, and even Amazon are sold out of hand sanitizer, anti-bacterial wipes, and toilet paper. Employers are telling their workers to stay home. Some countries have asked their citizens to stay home. Amid the headlines and videos of people fighting over palettes of water bottles, what we are not talking about is the impact this illness, and the economic uncertainty it is creating, is having on workers, micro-entrepreneurs, and others who depend on healthy communities.

This past week, we heard a handful of stories from the workers and entrepreneurs who participate in our Semi’a Fund; they are already feeling the economic impact of the Coronavirus, the latest threat to their already vulnerable livelihoods. 

The applications we receive for our loan fund are the epitome of what the late University of Michigan Stephen M. Ross School of Business professor C.K. Prahalad calls “The Bottom of the Pyramid,” entrepreneurs who are an integral part of our local economy, in fact the foundation of it, but are usually not given the attention and resources they deserve. Economic development strategies we often see in our cities tend to focus on large employers (let’s say, Amazon), as opposed to the thousands of sole proprietors that operate businesses as their main source of income. 

Our borrowers face tremendous odds to advance their businesses and their families. Many of them struggle with the usual issues entrepreneurs face, but our clients also face a variety of other challenges, from managing diabetes without comprehensive healthcare, rising rents (for both their business and household), grappling with their immigration status, and the constant anxiety of being unable to pay a bill if they happen to have too many “slow” days in a row.

The Coronavirus is impacting everyone’s lives, but we should consider that some of the most vulnerable among us are the low wage workers and micro-entrepreneurs who as a result of not being able to secure a job have created their own. Even with widespread calls to stay home and avoid contact with other people, hundreds of thousands of workers and low-income entrepreneurs may not have that privilege; they must choose between managing the threat of an illness or provide for their basic needs like food, housing, and healthcare.

The loan applications we reviewed this week illustrate the challenges micro-entrepreneurs are facing. One entrepreneur relies on her fruit business to pay for her household bills. When she doesn’t have sufficient working capital to buy fruit for her business, she cannot invest in more produce to make sales, so her profits drop and she struggles to make enough to survive. As customers are staying home, she is now worried that even if she does secure capital, she won’t have anyone to sell to. 

Another client has a more “established” business, a mobile food business that relies on festivals and gatherings to not only sustain himself, but also the workers he employs and their respective families. When gatherings are cancelled, expenses are cut. What’s more, he just got word that his whole suppliers are placing caps on staple products like rice, which he needs to make burritos. With less supplies, he has less product to sell, which then translates into less revenue.

If you’re reading this, you probably have the option and privilege of “working from home,” but the majority of workers and micro-entrepreneurs, the bottom of our economic pyramid, simply don’t have that luxury. When a crisis hits, they are the most vulnerable. Low wage workers, micro-entrepreneurs, small businesses and entire families will feel this crisis more than anyone else, even if they don’t actually get sick.

For me, the Coronavirus is revealing once again the lack of infrastructure our country has to protect the most vulnerable. As Italy moved to shut down most of its country to business, they have also worked feverishly to freeze mortgage payments and support residents. Why does it feel that a government intervention that directly supports the vast majority of low-income people could never happen here?

If there is one thing we learn from this pandemic, it is that we are all connected no matter the borders we physically, socially or mentally construct. 

We must advance initiatives that are truly equitable; equitable initiatives are those that focus resources on the most vulnerable among us, low wage workers, those without access to health care, and the micro-entrepreneur whose very livelihood can be severely impacted by too many people “working from home.” We must demand, especially in times of crisis, we do everything possible to support vulnerable communities: paid sick leave, freezing rents, direct cash transfers to low-income families, free and accessible healthcare, and wholesale restructuring of debt, even if only temporary, to support those who need it.

Most challenges offer us an opportunity to learn, to grow, and to show what we’re truly made of. My hope is that we don’t forget who makes up the foundation of our communities and our economy: the worker and entrepreneur who has no choice but to step out into the world to take care of their families.