Vulnerability in Common: Culture, Freelancers and Small Businesses
Last month we featured a story about the call for a culture strike in response to the Spanish government’s declaration regarding the lack of assistance for people who make their living in the cultural sector. The majority of these professionals are autónomos (freelancers), which means that they pay their own social security quotas every month. They often work on a project-by-project basis, and do not have a typical work contract nor the protections and stability that comes with one. Bassist Ramon Vagué, who was interviewed for the article about the culture strike, is an autónomo. As he said in his interview, the “umbrella of the self-employed and intermittent worker is made of paper” when it comes to weathering the proverbial storm in an economic downturn.
“Culture seems to always be the last in line when it comes to economic aid, and places like ours are not a priority, regardless of the economic and other kinds of value they represent. We are a fundamental part of society, but we are seen as expendable by the system.” —Carme Porras Aguilera
All freelancers, regardless of their field, have been left in an economically vulnerable position due to the COVID-19 pandemic. They do not have sick days or unemployment benefits to fall back on in the same way that an employee does. They don’t have the possibility of earning a full or a partial salary while their employer receives government aid in the form of an ERTE (expedientes de regulación temporal de empleo): payments provided by the government during a temporary cessation of activity by a company due to exigent circumstances.
Freelancers have had their income severely reduced during the quarantine, and in many cases, it has completely disappeared. Owners of a small business are in a similar situation; they have the benefit of being able to apply for the aforementioned ERTE, but they have to bear the additional responsibilities of payroll, rent and utilities for their places of business.
No Safety Net
Everyone is looking to the government for help. The local government has implemented several measures designed to assist both freelancers and small businesses, such as pushing back the payment date for quarterly taxes by 30 days (from April 20 to May 20), as well as offering the possibility of a one-time €300 payout for freelancers who qualify for their Autòno+ aid program.
It has created the Tax Support and Advice Office, which offers information online or by phone. On March 17, 2020, the ajuntament (city hall) posted on its website that “once it is up and running, the goal of the office will be to offer personalized plans regarding payment terms for municipal taxes. The plans will adapt to the reality of each company, to entrepreneurs and individuals. Periods for payments, appeals and rebate applications for all municipal taxes are being extended while the state of emergency lasts.” This doesn’t mean that taxes won’t be collected; all taxes will be delayed but must still be paid.
That was on March 17, 2020; on March 31, 2020, all freelancers’ monthly social security quotas were automatically debited from their accounts, even though they’d been in quarantine and without income for over two weeks. Why? Social security taxes are national—not municipal—taxes.
Short-Term Solutions for Long-Term Problems
In response to the successive outcry, the Spanish government’s Ministry of Labor and Social Economy has offered the possibility of a loan for self-employed people who can prove a drastic and involuntary reduction in their turnover (at least 75%) as a result of the coronavirus, provided they do not have any additional sources of income.
“In the last several years they have bombarded us with the mantra of entrepreneurship. The government has encouraged us to start companies, to be creative, and not to fear failure. But where is this support and encouragement when these same companies are in trouble now?” —Carme Porras Aguilera
Both autónomos and entrepreneurs have seen their resources dry up since the government declared a state of emergency, but the short-term economic dangers generated by six weeks with no cash flow are far outweighed by the probable long-term economic impact of the pandemic. Industries that depend on public gatherings to function—live performances, trade fairs and conferences, bars and restaurants for example—are especially vulnerable, as it isn’t known when they will be able to resume activity, and to what extent necessary prevention measures and the fear of contagion will continue to impact their businesses.
Temporary solutions are intended to put their citizens at ease in this time of crisis, but what does the future really look like from the position of an autónomo or a small business owner today?
La Revolta: Cultural Center & Restaurant
Musicians aren’t the only ones who make their living from public gatherings: so do independent restaurants and bars. La Revolta is both a restaurant and cultural center, located in El Clot neighborhood. It offers visual art exhibitions, live music, and gourmet food, and is the brainchild of sisters Carme and Espe Porras Aguilera. They are both teachers, but their dream had always been to open a space that foments local culture in their neighborhood. In the short 18 months that they’ve been open, they’ve amassed a clientele that come from all over the city and even from out of town to try their delicious dishes as well as attend their concerts and events.
Carme says that in the post-Franco years and especially since the 1992 Olympics, Spain has desperately wanted to see itself as a player on the international scene: a tourist destination, attractive to foreign investors as well as startups.
“In the last several years they have bombarded us with the mantra of entrepreneurship. The government has encouraged us to start companies, to be creative, and not to fear failure. But where is this support and encouragement when these same companies are in trouble now?” she asks. “Yes, loans and some general aid packages have been announced, but many of us have not seen any money come through. The banks say the government hasn’t paid, and the government says the banks are slowing down the process.” And the small businesses are left drowning in the middle.
Handing Out Band-Aids
The sisters say that the uncertainty is the worst part. Their company has filed for an ERTE, but they say that if the state of emergency drags on much longer, they don’t know how they will survive. It is unclear when it will be permitted to organize or attend public gatherings, and even when it’s legally allowed, no one knows the impact that public fear of contagion may have on business.
The measures announced by the government may provide temporary relief but are not a solution to what looks like will be a long-term problem. “They aren’t concrete solutions that show us a way forward, they’re only a bandage to help get us through the next few weeks—if and when the money comes through. What happens after that, when it’s time to pay back the loans?” they ask. “No one knows. We won’t be able to continue if something doesn’t change.”
Carme and Espe say that the losses are not only economic; there are also intangible damages to the fabric of the neighborhood and its day-to-day. La Revolta has had to cancel all concerts and art exhibitions for the foreseeable future. The loss of these events is a loss for the community: for the neighbors who come to the shows with their whole families, the other local businesses nearby that benefit from the influx of people, and so on.
Everybody Loses
If La Revolta is unable to survive and has to shut its doors, the energy their space injects to the community will also disappear, and the loss of the cultural space would be a huge hit to a working-class neighborhood that has reinvented itself only recently.
The “umbrella of the self-employed and intermittent worker is made of paper” when it comes to weathering the proverbial storm in an economic downturn. —Ramon Vagué
As Carme says, “Culture seems to always be the last in line when it comes to economic aid, and places like ours are not a priority, regardless of the economic and other kinds of value they represent. We are a fundamental part of society, but we are seen as expendable by the system.”
And as for the musicians who play at their venue: “A self-employed musician, who carries his guitar on his back and goes on tour, is a hero in our eyes. The cost of being self-employed—the taxes imposed on their activities—is so high, and the help offered to them in times like these is insignificant, or impractical. If it’s hard for a small business, we can’t imagine what it must be like for them,” says Espe.
“You could say that we have that vulnerability in common,” Carme says. “We are all small, whether we are a small company, a freelancer, or a self-employed artist.”
Alma de Boquerón: Musicians & Artists
One of the musicians who plays regularly at La Revolta is Jordi Nacenta, whose band Alma de Boquerón recently released its fifth album while in quarantine.
He says that the lack of recognition of the value of the culture sector by the powers that be makes him uneasy regarding the future. “With no income, I don’t know how they expect people who work in the arts to keep living,” he says. “None of the steps that the government has taken is specifically addressed to the cultural sector.”
Instead of performing in a sold-out theater to present its new album this month, the band had a live interview session on Instagram and posted the new record on online streaming platforms. This represented a huge economic hit after a year of preparation for the release.
All of the group’s paying gigs are cancelled through the summer, some through 2021. In order to stay connected to the public, the band offers free online concerts on Sunday afternoons, which Jordi says helps maintain contact with fans and adds a little joy to their lives as well as his.
None of that helps to pay the bills.
“If the government would declare a hiatus on utilities, rent and mortgages until the economy can get back on its feet, it would be a partial solution,” Jordi says. “To order the closure of a market for an indefinite time and not address the consequences—for all of its citizens—does not fix the problem caused by the global health crisis. In the long term it makes it worse. We’re all doing what we can to survive.”
He is also concerned about local businesses like La Revolta. If these small venues disappear, it would have a considerable impact on musical projects like his own, and he values what these spaces add to the city as a whole.
Displaymania: Small Marketing Business
Apart from the artistic side of things, Jordi and his wife Rosabel Gutierrez understand La Revolta’s plight better than most, as they themselves are small business owners. Their company, Displaymania, is a marketing company that specializes in displays for trade fairs and corporate events. All fairs in greater Spain and in other EU countries have been cancelled at least through the summer.
Although Rosabel is an inherently positive person and is trying to make the best of things, she says the situation is dire no matter which way you look at it. “While I think that the government restrictions to try to protect our health have been put into place with good intentions, the economic proposals they’ve offered are extremely generic,” she says. “We need packages that financially support the consequences of the COVID-19 pandemic in a specific way so that self-employed workers and entrepreneurs have a chance at survival. The situation is dynamic, it’s changing every day, so we need dynamic solutions that take into account the long-term impact,” she says.
Their company is also surviving thanks to an ERTE, but just like La Revolta, it’s not a long-term answer to their problems. The prohibition on public gatherings of a certain size brough Displaymania’s income down to zero two weeks before the state of emergency was declared. “Our business is based on events,” she says. “Without them, we have no business. We are absolutely paralyzed.”
Between a Rock and a Hard Place
Rosabel says that if the moratorium on public gatherings continues for much longer, even the ERTE that has enabled their company to continue to pay their people recently won’t be enough. “We won’t have a choice; the losses will be too great. We’ll have to make some tough decisions,” she says.
“They aren’t concrete solutions that show us a way forward, they’re only a bandage to help get us through the next few weeks—if and when the money comes through. What happens after that, when it’s time to pay back the loans?”
The terms of an ERTE state that an employee may not be fired in six months immediately following the renewal of activity by their employer. But what happens to both employee and employer if the company is not able to resume normal activities? There is no provision for either of them then.
Incidentally, due to the vagaries of Spanish law covering business structure, Jordi is technically the company’s “owner” and Rosabel is legally an autónomo, even though they manage the business together. As freelancers, a small business, and artists, they are affected on all sides by this challenging situation.
“And we’re homeschooling our kids,” says Jordi. “I have an extra grey hair or two, believe me!”
Apples to Oranges: Month-to-Month Comparisons
As a freelancer, someone in Rosabel’s position could technically take advantage of the loans offered to autónomos, which sounds like good news. But in order to qualify for the loan, the accreditation of economic losses in March 2020 must be compared to the same month of March 2019.
Temporary solutions are intended to put their citizens at ease in this time of crisis, but what does the future really look like from the position of an autónomo or a small business owner today?
The problem with this is that many freelancers may have significantly different workloads (and payouts) from one month to the next. Many depend heavily on certain parts of the year to see the fruits of the entire year’s work; for example, spring is trade fair season for events companies like Displaymania. Much of the work of the year goes into preparing for this season, and they might get paid for their work several months later. To compare this March with last March doesn’t paint an accurate picture of their lost income. With all fairs and other public events cancelled, they will have no way to make up for lost income for this fiscal year, the money would have to be paid back sooner or later.
Musicians and culture workers are in a similar situation: if by chance they were touring or performing heavily last April, but in March they were in the process of preparing for the tour and therefore showed little to no income, they wouldn’t be able to avail themselves of this assistance either. If they were lucky and their calendar lined up in such a way that they could, there would be no money to pay it back.
Where Do We Go From Here?
All of this amounts to a grim picture with grey clouds on the horizon, whether you’re an entrepreneur or self-employed; but in spite of everything, Rosabel, Jordi, Carme and Espe each say they are doing everything they can to remain positive. As the Spanish expression goes, “no hay otra” (that’s the only choice there is), and they believe that in the end some kind of solution will present itself.
“Hopefully, this crisis will cause a paradigm shift,” says Carme. “Hopefully, each and every one of us who is working hard to make culture, music, or our business survive will find a way through this, and we can all toast someday to having come out on the other side better and wiser.”
“And if that toast can be at La Revolta, with its doors still open and art still hanging on its walls, with Alma de Boquerón playing in the background,” says Espe, “so much the better.”
I’ll drink to that.