Let’s get back to the small business boom

The last four years were characterized by a small business boom.

Tax cuts and thinning regulations allowed America’s entrepreneurs to do what they do best: innovate and create. As a result, over seven million jobs were created and wages trended upwards—encouraging millions of Americans to re-enter the labor force.

As recently as February, more people were working than ever before and the unemployment rate was at a half-century low.

But the invisible enemy turned the economic clock backwards by nearly a decade.

Job creation since 2011 has been erased with over 20 million lay-offs in April alone. New polling predicts more than half of small businesses could close down within six months and the unemployment rate has jumped to 14.7 percent. Without the Paycheck Protection Program (PPP)—which has provided a financial lifeline to over 4 million small businesses and saved more than 30 million jobs so far—economic conditions would have deteriorated further.

Society needs to reopen and small businesses should be the number one priority.

States and local governments across the country have already begun the process. Abiding by federal health and safety guidelines, leaders have taken steps to incrementally unravel the patchwork of restrictions that initially helped slow the spread of the virus and provide our hospital systems with time to prepare for more patients, but now prevent recovery. Georgia was among the first to do so in April. Dozens of states with controlled cases have since followed suit.

As government officials give the green light, businesses should cautiously take the lead on how best to resume. Business owners are in an advantageous position to formulate operational protocols that ensure a safe environment for employees and customers alike. Entrepreneurs know how best to apply common sense practices in their unique circumstances.

For example, restaurants should use disposable menus and avoid overcrowding. The local flower shop should limit how often customers handle the bouquet arrangements and encourage social distancing. Golf courses should disinfect golf carts more frequently and bar players from pulling out the pin before sinking a putt. Not all industries and businesses should follow the same playbook.

As small businesses are on the frontlines of reopening efforts, Congress also has a role to play.

The recent 1,800 page HEROES Act—which was passed by the House of Representatives last week—is an example of what not to do. Instead of a $3 trillion spending grab bag that includes a bailout of state pension funds and the U.S. postal service, lawmakers should pass temporary and targeted relief that specifically helps small businesses and their employees. Considering these entrepreneurs are the backbone of the economy, securing their survival should take precedent.

Suspending the payroll tax for businesses and workers—focusing on businesses with fewer than 100 staff members—for the remainder of 2020 is one proposal. The policy will act as a tax cut for small businesses and a pay bump for employees. Including the portion paid by employers, fifteen percent of every paycheck—which would usually go to Uncle Sam—will help entrepreneurs keep operations afloat and provide families with extra spending money to stimulate the economy.

Congress should also consider temporary legal protections for Main Street businesses that are strong, but narrow in scope. Trial lawyers are already lining-up to take a whack at businesses with coronavirus-related lawsuits. If ignored, the avalanche of legal actions could snuff-out recovery efforts.

Newton’s Third Law of Motion says, “for every action, there is an equal and opposite reaction.” Extreme steps taken by the government to mitigate the health impacts of the coronavirus provoked equally severe economic consequences. It’s high time we reverse the momentum and allow small businesses to kickstart the economy.

I, for one, look forward to returning to the small business boom.

Elaine Parker is the President of the Job Creators Network Foundation.