Photo by Edwin Hooper on Unsplash

Introduction

Since the onset of the COVID-19 pandemic, small businesses have experienced a renaissance as catalysts for job growth in the US economy. Historically faced with challenges, these enterprises have surged in their role as economic drivers post-2020. The Small Business Administration (SBA) defines small businesses as independent entities with fewer than 500 employees, which make up 99.9% of all businesses in the country. As of July 2024, there are 34.8 million small businesses, employing 59.0 million people and responsible for 61.1% of overall job growth since 1995.

New business applications soared to record levels during the pandemic, peaking at 5.5 million in 2023. Despite challenges like inflation, applications remain higher than pre-pandemic levels, highlighting the resilience of small businesses and their lasting impact on the economy.

Conservative Perspective

From a conservative viewpoint, small businesses epitomize the principles of free market capitalism and individual entrepreneurship. They are celebrated for their ability to determine economic success without reliance on government intervention. Conservatives argue that these businesses reduce dependence on federal programs by offering employment opportunities and fostering self-reliance. Small businesses bring diversity into the marketplace, creating competition that benefits consumers.

Conservatives emphasize reducing regulatory burdens and providing tax incentives to allow small businesses to thrive. They advocate for policies that support the entrepreneurial spirit while reducing bureaucracy and government oversight, contending that this approach will enable small businesses to contribute even more significantly to the nation’s economy.

Liberal Perspective

Liberals recognize the pivotal role of small businesses in enhancing economic diversity and driving innovation. They see government support as essential in leveling the playing field for small enterprises, especially those owned by underrepresented demographics. With women owning 39.4% and Black entrepreneurs 11% of these businesses, liberals argue that targeted support can address social and economic disparities.

Liberal perspectives often endorse programs like the Paycheck Protection Program initiated during the pandemic, which helped sustain many small enterprises. They advocate for policies that enhance access to capital, training, and resources, ensuring that small businesses can compete against larger corporations thereby sustaining economic equity and promoting inclusive growth.

Conclusion

Small businesses are undeniably a cornerstone of the US economy, having assumed an even greater role in economic recovery and growth post-pandemic. While perspectives on the best way to support them differ, both conservatives and liberals agree on their importance in job creation and economic dynamism. Moving forward, fostering a supportive environment that includes input from diverse perspectives may empower these businesses to continue their critical role in economic development.