Idaho’s Small Businesses Feel Impact of COVID-19

The second half of March saw an unprecedented surge in the number of unemployment claims filed in Idaho. During the week ending March 28 alone, the state recorded more than 32,000 initial claims – more than 3,000 percent greater than the number of claims just two weeks prior. Between March 15 and April 25, Idahoans filed 117,811 new claims.

A significant number of the jobless claims can be attributed to closures of restaurants, a vast majority of which are small enterprises with under 50 employees. According to the 2019 Quarterly Census of Employment and Wages, 94 percent of all restaurants in the state have fewer than 50 employees, and these small enterprises account for 77 percent of industry employment.

Generally, the Idaho economy, much like the rest of the nation, is dominated by small businesses. About 95.3 percent of establishments in Idaho have fewer than 50 employees and account for nearly half of total employment and about 45 percent of total wages. Businesses with fewer than 50 employees are less likely to provide paid sick and family leave as well as other benefits. In addition, they are less likely to have enough resources to keep afloat during temporary shutdowns.

By examining jobless claims in the light of known industry employment share for each establishment size class, an estimate can be made on the magnitude of job losses in small, medium and large scale enterprises. The data suggests small enterprises with fewer than 50 employees have been disproportionately impacted by the COVID-19 pandemic closures. About 60 percent of initial claims can be attributed to small enterprises even though these businesses account for only 49 percent of total employment. Close to one in five new claims can be tied to micro-establishments – businesses with one to nine employees. Industries hardest hit by the virus also tend to pay the lowest wages.