228 Museums Reported to Have Laid Off 28 Percent of Employees Despite Receiving PPP Loans
October 15th, 2021
A report released last week by the American Federation of State, County and Municipal Employees (AFSCME) shows that 228 pandemic-hit arts and culture institutions who received aid via the United States’ federal Paycheck Protection Program (PPP) laid off a collective 28 percent of their workers, Hyperallergic reports, amounting to more than 14,400 people. Additionally, these institutions, all large organizations, accounted for half of all PPP funding, which totaled $1.6 billion and was distributed across about 7,500 institutions.
The funding was approved by the US Congress in March 2020 as the Covid-19 pandemic took hold, and was to be used by recipients to continue paying their employees. The idea behind that concept was that workers would keep their jobs, businesses would stay afloat, and the national economy would remain as stable as possible. Arts institutions in particular suffered tremendously as the virus surged, with most forced to shutter; the American Alliance of Museums (AAM) estimated losses sustained by closed museums across the country as totaling $33 million per day.
According to the AFSCME report, however, a number of larger institutions managed to make it to the end of fiscal year (FY) 2020 relatively unscathed. Looking at sixty-nine of these museums, AFSCME found that 69 percent of them reported operating surpluses at the end of that period, noting, “Through their massive endowments and dependence on wealthy donors, these large institutions already had the financial resources to withstand the pandemic-related shutdowns that many of their smaller counterparts lacked.”
Among the museums named in the report as laying off staff despite receiving PPP funding were the Museum of Contemporary Art, Los Angeles, which laid off 97 workers despite receiving $3.3 million in PPP loans and ending FY 2020 $2.3 million in the black; the Natural History Museum of Los Angeles County, which furloughed 127 part-time employees from March 2020 until the end of December that year, and which received a $4.8 million PPP loan and ended FY 2020 with a $23.9 million operating surplus; and the Museum of Science, Boston. Too large in 2020 to qualify for a PPP loan, which are reserved for businesses with 500 or fewer workers, the museum laid off 309 employees—almost half of its workforce—as the pandemic surged, and was able to apply for a subsequent round of funding. It received a $4.7 million PPP loan in 2021.