A recent study is giving Americans grief over just how harmful draconian economic lockdowns have been for small businesses throughout the country.
The Small Business Credit Survey 2021 survey reached more than 15,000 small businesses at the height of the 2020 COVID-19 pandemic. The survey received nearly 10,000 responses from a nationwide sample of small business operators who employed fewer than 500 full-time or part-time employees across all the country.
The survey report discusses the “wide-reaching effects on small business operations” brought about by the year-long COVID-19 crisis. For example:
- 95% of the firms acknowledged that the pandemic “impacted their business.”
- 26% closed temporarily
- 56% reduced their operations and 48% modified their ways of doing business.
The CARES PPP Rescued Some
More than 90% of the surveyed small businesses had to rely on emergency funding to overcome the financial impacts of the pandemic. The Paycheck Protection Program (PPP) of the 2020 CARES Act was the most commonly used program.
The PPP was a $670 billion chunk of the CARES allocation. The bill added another $284 billion in December 2020 and offered a second round of forgivable loans. Small businesses can get government money, and in many cases the funds received do not have to be repaid.
82% of surveyed firms applied for PPP, and 77% of the applicants received all the funding they sought. The use of PPP funds helped many small businesses retain or rehire their employees. While 45% of the firms receiving the funds still had to cut staff, 71% of firms that could not qualify for the funding reduced the number of employees on their payroll.
Many Small Businesses Say They Need More Help
Now, as a Congress considers a fresh round of COVID-19 aid, about one-third of the country’s pandemic-impacted small businesses are warning that they won’t survive without additional help. The survey report found that sales for 88% of the small business community still have not returned to pre-pandemic levels.
The new round of small business assistance will set aside $40 billion for businesses with 10 or fewer employees with loans under $250,000 in low-income areas. Businesses with fewer than 300 employees will be eligible for a second loan, capped at $2 million. So, congressional Democrats are hoping to pass President Biden’s $1.9 trillion relief plan with another $15 billion for PPP for small businesses.
Progressives Want to Double the Federal Minimum Wage
Also, progressives like Senator Bernie Sanders see the new relief package as an ideal opportunity to pass legislation to double the U.S. minimum wage to $15 by 2025. President Biden, on the other hand, is not optimistic that the big spenders in Congress can pass minimum wage mandate without 60 Senate votes.
It’s all about keeping the minimum wage bill exempt from the Senate filibuster through Reconciliation, which only requires a simple majority. Progressives want to convince everyone that the minimum wage increase qualifies as high-priority fiscal legislation to keep the government and economy afloat.
Liberals view raising the minimum wage as an issue of equality and fairness. Conservatives point to the part of the report by the Congressional Budget Office, which concluded that the nation could lose 1.4 million jobs during a time when the economy is struggling with the pandemic.