As InsiderAdvantage has previously reported, the National Federation of Independent Business has been tracking the impact of COVID-19 on the country’s small businesses and the success – or lack thereof – of Washington’s recovery and relief bills since the start of the pandemic.
The 15th edition of the survey was released on Thursday, with results reflecting the passage of the Consolidated Appropriations Act (CAA) of 2021, signed into law by President Trump in late December. The CAA made some modifications to the Paycheck Protection Program (PPP) designed to keep workers in their places of employment despite a lack of demand, as well as an Employee Retention Tax Credit (ERTC).
One of the main findings from the latest survey is just 15% of business owners are now reporting they will have to shutter soon if economic conditions do not improve, down from 25% in December. Additionally, new measures from the President Biden administration, notably the minimum wage increase, are now being considered by small business owners.
“The reopening of the Paycheck Protection Program is likely a main factor in the decrease of those anticipating having to close their doors soon but still, the economic recovery remains uneven for small businesses,” said Holly Wade, Executive Director of NFIB’s Research Center. “Fortunately, more businesses are reporting stronger sales and those still negatively impacted by state and local restrictions are receiving additional financial help.”
Besides the relatively good news about possible business closures, the survey also found that nearly two-thirds (63%) of PPP borrowers have now applied for loan forgiveness. Of those, 62% have received confirmation that applications for forgiveness have been approved. Regarding the ERTC, awareness of the program is still limited – perhaps due to focus in the broader media on the PPP aspect of the recent relief bill. Less than 40% of survey respondents reported familiarity with the program and only 8% of them utilized the ERTC in 2020.
As for the minimum wage, 74% of small employers report that the proposal would negatively impact their business. Four out of five small employers report that they have no full-time or part-time employees currently paid the minimum wage but two-thirds of them pay one or more employees less than $15 per hour.
NFIB Vice President of Federal Government Relations Kevin Kuhlman warned about the impact of the minimum wage hike before President Biden had assumed the presidency earlier in January.
“As President-elect Biden said, small businesses are the economic engine of the country and the glue that holds communities together. They employ nearly half of the private sector workforce and are responsible for half of our GDP,” said Kuhlman. “More than doubling the minimum wage to $15 dollars per hour, expanding paid leave mandates, and creating new federal enforcement actions on small businesses will make it even harder for Main Street to survive. Big business may be fine with a dramatic increase of the federal minimum wage and paid leave mandates as they’ve been thriving during the pandemic, but small businesses know these policies will make it even harder for them to compete against their larger competitors.”
