RALEIGH, N.C. Local Charlotte — How good has the Biden Administration been for small businesses in North Carolina and beyond?
For the past few weeks, the administration has repeatedly brought up a big number and made a strong claim about just how much those businesses have boomed over the past two years.
Vice President Kamala Harris even made reference to them during her visit earlier this week to Raleigh.
THE CLAIMS: “We have, over the last two years, grown and started, as a country, more small businesses in the last two years than any other two years in the history of the country. That’s the environment,” Harris said in Raleigh earlier this week.
In response, North Carolina Republicans issued a statement saying “it’s important to note that the Biden administration has ushered in one of the most difficult economies ever for small business owners here in NC and around the nation.”
THE FACTS: Harris’ statement centered around a number that the Biden Administration has been trumpeting for weeks — that nearly 10.5 million small business applications have been filed during the last two years.
The number does add up, and economist Mike Walden says it is valid.
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A total of 10,475,873 businesses were formed in the U.S. in 2021 and 2022, according to data from the U.S. Census Bureau that dates to 2004. That is the highest two-year total during that time period.
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The trend also applies to the state level. Those data show more than 337,000 of those applications were filed in North Carolina in 2021 and 2022, also the highest two-year total in that time frame.
Harris also pointed out “some of the lowest unemployment rates,” and factually, that also checks out: The national unemployment rate of 3.5 percent in January matched the lowest level in more than half a century.
At the state level, it fell to 3.9 percent in December in North Carolina
But is the Biden Administration justified in taking credit for them? Or, conversely, does the administration deserve the blame being lobbed its way from the state Republicans’ criticism?
A lot has happened in the last few years — from the COVID-19 pandemic, to the recession that formed in its wake.
Walden says the administration deserves at least part of the credit for that boom in small businesses because of the assistance made available to them through Biden’s American Rescue Plan.
“I think we would have had an uptick in small business growth,” Walden said. “Clearly, though, not as great as the uptick that we’ve had due to the fact that the Biden Administration has more money funding small businesses.”
He says the $400 billion dollars of those small business loans is “part of the reason.”
But there also are other factors at play.
Historically, the ends of recessions usually lead to increases in the numbers of small businesses because “people come out of recessions often times being very entrepreneurial,” Walden said.
“In order to survive during a recession, a business, people, entrepreneurs have to figure out new ways of doing things,” he said. “And they often will carry that with them after the recession.”
Walden added that “COVID changed a lot of things in ways that we never expected.”
And that leads directly to the GOP’s claim that the economy for small businesses is “one of the most difficult … ever.”
Walden says that appears to be focused on inflation — which, while still high, has come down from record highs in the summer, falling for the sixth straight month to 6.5 percent in December — and says it is the result of two things that are both independent of whether Biden or Donald Trump was president.
“I’m not pointing fingers, really, at any administration,” Walden said.
Instead he points to the massive sums of money injected into the economy because “we didn’t know where COVID was going to take us” and the lingering supply chain issues.
“And so we came out of the COVID recession and ended the COVID recovery with households having tons of money to spend that they really couldn’t spend during COVID” because the supply wasn’t there, Walden said.
“So I think those two things worked together to cause there to be an outright explosion in inflation,” he said.
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