States throughout the Great Plains are so far seeing the biggest impact of Paycheck Protection Program loans — funds designed to help small businesses stay afloat during the coronavirus pandemic. The PPP allows business owners to keep workers on the payroll even while remaining partially or fully closed.
The U.S. Small Business Administration (SBA) approved more than $342 billion in PPP loans in the first round of funding, which ended April 16, and more than $188 billion in round two as of May 8. The program continues through June 30, or until funding runs out. Populous states like New York, California and Texas have been approved for some of the highest total amounts in both rounds.
But a different picture emerges when you take a look at each state’s average hourly cost of labor. PPP loans stand to go further in several Great Plains states plus Louisiana, Idaho, Maine and Vermont. These states may be in a stronger position to weather the effects of the coronavirus pandemic, based on how long workers there could remain employed on PPP funds alone. Of course, business owners are permitted to use PPP loan funds on other expenses, including rent, mortgage interest and utilities.
Image Credit: Kerkez/iStock.
Methodology
In order to rank the states in which PPP funds would cover the most hours of work, we compared the amount each state has been approved for in PPP loans to the number of workers and average employer cost of each hour of work (data from U.S. Bureau of Labor Statistics, 2019). We divided the total amount in approved PPP loans by the number of workers (this gives us total PPP loans per worker) and then by the average employer cost per hour worked. The final number is the number of hours each worker in the state could be paid by the amount of approved PPP loans.
In order to estimate the average employer cost of labor per state we used two metrics:
- State hourly earnings multiplier. This is the state’s hourly earnings by worker divided by the national average of hourly earnings per worker.
- National cost of employing a worker. This is the average cost of employing a worker at the national level. It includes not only the cost of paying a worker but also providing benefits for that worker.
We then multiplied the state hourly earnings multiplier by the national cost of employing a worker. For example, Alabama workers earn 84% of the national average. Thus using that multiplier, we assumed that, including benefits, it costs 84% of the national average to employ an Alabaman worker.
For example, including earnings and benefits, the national average cost of one hour of work is $37.10. The national average for earnings is $25.72. In Alabama, the average hourly earnings is $21.60. To determine the average cost of labor in Alabama then we divided $21.60 by $25.72 giving us .84 or 84%. That shows that on average Alabama workers earn 84% of the national average. We multiplied that number by the total cost of compensation figure ($37.10) to arrive at the final figure for Alabama: $31.16.
Here’s how much business owners in each state and the District of Columbia have been approved for:
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51. District of Columbia
Approved PPP amount: $2,312,874,920
Hourly cost of compensation for labor: 62.27
Total workers: 723,510
Value of approved PPP in hours of labor: 37,142,160
Value of approved PPP in hours of labor per worker: 51.3
Image Credit: Sean Pavone/shutterstock.
50. New Mexico
Approved PPP amount: $2,243,397,920
Hourly cost of compensation for labor: 32.61
Total workers: 823,570
Value of approved PPP in hours of labor: 68,786,436
Value of approved PPP in hours of labor per worker: 83.5
Image Credit: Deposit Photos.
49. North Carolina
Approved PPP amount: $12,702,340,652
Hourly cost of compensation for labor: 33.67
Total workers: 4,462,800
Value of approved PPP in hours of labor: 377,294,052
Value of approved PPP in hours of labor per worker: 84.5
Image Credit: Sean Pavone / iStock.
48. Virginia
Approved PPP amount: $13,059,061,099
Hourly cost of compensation for labor: 39.35
Total workers: 3,878,770
Value of approved PPP in hours of labor: 331,867,438
Value of approved PPP in hours of labor per worker: 85.6
Image Credit: DepositPhotos.com.
47. Washington
Approved PPP amount: $12,353,786,983
Hourly cost of compensation for labor: 43.01
Total workers: 3,318,510
Value of approved PPP in hours of labor: 287,203,365
Value of approved PPP in hours of labor per worker: 86.5
Image Credit: DepositPhotos.com.
46. West Virginia
Approved PPP amount: $1,837,071,249
Hourly cost of compensation for labor: 30.12
Total workers: 702,100
Value of approved PPP in hours of labor: 60,994,765
Value of approved PPP in hours of labor per worker: 86.9
Image Credit: iStock.
45. Delaware
Approved PPP amount: $1,486,300,695
Hourly cost of compensation for labor: 37.71
Total workers: 451,900
Value of approved PPP in hours of labor: 39,418,324
Value of approved PPP in hours of labor per worker: 87.2
Image Credit: Getty.
44. Arizona
Approved PPP amount: $8,859,612,866
Hourly cost of compensation for labor: 35.33
Total workers: 2,866,820
Value of approved PPP in hours of labor: 250,797,391
Value of approved PPP in hours of labor per worker: 87.5
Image Credit: Davel5957/istockphoto.
43. Maryland
Approved PPP amount: $10,094,683,411
Hourly cost of compensation for labor: 41.76
Total workers: 2,701,010
Value of approved PPP in hours of labor: 241,735,921
Value of approved PPP in hours of labor per worker: 89.5
Image Credit: DepositPhotos.com.
42. South Carolina
Approved PPP amount: $5,826,882,361
Hourly cost of compensation for labor: 30.78
Total workers: 2,107,760
Value of approved PPP in hours of labor: 189,294,890
Value of approved PPP in hours of labor per worker: 89.8
Image Credit: Kruck20 / iStock.
41. Nevada
Approved PPP amount: $4,111,052,430
Hourly cost of compensation for labor: 32.74
Total workers: 1,392,680
Value of approved PPP in hours of labor: 125,552,167
Value of approved PPP in hours of labor per worker: 90.2
Image Credit: DepositPhotos.com.
40. Massachusetts
Approved PPP amount: $15,039,265,688
Hourly cost of compensation for labor: 45.55
Total workers: 3,619,640
Value of approved PPP in hours of labor: 330,150,197
Value of approved PPP in hours of labor per worker: 91.2
Image Credit: Sean Pavone/iStock.
39. Kentucky
Approved PPP amount: $5,308,869,062
Hourly cost of compensation for labor: 30.52
Total workers: 1,896,900
Value of approved PPP in hours of labor: 173,933,568
Value of approved PPP in hours of labor per worker: 91.7
Image Credit: Jacqueline Nix / iStock.
38. New York
Approved PPP amount: $39,135,115,146
Hourly cost of compensation for labor: 44.37
Total workers: 9,522,980
Value of approved PPP in hours of labor: 822,017,779
Value of approved PPP in hours of labor per worker: 92.6
Image Credit: DepositPhotos.com.
37. California
Approved PPP amount: $69,215,924,449
Hourly cost of compensation for labor: 42.51
Total workers: 17,382,400
Value of approved PPP in hours of labor: 1,628,256,957
Value of approved PPP in hours of labor per worker: 93.7
Image Credit: DepositPhotos.com.
36. Arkansas
Approved PPP amount: $3,386,162,473
Hourly cost of compensation for labor: 29.6
Total workers: 1,217,420
Value of approved PPP in hours of labor: 114,400,386
Value of approved PPP in hours of labor per worker: 94
Image Credit: DepositPhotos.com.
35. Georgia
Approved PPP amount: $14,581,792,916
Hourly cost of compensation for labor: 34.4
Total workers: 4,471,860
Value of approved PPP in hours of labor: 423,857,232
Value of approved PPP in hours of labor per worker: 94.8
Image Credit: DepositPhotos.com.
34. Connecticut
Approved PPP amount: $6,877,466,024
Hourly cost of compensation for labor: 43.24
Total workers: 1,665,100
Value of approved PPP in hours of labor: 159,035,427
Value of approved PPP in hours of labor per worker: 95.5
Image Credit: Sean Pavone / iStock.
33. Tennessee
Approved PPP amount: $9,155,306,941
Hourly cost of compensation for labor: 31.66
Total workers: 3,007,710
Value of approved PPP in hours of labor: 289,158,151
Value of approved PPP in hours of labor per worker: 96.1
Image Credit: Swarmcatcher.
32. Indiana
Approved PPP amount: $9,664,484,919
Hourly cost of compensation for labor: 32.44
Total workers: 3,073,680
Value of approved PPP in hours of labor: 297,910,844
Value of approved PPP in hours of labor per worker: 96.9
Image Credit: DepositPhotos.com.
31. Texas
Approved PPP amount: $42,343,964,031
Hourly cost of compensation for labor: 35.01
Total workers: 12,431,200
Value of approved PPP in hours of labor: 1,209,535,976
Value of approved PPP in hours of labor per worker: 97.3
Image Credit: DenisTangneyJr.
30. Oregon
Approved PPP amount: $7,023,327,152
Hourly cost of compensation for labor: 37.37
Total workers: 1,905,860
Value of approved PPP in hours of labor: 187,919,799
Value of approved PPP in hours of labor per worker: 98.6
Image Credit: DepositPhotos.com.
29. Colorado
Approved PPP amount: $10,660,313,740
Hourly cost of compensation for labor: 40
Total workers: 2,678,490
Value of approved PPP in hours of labor: 266,512,247
Value of approved PPP in hours of labor per worker: 99.5
Image Credit: DepositPhotos.com.
28. Illinois
Approved PPP amount: $22,946,134,453
Hourly cost of compensation for labor: 38.24
Total workers: 6,025,790
Value of approved PPP in hours of labor: 600,063,017
Value of approved PPP in hours of labor per worker: 99.6
Image Credit: ibsky.
27. Missouri
Approved PPP amount: $9,354,061,763
Hourly cost of compensation for labor: 33.16
Total workers: 2,820,610
Value of approved PPP in hours of labor: 282,070,921
Value of approved PPP in hours of labor per worker: 100
Image Credit: DepositPhotos.com.
26. Alaska
Approved PPP amount: $1,308,107,954
Hourly cost of compensation for labor: 41.12
Total workers: 317,090
Value of approved PPP in hours of labor: 31,808,517
Value of approved PPP in hours of labor per worker: 100.3
Image Credit: Chilkoot/iStock.
25. Rhode Island
Approved PPP amount: $1,928,966,287
Hourly cost of compensation for labor: 39.68
Total workers: 483,580
Value of approved PPP in hours of labor: 48,610,613
Value of approved PPP in hours of labor per worker: 100.5
Image Credit: SeanPavonePhoto/iStock.
24. Iowa
Approved PPP amount: $5,171,216,826
Hourly cost of compensation for labor: 32.83
Total workers: 1,549,460
Value of approved PPP in hours of labor: 157,513,414
Value of approved PPP in hours of labor per worker: 101.7
Image Credit: ChrisBoswell/iStock.
23. Mississippi
Approved PPP amount: $3,189,706,683
Hourly cost of compensation for labor: 27.8
Total workers: 1,128,280
Value of approved PPP in hours of labor: 114,753,539
Value of approved PPP in hours of labor per worker: 101.7
Image Credit: iStock.
22. Minnesota
Approved PPP amount: $11,365,231,552
Hourly cost of compensation for labor: 38.76
Total workers: 2,880,650
Value of approved PPP in hours of labor: 293,229,511
Value of approved PPP in hours of labor per worker: 101.8
Image Credit: DepositPhotos.com.
21. Pennsylvania
Approved PPP amount: $21,438,616,497
Hourly cost of compensation for labor: 35.6
Total workers: 5,901,590
Value of approved PPP in hours of labor: 602,210,959
Value of approved PPP in hours of labor per worker: 102
Image Credit: weaver1234.
20. Ohio
Approved PPP amount: $19,054,028,555
Hourly cost of compensation for labor: 34.27
Total workers: 5,447,780
Value of approved PPP in hours of labor: 555,952,170
Value of approved PPP in hours of labor per worker: 102.1
Image Credit: User:OHWiki .
19. New Jersey
Approved PPP amount: $17,555,336,569
Hourly cost of compensation for labor: 41.6
Total workers: 4,087,950
Value of approved PPP in hours of labor: 421,998,550
Value of approved PPP in hours of labor per worker: 103.2
Image Credit: ChrisBoswell/iStock.
18. Alabama
Approved PPP amount: $6,388,445,582
Hourly cost of compensation for labor: 31.16
Total workers: 1,974,170
Value of approved PPP in hours of labor: 205,039,958
Value of approved PPP in hours of labor per worker: 103.9
Image Credit: DepositPhotos.com.
17. Wisconsin
Approved PPP amount: $10,103,034,914
Hourly cost of compensation for labor: 33.88
Total workers: 2,870,050
Value of approved PPP in hours of labor: 298,171,336
Value of approved PPP in hours of labor per worker: 103.9
Image Credit: Pixabay.com.
16. Hawaii
Approved PPP amount: $2,533,474,375
Hourly cost of compensation for labor: 38.1
Total workers: 635,500
Value of approved PPP in hours of labor: 66,503,602
Value of approved PPP in hours of labor per worker: 104.6
Image Credit: DepositPhotos.com.
15. Michigan
Approved PPP amount: $16,203,459,935
Hourly cost of compensation for labor: 35.22
Total workers: 4,344,230
Value of approved PPP in hours of labor: 460,001,401
Value of approved PPP in hours of labor per worker: 105.9
Image Credit: DepositPhotos.com.
14. New Hampshire
Approved PPP amount: $2,618,853,969
Hourly cost of compensation for labor: 37.42
Total workers: 660,480
Value of approved PPP in hours of labor: 69,990,382
Value of approved PPP in hours of labor per worker: 106
Image Credit: DepositPhotos.com.
13. Utah
Approved PPP amount: $5,466,410,096
Hourly cost of compensation for labor: 34.27
Total workers: 1,504,070
Value of approved PPP in hours of labor: 159,497,114
Value of approved PPP in hours of labor per worker: 106
Image Credit: AndreyKrav.
12. Nebraska
Approved PPP amount: $3,502,020,462
Hourly cost of compensation for labor: 33.47
Total workers: 982,040
Value of approved PPP in hours of labor: 104,647,233
Value of approved PPP in hours of labor per worker: 106.6
Image Credit: DepositPhotos.com.
11. Florida
Approved PPP amount: $31,273,758,992
Hourly cost of compensation for labor: 33.12
Total workers: 8,794,050
Value of approved PPP in hours of labor: 944,289,707
Value of approved PPP in hours of labor per worker: 107.4
Image Credit: DepositPhotos.com.
10. Oklahoma
Approved PPP amount: $5,545,658,087
Hourly cost of compensation for labor: 31.63
Total workers: 1,617,390
Value of approved PPP in hours of labor: 175,311,947
Value of approved PPP in hours of labor per worker: 108.4
Image Credit: DepositPhotos.com.
9. Vermont
Approved PPP amount: $1,204,993,245
Hourly cost of compensation for labor: 35.46
Total workers: 306,300
Value of approved PPP in hours of labor: 33,985,979
Value of approved PPP in hours of labor per worker: 111
Image Credit: iStock.
8. Maine
Approved PPP amount: $2,289,550,742
Hourly cost of compensation for labor: 33.61
Total workers: 611,170
Value of approved PPP in hours of labor: 68,122,630
Value of approved PPP in hours of labor per worker: 111.5
Image Credit: iStock.
7. Wyoming
Approved PPP amount: $1,052,322,090
Hourly cost of compensation for labor: 34.5
Total workers: 273,340
Value of approved PPP in hours of labor: 30,498,927
Value of approved PPP in hours of labor per worker: 111.6
Image Credit: Public domain.
6. Kansas
Approved PPP amount: $5,162,470,033
Hourly cost of compensation for labor: 32.27
Total workers: 1,392,480
Value of approved PPP in hours of labor: 159,988,444
Value of approved PPP in hours of labor per worker: 114.9
Image Credit: Ian Ballinger .
5. Idaho
Approved PPP amount: $2,613,933,893
Hourly cost of compensation for labor: 31.13
Total workers: 727,160
Value of approved PPP in hours of labor: 83,973,105
Value of approved PPP in hours of labor per worker: 115.5
Image Credit: DepositPhotos.com.
4. Montana
Approved PPP amount: $1,767,912,404
Hourly cost of compensation for labor: 31.46
Total workers: 468,000
Value of approved PPP in hours of labor: 56,195,577
Value of approved PPP in hours of labor per worker: 120.1
Image Credit: DepositPhotos.com.
3. North Dakota
Approved PPP amount: $1,794,651,598
Hourly cost of compensation for labor: 34.98
Total workers: 422,520
Value of approved PPP in hours of labor: 51,305,682
Value of approved PPP in hours of labor per worker: 121.4
Similar to South Dakota, third-place North Dakota has 422,520 employees in the state. Businesses in North Dakota have been approved for nearly $1.8 billion in PPP loans, which could support 121.4 hours for every employee in the state, based on an hourly labor cost of $34.98 per person.
About 24% of North Dakota businesses were approved for PPP loans in the first and second round of funding. Like in Louisiana, restaurants, salons, bars and gyms have recently been allowed to reopen at limited capacity. North Dakota businesses are required to follow industry-specific guidelines when reopening or risk facing fines up to $1,000.
Image Credit: sequential5.
2. Louisiana
Approved PPP amount: $7,372,097,929
Hourly cost of compensation for labor: 30.64
Total workers: 1,921,950
Value of approved PPP in hours of labor: 240,621,061
Value of approved PPP in hours of labor per worker: 125.2
More than 1.9 million people are employed in Louisiana, our No. 2 state. With statewide hourly labor costs at $30.64 per person, the $7.4 billion in approved PPP funding for Louisiana businesses could pay for 125.2 hours of work for each employee.
Louisiana recently entered the first phase of a reopening process after the governor lifted a statewide stay-at-home order. Local businesses such as nail and hair salons, gyms, casinos and churches can operate at 25% capacity, while restaurants also may resume serving dine-in customers at 25% capacity. Louisiana businesses and residents are expected to remain in Phase One through June 5.
Image Credit: DenisTangneyJr.
1. South Dakota
Approved PPP amount: $1,676,714,573
Hourly cost of compensation for labor: 29.76
Total workers: 425,140
Value of approved PPP in hours of labor: 56,345,205
Value of approved PPP in hours of labor per worker: 132.5
Our first-place state has 425,140 workers, and the hourly cost of labor in South Dakota is $29.76. As of May 8, South Dakota businesses have been approved for $1.7 billion in PPP loans, which could cover 132.5 hours of labor for each employee in the state.
South Dakota lawmakers have pushed for PPP funding to help farmers and ranchers, as well as tribally owned casinos and gaming operations in the state. In the first round of funding, 70% of South Dakota businesses applied for PPP loans, though just 23% were approved in the first and second rounds, through May 8.
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
Image Credit: elljay / Pixabay.com.
