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Analyzing COVID-19's impact on Spokane businesses

How much did the pandemic affect local business? Data from the Washington Department of Revenue showed us the real effects of the pandemic on businesses.

SPOKANE, Wash. — Spokane had business closure after business closure during the COVID-19 pandemic, with notable staple the White Elephant closing its doors in 2020.

Diving deep into the numbers, however, there’s more to the story of the pandemic closures in 2020-2021.

Sherri Davies owns Heavenly Teas, which has been open for six years. The business was doing well at the beginning of 2020.

“We were having some of our busiest months ever and then the pandemic hit. I didn't know what I was going to do. I really had no savings. It was all in that business.” Davies said. 

Like thousands of other businesses, Davies started applying for COVID-19 relief grants and loans to get by. But application after application came up short until a few local grants finally came through.

“We applied for everything we could. I mean, my employees weren't going to get paychecks. Without those grants, we wouldn't even be here. They gave us just enough to keep us going and help us survive.”

Davies was not alone in that relief.

According to data retrieved from the Washington Department of Revenue (DOR), about 6,700 businesses between 2018-2019 closed in those years.

However, compared to how many businesses closed in 2020 and 2021, only 3,300 businesses closed each year. Despite the rhetoric of how hard the pandemic was on local businesses, half the number of businesses closed during the pandemic compared to an average year.

“Because we made sure to provide kind of the government's sport, whether it was the payroll protection program, that PPP program, there was a bunch of tax credits given for employers for keeping employees on the books,” said Ryan Herzog, an economics professor at Gonzaga. 

Herzog claims that a combination of government funding and encouragement for businesses to stay open contributed to the lower-than-average business closures in 2020-2021.

DOR data also shows how many businesses opened during the pandemic, and suggest that the pandemic had no effect on the number of businesses opening between 2020-2021. 

Ryan Herzog said that could be because people used stimulus money to open businesses, or people realized they didn't enjoy the typical 9-5 job. 

With talks of a true recession on the horizon, Herzog said people likely won't see that stimulus support from the government again.

“Now, as we're fighting inflation, the last thing you want to do is if you're worried about inflation has put more money into the system, right?” Herzog said.

“You just hang on by your fingernails to try and make it through especially with inflation going up and prices of food have doubled," Davies said. 

It's yet another challenge local business owners have to overcome.

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