Lockdown proponents across the media are smugly patting themselves on the back, proclaiming that stay-at-home policies didn’t harm the economy. Try telling that to the millions of small-business owners who were irreparably damaged by prolonged and irrational restrictions.
With many big corporations deemed “essential,” and a stock market propped up by the Federal Reserve, it’s easy to see economic strength and miss the glaring weaknesses.
While Walmart and Target continue to beat earnings expectations, small businesses struggle to survive. Nearly two-thirds of them are hitting only half or less of their pre-lockdown monthly revenue levels, according to Alignable’s June Road to Recovery report.
Then there are the businesses that never recovered at all. The Biden administration recently projected that more than 400,000 small businesses have closed permanently, but that’s likely a massive underestimate: Already by June 2020, the Hamilton Project had counted 400,000 closures. Opportunity Insights data, meanwhile, show that by the end of May 2021, there were 38.9 percent fewer small businesses open nationwide than at the outset of 2020.
Small business forms the US economy’s backbone, accounting for more than 99 percent of all business entities, and before 2020, around half of growth domestic product and jobs.
And these businesses bore the brunt of lockdowns. The Alignable report found that 37 percent of small businesses couldn’t pay their rent in full and on time. Millions of small-business owners have six-to-seven-figure debt liability, much of it personally guaranteed.
Lockdown apologists insist people wouldn’t have patronized businesses even if the mandates hadn’t been imposed. The data say otherwise. Many big businesses didn’t face lockdowns, and they did quite well, often at the expense of businesses not deemed “essential.”
We never had anything that approximated full lockdowns; we were never “all in this together.” If the most powerful and well-connected firms were forced to share in the pain, it’s reasonable to think lockdowns wouldn’t have lasted so long. As it was, “15 days to slow the spread” turned into more than a year of lockdowns targeting the smallest companies.
None of these small businesses received appropriate compensation for governments’ subjugating their property rights. The Paycheck Protection Program was a fraction of overall relief — and a fraction of what was pumped into propping up the stock market.
And as if lockdowns weren’t enough, those small firms desperately trying to save their businesses now can’t find workers, thanks in large part to government interfering in the labor market via enhanced unemployment benefits and direct stimulus payments that incentivize not working.
If the government actively set out to reward big businesses and punish small ones, how would it look any different?
Businesses have many more intentional government bullets to dodge ahead. Mandates from raising the minimum wage to the PRO Act will make it harder for small-business owners to start and to stay in business.
This is an American tragedy. Small businesses provide economic freedom for tens of millions of people. Competition from decentralized small businesses leads to more jobs, more consumer choice and better prices that benefit everyone.
Putting more power in big companies’ hands is, of course, good for politicians; it’s easier to collude with thousands of big companies than tens of millions of smaller ones. But it is in no way good for the economy. Pretending otherwise is a dangerous farce.
We must tell the stories of small businesses and what they have endured. We can’t let the government and media rewrite history. We must support small business with advocacy and our spending choices and not allow for the government to murder any more of them.
Carol Roth is author of the new book “The War on Small Business,” from which this column was adapted.