The American dream often involves being your own boss and following your dreams. Biden’s policies have made that possible for record numbers of Americans.
The Center for American Progress recently took a detailed look at how and why this is happening.
Entrepreneurship, Startups, and Business Formation Are Booming Across the U.S.
Recent surges in startups and other forms of business creation are key signs of the economy’s strong recovery following the COVID-19 pandemic recession. Before the pandemic, economists and policymakers worried that a series of metrics, such as a falling share of businesses that are less than 1 year old, demonstrated a slowdown in new business creation.
Evidence since 2021 suggests that these troubling signs have reversed themselves and that we are in the midst of a startup boom. This boom in business formation could be meaningful for local economies: More new businesses can lead to more job creation, faster productivity growth, and stronger wage growth. New businesses can also increase competition and decrease corporate concentration, boosting wages and reducing prices.
What are some facts that back this up?
- Entrepreneurs filed 5.2 million “likely employer” business applications between January 2021 and December 2023, slightly more than a one-third increase over the number of applications filed between 2017 and 2019.
- The number of startups—businesses under 1 year old—surged in 2022 and 2023, surpassing pre-Great Recession levels for the first time.
- The number of business establishments grew in more than 8 in 10 counties nationwide between 2019 and 2023.
So, what does this have to do with President Biden?
This strong economic recovery—which the Biden administration’s American Rescue Plan helped deliver—has created an attractive environment to start and grow a business. The American Rescue Plan and other pandemic-era support for workers and families may have also helped launch this boom by increasing the wealth of would-be entrepreneurs—providing them the resources to start a business and reducing the financial risk of business failure.
The Biden administration has enacted a suite of policies directly targeting small-business formation and expansion, including a $10 billion American Rescue Plan investment that launched and expanded capital access programs for 100,000 small businesses, expanding and making permanent the Minority Business Development Agency, and using federal contracting and Small Business Administration tools to support small businesses.
The Inflation Reduction Act and the CHIPS and Science Act contain provisions to help small and disadvantaged businesses that will continue to spur new business creation in the country’s growing clean energy, semiconductor, and other key sectors. Indeed, some of the strongest growth in both business applications and business establishment growth has been in the STEM-heavy professional, scientific, and technical services sector.
The trend of increasing entrepreneurship has held true for every group — but is most pronounced for Black Americans, who Biden targeted in many pieces of legislation.
This surge was seen especially in ZIP codes with large Black populations, and the Black business ownership rate more than doubled between 2019 and 2022. The American Rescue Plan, the CHIPS and Science Act, and the Inflation Reduction Act also contain provisions helping small and disadvantaged businesses that could help propel this surge in business creation over the next decade.
The boom shows no signs of slowing down!
Likely-employer applications reached 450,000 in the last quarter of 2023—120,000, or 37 percent, more than in the last quarter of 2019—showing that the surge is still continuing three years after the first COVID-19 vaccines were administered. Likely-employer applications were not growing anywhere near this rate before the pandemic; they grew only 11 percent between the fourth quarter of 2015 and the fourth quarter of 2019.
The sharp uptick in likely-employer business applications is also a nationwide phenomenon: In all but one state, likely-employer business applications in the fourth quarter of 2023 were higher than in the fourth quarter of 2019. [ . . . ]
The strong economic recovery since 2021—in part a result of the American Rescue Plan—has helped deliver a surge of business application, startup, and business establishment growth throughout the country. This boom could reverse decades of stagnant business formation, generating even more job creation, productivity growth, and wage growth over the coming years.
Is there still more work to be done? 100%! Lots more work. But Biden has done so much more than many people guessed could be done. He deserves a lot of credit. AND he deserves to be re-elected.
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This is an entry in my ongoing series Boosting Biden.
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These posts are written by Goodnewsroundup (Goodie),
edited by Matilda Briggs, and supported by 2thanks and WolverineForTJatAW
as well as several other notable Kossacks!
As with all good things, it takes a village.