Seventh District Economic Development Organizations: Providing Stability in Tumultuous Times
From time to time, we use our blog to highlight the work of our partner organizations throughout the Seventh District to address the pandemic’s effects. As we consider the pandemic’s impact on small businesses, which have borne a great deal of hardship owing to the closings of and limitations placed upon restaurants, bars, and various retail establishments not considered essential, chambers of commerce in our district have been particularly important resources for their constituents and market areas.
Chambers of commerce are a vital source of stability and drivers of economic development in the communities they serve. During the pandemic, they have been crucial providers of information for policymakers, resources for industry leaders, and especially support for their small business members. Social unrest stemming both from longstanding, structural racism, and more recent tragic events that reached a tipping point with the murder of George Floyd, has also impacted business owners in many cities. As the Chicago Fed continues to gather information about the social and economic impact of these concurrent crises, we will from time to time highlight the work of an organization’s efforts to understand and address these effects.
The efforts of Greater Fort Wayne Inc. (GFWI), the chamber of commerce serving the Fort Wayne, Indiana, Metropolitan Statistical Area (MSA), demonstrate how chambers of commerce working with partners can support communities in periods of uncertainty in an effort to respond to emerging and increasing needs.
Chart 1. Unemployment rate, Fort Wayne MSA and State of Indiana, July 2019 through July 2020
Chart 2. New unemployment insurance claims, Fort Wayne MSA, July 2019 through August 2020
In the period leading up to the pandemic, the Greater Fort Wayne MSA experienced moderate but steady growth in jobs and payroll increases at 18 percent and 10 percent, respectively, from 2013 to 20171 with an average unemployment rate of 3.15 percent versus the state unemployment rate of 3.4 percent. As an indication of this healthy economic environment, in 2018, GFWI’s 1,400 members reported $115 million in annual payroll, created 2,445 new jobs, realized $336 million in private investment and $1 billion in building permits.2
However, during the pandemic’s early months, April and May 2020, the Greater Fort Wayne MSA, like most of the country, experienced the shuttering of many businesses. Unemployment spiked to 19.4 percent (see chart 1) with over 11,300 new unemployment insurance claims during the week of March 31, 2020, alone (see chart 2).
In response to these unprecedented impacts, GFWI telephoned almost 1,400 businesses over the course of ten days between March 20 and April 1 to inquire about how its members were faring. Owners reported concerns about liquidity and cash flow, as well as frustrations with accessing quickly deployed federal relief programs. Overwhelmingly, businesses owners placed employee health and safety first, staggering shifts, implementing work from home policies, or painfully electing to temporarily cease operations.
Even as many businesses accessed federal programs like the Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL), GFWI and its partners recognized that there was more support needed, including technical assistance. Thus, they partnered with local CPA, law, and insurance firms to ensure businesses were positioned for accessing relief as it became available. Another partnership with Brightpoint Development Fund (a community development financial institution or CDFI) created a reopening fund for Allen County businesses with repurposed federal Community Development Block Grant (CDBG) dollars to provide businesses with fewer than 30 employees with loans up to $20 thousand to cover rent, utilities, lease payments, payroll, and insurance.
As much as there was an immediate financial response needed, GFWI also turned to helping its business members think about safely reopening. Produced in partnership with Parkview Hospital, a video series— Roadmap to a Healthy Reopening—was tailored to 17 specific types of business/stakeholder groups with high levels of social interaction, such as hair salons and gyms, and has had over 12,000 viewers to date.
Amid the Covid-19 pandemic, the nation experienced social unrest with many communities searching for answers and a path forward. GFWI in partnership with the Fort Wayne Black Chamber, Greater Fort Wayne Hispanic Chamber, and the NewAllen Alliance introduced or refined four initiatives to promote diversity, equity, and inclusion:
- First, a webinar series covering topics surrounding race in the workplace was developed.
- Second, enhancements to the Leadership Fort Wayne (LFW) Program, including eight designated seats in the upcoming LFW cohort specifically for people from underrepresented backgrounds, as well as expanding the "history of Fort Wayne" curriculum to cover topics such as redlining and bussing.
- Third, roundtable discussions for CEOs and other key business leaders, led by guest facilitators, focusing on issues surrounding diversity and inclusion.
- Finally, expanding the GFW Inc. Bridge Program.
Last year’s pilot cohort included several businesses owned by people from underrepresented backgrounds, helping to accelerate their growth and exposure. To build on this momentum, GFWI has set a goal of adding ten corporate sponsors to support additional entrepreneurs from underrepresented backgrounds.
The challenges faced by GFWI and its members are shared by communities, businesses, and the organizations that serve them across our region and country. The Chicago Fed’s Project Hometown initiative has addressed some of these challenges in a series of panels informed by leading researchers, practitioners, elected officials, and policy professionals. Focusing on topics ranging from workforce to education to health and urban planning, reaching from Chicago to the state of Iowa to the central Wisconsin community of Wisconsin Rapids to Indianapolis, these virtual conversations capture the experiences of community members – both worrying and hopeful.