In the worlds of business and government, there’s an old saw about known unknowns and unknown unknowns.
There’s a cowboy holed up in a cabin. He looks out the window with a rifle, watching for cattle rustlers in the hills. He knows they’re out there, but he doesn’t know where. These are known unknowns. Then a 747 falls out of the sky and crashes into the cabin, killing the cowboy. The 747 is an unknown unknown.
For small businesses in Virginia, the COVID-19 outbreak represents an unknown unknown, and in the worst possible way. Through no fault of their own, their entire business model has been upended with no finish line in sight.
Overhead and fixed costs remain, but there are no sales or contracts coming in to cover them. A significant number have already folded. More will soon. More Virginians filed for unemployment in the past week than applied for it in all of 2019. Combined.
When the General Assembly convened in January, COVID-19 was nowhere to be seen in the US. The Chinese Communist Party told the world that there was no human-to-human transmission, and Virginia’s economy was roaring.
What a difference 90 days makes. The assumptions that underpinned the majority of the legislation Democrats passed in 2020 — that Virginia’s businesses and local governments were well positioned to handle an increase in fixed costs in terms of raising the minimum wage, adding a raft of new reasons for employees to sue their employers, and raising the cost of workers compensation insurance — are no longer operative.
Those bills still sit on Governor Northam’s desk, awaiting signature, amendment, or veto.
To his credit, Northam and his team have undertaken a number of steps to help small businesses handle this crisis — deferred tax payments and deadlines, as well as a disaster declaration that has helped to bring in Federal aid.
For all of its myriad flaws, Congress has produced a piece of legislation that will, at first blush, genuinely help small businesses get through this crisis. It includes money to keep payrolls flowing while they’re closed, delays on tax payments, and a host of other things designed to put money back into the cash register so they can keep the lights on.
But all that could be wiped out if businesses are still forced to conform to bills that perhaps could have been afforded during a roaring economy of January 2020. Vetoing these bills and asking the legislature to bring them back in the 2021 session, or amending them to take effect in 2022 or later, would give small businesses the chance to adjust to the new reality.
Said simply, it would remove several tons of bricks from the lifeboat, and keep many businesses — and the jobs they create — from disappearing under the waves.