Last year’s COVID-19 lockdowns resulted in a massive transfer of wealth from this nation’s small businesses to mega-corporations.
In the U.S., as of June 2, the number of small businesses open dropped 39% compared to January 2020, according to newly released economic data compiled by Harvard and Brown Universities. More than half of the businesses in the leisure and hospitality industry were destroyed.
Nearly half of Black small businesses had been wiped out by the end of April of last year, according to a report from the New York Fed. Yelp’s Local Economic Impact Report found about 100,000 businesses listed on Yelp had closed permanently due to the pandemic, an average of more than 500 a day.
America’s second-largest source of private employment, the restaurant industry, has also been ravaged. According to the National Restaurant Association, 110,000 restaurants have closed their doors permanently, and another half a million are “in an unprecedented economic decline.”
Meanwhile, national chains thrived. Chipotle, McDonalds and Papa Johns were able to record sales growth over the past year and were even able to give out year-end bonuses to their frontline workers. Big box retailers like Target, Walmart and e-commerce behemoth Amazon also scored record profits, with their stocks soaring.
Yet, small businesses are the backbone of the American economy. Almost half of this country’s total workforce is employed by small businesses, which generates 53% of all U.S. sales. There will be no economic recovery, without small businesses leading the way.
Even now, as the country starts to reopen, the headwind against small business is strong. Many can’t operate at 100% capacity because they simply can’t find the workers. According to the National Federation of Independent Business (NFIB), nearly half of businesses report having job openings they couldn’t fill — a record high. Most can’t compete with the generous unemployment benefits being doled out by the Biden administration, and others don’t have the margins to be able to afford to pay their workers more than minimum wage.
The Paycheck Protection Program loans helped stave off bankruptcy for many businesses, but the best stimulus of all is customers. Without employees to service those customers, the harder the economic recovery will be. Not only are business owners competing with shops across the street, but they’re now competing against the federal government.
If there’s one thing we’ve learned from the pandemic it’s that lockdowns are disastrous pandemic policy that should never be repeated. No scientific study has been produced that proves they slowed down the virus’ spread, and the economic reverberations from them will be felt for years to come.
Lockdowns were merely hysterical reactions by many politicians motivated out of fear. Fear that unreasonably killed many hard-earned, blue-collar American livelihoods.