This National Small Business Week (Sept. 20-26) has a somber tone thanks to the 400,000 such businesses we’ve lost since the COVID-19 pandemic began. A survey five years ago found that 80% of small-business owners traded the security of 9-to-5 jobs to pursue their passions, even though many ended up working longer hours. Today, much of that work is being undone.
Among the many people in need of help during our recovery from lockdowns and lawlessness are those who brave bankruptcy to chase the American dream, create jobs and keep our neighborhoods vibrant. Like many of you, my McLean, Virginia, neighbors are doing what they can. Will it be enough?
We’re losing brick-and-mortar stores as Americans stay home. Some have been lost to senseless vandalism. One African American firefighter in Minneapolis used his life savings to start the Scores Sports Bar only to see it burned to the ground. Those of you who own businesses could be forgiven for taking country singer Johnny Paycheck’s advice: “Take this job and shove it, I ain’t working here no more.” But we still need you.
This is a freedom we don’t often talk about: to work where one chooses through ownership. As historian Andrei Sokolov has written of the former Soviet Union, labor contracts were once locked in for five-year terms, and downtrodden workers posed “poisonous” questions like “When will we be allowed to change freely from one enterprise to another?”
This freedom allowed the Mkandawire family to migrate from Malawi, a landlocked country in South Africa, to McLean in 1992. According to the World Bank, Malawi ranks 153rd out of 190 countries on the ease of starting a new business. The United States is 55th.
There are seven recognized languages in Malawi, but English is not one of them. Nevertheless, four years later, 16-year-old Burton Mkandawire applied for a job bussing tables at McLean Pizza, which had been open since 1962. He worked his way up to waiter, and in 2017 had saved enough to buy the place with a partner from Saudi Arabia.
Burton has his small business, which may not have been possible in Malawi, but now he struggles to keep it. He used to have 20 tables full every night and during most lunches. That’s down to one or two tables, because many customers come from nearby offices and banks which are closed.
But he has hope, as neighbors are doing their best to help. Old high school friends have just donated money. On the Nextdoor app, McLean neighbors urge each other to go for the fantastic wings and pizza. The landlord has reduced his rent. He also says Paycheck Protection Program loans and grants have been a help, though more aid appears to be politically dead for the next few months.
There are more problems on the way. Burton will have to face the No. 1 problem for small businesses: Premiums for family coverage have risen 54% in the last decade. The 2017 Tax Cuts and Jobs Act helped lower the tax burden, but property and state taxes on business income are now a huge concern.
These are our friends, families, and neighbors. Women own 36% of all businesses, 99.9% of which are small businesses. Minorities own almost one-third of all small businesses, accounting for more than 50% of new U.S. businesses recently.
Are those who seek to represent us at all levels of government paying attention? Can we enable people who have sacrificed everything to start their businesses, and who are now struggling to hold on, to keep the doors open? Will we preserve opportunities for those who dream of someday owning their own business?
In addition to practicing zero tolerance for burning or vandalizing property, leaders must —now more than ever —keep government burdens, including taxes, regulations and health care costs, down as much as possible.
Nearly 95% of our small-business owners plan to vote. In better economic times, when the Small Business Regulatory Enforcement and Fairness Act was put to the vote in 1996, the “yea’s” were 100-0. That’s a good statistic to pay attention to.
Richard Williams is a senior affiliated scholar with the Mercatus Center at George Mason University and former director for social sciences at the Food and Drug Administration’s Center for Food Safety and Applied Nutrition.