Small biz needs a lifeline
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Illustration: Aïda Amer/Axios
New ADP data showed the U.S. private sector created nearly 250,000 new jobs last month, but employers with fewer than 50 workers actually shed jobs, underscoring the challenges facing small businesses as growth becomes less certain.
Why it matters: With rates and inflation on the rise, the U.S. still has high class problems, like strong demand keeping the labor market as tight as a drum. And it’s small business week, which gives us the opportunity to spotlight a sector that’s been walloped by COVID and soaring prices, plus supply and worker shortages that have yet to let up.
- For all the focus on big companies, small businesses account for over 40% of U.S. economic activity, according to SBA data.
State of play: While big employers are falling all over themselves to offer higher pay and better benefits, small businesses have limited flexibility to do the same.
- “It’s so easy for Amazon and Costco to pay their employees a minimum wage of $20 or so but very difficult for small business,” veteran market watcher Peter Boockvar wrote on Wednesday.
Zoom out: According to the latest NFIB’s Small Business survey, owners turned more pessimistic in March, and cited inflation as “the single most important problem” they face.
Driving the news: This week, The U.S. Chamber of Commerce unveiled a Small Business ‘Bill of Rights, calling on Congress to embrace “free enterprise principles” to help small biz “grow and thrive” as the economy enters uncharted waters. But some think they need more than that.
- Small businesses “need government to stop treating them as non-essential entities,” Carol Roth, a former banker and author of “The War on Small Business,” tells Axios.
- “They should receive the same perks and benefits that big businesses do (giving a tax break for an Amazon HQ? What about your local pizzeria?),” she said in an email. “They also need to be considered when rules and regulations put them at a distinct disadvantage to their larger competitors.”
