According to a recent industry report, at least 13.9 million small businesses in the United States are at serious risk of closure by April 1.
Of the nation’s 31.7 million small businesses, that’s forty four percent that may be forced to shut their doors. These small businesses expect to earn less revenue than their owners estimate is needed to stay open, BizPacReview reports.
“Customer confidence in their future cash flow is low right now,” a surveyed small business owner said, according to Alignable, a small business group. “And so discretionary spending, which our business is based on, is significantly restricted. We need customer confidence to elevate to bring them back and make them feel comfortable spending their money.”
Another small business owner opened up about his struggles.
“My income has dropped to zero,” the owner said.
The coronavirus pandemic and economic shut downs hit small businesses particularly hard. As of February 10, small business revenue plummeted 33.1 percent compared to January 2020.
Over the last year, about 30 percent of American small businesses were forced to shut down, a detrimental result of the restrictions and shut downs.
While millions of these small businesses, the backbone of America, had no choice but to permanently close, companies like Walmart and Amazon were able to generate record revenues in 2020. Per BizPacReview, 45 out of the 50 most valuable public corporations actually profited from the pandemic.
“These are times when the strong can get stronger,” Nike Chief Executive Officer John Donahoe said in a September conference call.
And, the struggling will get weaker.
Meanwhile, as part of Joe Biden’s stimulus package, progressive democrats want to raise the minimum wage to $15 per hour, which will only further destroy small businesses.
But, they don’t seem to care.
California rep. Ro Khanna, when asked if he thinks small businesses can handle a $15 minimum wage, said “successful” businesses should be able to pay their workers fair wages.
“We don’t want low-wage businesses. Most successful small businesses can pay a fair wage. If you look at the minimum wage, it increased with worker productivity until 1968, and that relationship was severed. If workers were actually getting paid for the value they were creating, it would be up to $23,” he said.
Instead of worrying about raising the minimum wage knowing it will have detrimental effects on small businesses, lawmakers should focus on providing needed assistance to struggling businesses so they aren’t forced to permanently shut down.