Pandemic effects linger for Iowa businesses

Report calls for update of federal small business legislation

By: - March 17, 2022 6:46 pm

Mariela Maya, owner of Panka Peruvian Restaurant in Des Moines. (Photo courtesy of Cornerstone Public Affairs)

It’s been two years since Gov. Kim Reynolds ordered the closure of many businesses near the start of the coronavirus pandemic. Although the state-mandated restrictions are long gone, the effects of the disruption linger.

The beginning was pocked with the uncertainty of intermittent closures, limited hours of operation and social-distancing requirements that effectively limited the capacity of many businesses open to the public. Now, there are worker shortages and the increased costs to lure new employees, to keep existing ones and to buy supplies.

“It’s been a crazy roller coaster,” said Mariela Maya, owner of Panka Peruvian Restaurant in Des Moines, which had been open for about a year before the pandemic hit.

The early days of it were simpler to navigate for Maya, who was able to scale back her costs to staff the restaurant when to-go orders were the only option. Now that people expect to dine-in, it’s difficult to find enough workers, and the lunch rush has become more of a trickle with so many people still working from home. Her restaurant is located on Ingersoll Avenue west of downtown.

“Workforce continues to be the thorn in every company’s side, whether you’re small, medium or large,” said Joe Murphy, executive director of the Iowa Business Council, a group that represents 22 of the state’s top employers. “We’re still 84,000 people less-employed than we were at the start of the pandemic.”

Enticing those people to return to jobs has proven difficult. Those who quit to care for their children at home might still face challenges of finding child care or overcoming the disruption to their career, Murphy said. It’s pushed businesses to increase their starting wages and to rethink the ways they can attract employees.

One example: Pella Corp., a major manufacturer of windows and doors, invested in a child care facility in Pella with a capacity of 190, among other projects. The goal was to make the south-central Iowa town more appealing to its workers.

“Iowa leads the country with both parents working outside of the home, and so the need for child care is arguably more acute here in our state than in any other state,” Murphy said.

Small businesses can be disadvantaged in that regard because they are unable to provide the same level of benefits to their employees as larger companies. That is true for Ronald Carrillo, owner of a janitorial, power-washing and painting company in Mount Pleasant called Multiservices R&M.

Carrillo has 42 business customers and employs 14 people but is seeking to expand.

“We do not do good competition with large companies, especially for (health) insurance,” Carrillo said. “That is number one of the things that are asked for.”

He has raised his starting pay rates for employees from $12.50 per hour to $14.

Maya, the Des Moines restaurant owner, has also struggled to hire and retain employees. Before the pandemic, she had envisioned opening a second restaurant location, but there have been moments in the past two years that she contemplated closing.

She joked to her employees: “I think I’m going to sell the restaurant and work as one of you. It’s less stress and more money.”

Maya increased her starting wages from $13 per hour to $15 for dishwashers and from $16 to $19.20 for kitchen help, she said. Still, she has trouble attracting reliable employees.

Maya said she recently interviewed 25 people for several job openings. She hired five of them, but just one showed for work.

“And she only lasted a day,” Maya said.

Report calls for update of Small Business Act

Federal lawmakers should update their programs that support small businesses in light of the pandemic and of the vast changes that have happened in the two decades that have elapsed since the last major reauthorization of the Small Business Act, a recent report by the Bipartisan Policy Center and Goldman Sachs 10,000 Small Businesses Voices concluded.

The legislation governs the Small Business Administration, which notably distributed forgivable loans to small employers if they maintained their workforces during the worst of the pandemic. But it could do more to provide business loans — especially to non-white business owners — and to make it easier for small businesses to get government contracts, the report said.

It also said tax credits could help level the playing field for salaries and benefits offered by larger businesses, and child care should be addressed.

“When Congress last reauthorized the Small Business Administration, Amazon was best known as the world’s largest river, and the iPhone was still seven years away from being introduced,” said Perlla Deluca, owner of Southeast Constructors in Des Moines. “It is imperative that Congress reimagines the role the Small Business Administration can play in reinvigorating America’s economy with modernized programs, offering small business owners the support they need to succeed today – not the now seemingly ancient economy of 20 years ago.”

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.