The coronavirus crisis is having a financial and psychological impact on the self-employed

The coronavirus crisis and the associated lockdown have had a significant impact on the operational, personal and mental-health situation of the self-employed and business owners in Switzerland. This is shown by surveys conducted by the Faculty of Economics at the University of Lausanne (HEC Lausanne) as part of the Enterprise for Society Center and the KOF Business Cycle Research Centre at ETH Zurich. Around 1,000 self-employed individuals, members of the liberal professions, and business owners took part in these surveys in mid-April.

The results show that many of the self-employed suffered huge losses of sales in April. These losses were highest in the hotel and tourism sector, averaging 100 per cent. Restaurants and bars (down 96 per cent), hairdressers and the cosmetics industry (down 90 per cent), and the arts and culture sector (down 70 per cent) also reported substantially reduced sales.

Many self-employed people have only a small financial cushion available to mitigate the impacts of the crisis. More than half of these businesses have suffered a sharp or very sharp decline in their liquidity and financial resources. Many self-employed individuals reported that the turnover lost in April amounted to more than half of their total private financial assets. Nevertheless, it appears that, overall, relatively few people have taken on additional debt as a result of the crisis.

Marked deterioration in people’s mental health

The challenging operational situation has impacted on respondents both personally and psychologically. Roughly 50 per cent of them report that their household income is lower. This figure is around 75 per cent among self-employed individuals who have had to close down their businesses completely during the lockdown.

The mental health of the latter group has also deteriorated markedly during the lockdown. 13 per cent of those surveyed stated that they had been worried about their financial survival at the beginning of March. At the time of the survey 52 per cent still felt such fears. The proportion of those suffering from depression in this group rose from 10 per cent to 26 per cent, while those reporting tensions in their personal relationships increased from 11 per cent to 24 per cent. However, the proportion of those who have sought psychological or psychiatric help has remained stable.

Reopening seems to be coming at just the right time

Around half of the respondents who run a hairdressing or beauty salon stated in mid-April that their businesses could cope with the shutdown for a maximum of one month. Most bar and restaurant owners also replied that they would not be able to survive the shutdown for much longer. If we take these statements at their word, the reopening of these businesses on 27 April and 11 May respectively has come – or will be coming – at just the right time.

In the wake of the coronavirus crisis the Swiss government has taken measures to mitigate the economic impact on businesses and the self-employed. Despite all the difficulties involved, the self-employed seem remarkably satisfied with these measures. 54 per cent consider the measures taken by the federal government to be ‘just right’. Across all sectors, however, 29 per cent say that these measures are either fairly or clearly inadequate. This proportion rises to 38 per cent among respondents who have had to close down their businesses. In addition, there are also regional variations that correspond to the regions affected by the pandemic. For example, 42 per cent of the self-employed in Ticino feel that the measures taken are either fairly or clearly inadequate.