What’s happening on Main Street, USA?
Small Business has always been, is, and always will be, the backbone of America. In the recent past small businesses collectively employed more people than large corporations. But things have changed. Since 2008 small business has been on the decline.
Look at the data. A new report issued by the Small Business Administration (SBA) in January 2019 (pre-pandemic) shows that small businesses account for 44 percent of U.S. economic activity. The SBA concedes that while this is a significant contribution, the overall contribution made by small businesses has been on the decline since 2008. As a point of reference, in 2008 53% of the US economy was produced by small business.
The damage to small businesses across America due to the Covid-19 Pandemic is not yet fully known. In this issue of the Connector, Barbara Lloyd McMichael zeroes in on the local effects of a global pandemic by examining Kent, WA as a case study. Kent’s current efforts to grapple with the Covid-19 meltdown is a microcosm of what is happening in communities across America. While some grant programs have been implemented at the state and federal levels, many small business owners do not have enough resources to allow for the time it takes to receive funds.
In 1974, the three main issues negatively impacting small business were healthcare, taxes and regulatory issues. Nearly fifty years later, these same three issues that negatively impact small businesses have actually grown worse—a reality that needs to be examined during the 2020 presidential elections. It is also important to consider that the largest chunk of Trump’s tax cuts went to large corporations and the top 1%, throwing small businesses under the bus. Trump claimed his tax cuts were meant to expand and generate business activity, but large corporations used the money to buy back stocks, and intentionally leveraged themselves to increase their debt. Today corporate debt is at an all-time high.
Government isn’t doing what small businesses need, not only to start up, but to thrive and prosper. The Trump administration’s Paycheck Protection Program that was designed for small businesses has allowed large companies to be the first in line to receive the funds, thus draining resources. The resources made available by government, foundations and NGOs were inadequate prior to the global disaster of a pandemic. Today, they do not have the resources to struggle with a tsunami of unprecedented and unimaginable need.
This month, I profile the James J. Hill Reference Library that once served emerging entrepreneurs and business owners, experts and academics for nearly a century. I thought profiling this library was the perfect accompaniment to our feature article this month that focuses on small business in America, with emphasis on small businesses struggling to survive on Main Street, USA during the great pandemic of 2020.