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Paycheck Protection Program Participation in Tennessee's Green Industry: April 3-June 30, 2020

Alicia Rihn and Kimberly L. Jensen

No 305343, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics

Abstract: On March 11, 2020, the novel coronavirus disease (COVID-19) was declared a pandemic by the World Health Organization (WHO, 2020) and began to emerge in the United States. On March 13, 2020, President Trump issued a proclamation declaring that the COVID-19 outbreak in the U.S. was a national emergency (Whitehouse, 2020). As COVID-19 evidenced community spread, actions were taken by federal, state and local governments to help limit the spread. Some of these actions included recommendations or orders to stay at home, temporary closures or limitations of services by certain types of businesses (e.g., dine-in restaurants and bars), limiting meetings of organizations and institutions, travel restrictions and other actions. Tennessee Governor Lee issued Executive Order No. 22 (EO 22) with a safer-at-home directive, except for engagement in essential activities or services (State of Tennessee, 2020). Under EO 22, nursery and greenhouse growers, wholesalers and retailers and garden centers were deemed essential services, which meant that they could remain open (State of Tennessee, 2020). However, the COVID-19 pandemic and associated economic downturn impacted many other businesses in a variety of ways. In some cases, businesses were temporarily closed, limited in their business activities or directed to offer modified services. This may ultimately impact consumers’ access and ability to afford nursery and greenhouse products, if the consumers’ household employment status has been negatively impacted. Other firms experienced labor issues due to outbreaks or employee illness. In some cases, this likely impacted the available supplies of some products. Many businesses experienced impacts on sales of their products and/or services. For instance, green industry projections anticipate that industry revenue growth will slow in 2020, due to decreased per capita income and consumer spending, with the largest threat coming from supply chain disruptions and shortages, partially attributed to COVID-19 (IBISWorld, 2020). While nursery and greenhouse growers were considered essential, several economic forces led to unintended consequences due to the COVID-19 pandemic and have likely influenced the state’s nursery and greenhouse industry. First, the pandemic has had negative impacts on employment and consumers’ employment (Jensen, et al., 2020) and consequently incomes, which could negatively impact sales of nursery and greenhouse products (IBISWorld, 2020). For example, Tennessee’s unemployment increased from 3.3 percent in January 2020, to 15.5 percent in April 2020, and 11.0 percent in May 2020 (Bureau of Labor Statistics, 2020). Anecdotal evidence suggests, however, that national, statewide and local better-at-home recommendations and stay-at-home directives have encouraged some consumers to add to their landscapes, grow their own food at home or participate in other gardening activities (Murphy, 2020; Willjasper and Polansek, 2020), as many consumers count gardening as a healthy hobby (Conway, 2016; Soga, Gaston, and Yamaura, 2017). Third, nursery stock sales can be linked in part to the housing markets. Compared with February, the month just prior to the pandemic, housing starts declined in March-June, with the greatest decline observed this year in March and April (US Census Bureau, 2020a). In the U.S., new single unit housing starts declined from 994,000 in February to 666,000 in April. For the southern U.S., single unit housing starts declined from 732,000 in February to 612,000 in April. Fourth, in some cases, growers may have experienced temporary labor disruptions due to infection or health concerns among workers. An important component of keeping the nursery greenhouse industry supply chain disruptions to a minimum and maintaining the well-being of the industry is being able to keep workers on a payroll through the pandemic (Bartik et al., 2020).

Keywords: Labor and Human Capital; Production Economics (search for similar items in EconPapers)
Pages: 17
Date: 2020-09-18
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DOI: 10.22004/ag.econ.305343

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