At the end of October 2020, third-quarter economic growth increased by a record 33.1 percent as American small businesses reopened their doors and workers returned to their desks and stations. The nation was on the right path to return to its before Covid economic dynamism where everyone who wants a good job can get one — the birthright of all Americans.
Yet we still have a ways to go before we have recovered from the Covid-19 economic crisis. How can the country turbocharge the economy so that economic opportunities return to and surpass the era before Covid-19?
By promoting entrepreneurship, which creates jobs, higher wages, economic growth, and the products and services that make the U.S. the nation with the highest living standards in the world. Like alchemists, entrepreneurs turn basic natural materials into something golden — namely, goods and services that people value. At a macro level, this process creates countless economic opportunities.
According to the Kauffman Foundation, U.S. entrepreneurship was firing on all cylinders in 2019. Americans were choosing to open small businesses at historic rates that were significantly higher than just a few years before. I saw this entrepreneurship first-hand at my business. Thanks to the pro-entrepreneurship climate, I was able to expand, hire, and raise wages, benefitting my workers and the local community.
The benefits of this entrepreneurship trickled down to all Americans. The Census Bureau recently reported that in 2019 median incomes grew at the historic rate of 6.8 percent. So much for the mantra of “stagnant wage growth.” Wages grew even faster for minorities and low-income workers, proving once again that an entrepreneurial climate helps those with the least opportunities the most. Meanwhile, the poverty rate fell to a 60-year low.
So how can we return to this entrepreneurial climate before Covid? By pursuing public policy conducive to entrepreneurship, including tax cuts, deregulation, and access to credit.
The last few years have seen a lot of this entrepreneurship fuel. In 2017, the biggest small business tax cuts in history were passed, giving entrepreneurs like me more funds to invest in our businesses. Small businesses should be allowed to reinvest their earnings back into their businesses to create jobs and better products and services. The tax cuts have allowed us to do that.
The recent reduction of burdensome regulations such as counterproductive and byzantine labor law mandates regarding employee classification allows entrepreneurs to focus on their work and their employees, not paperwork.
And eliminating the worst aspects of the Dodd-Frank financial reforms allowed small businesses to find more funding opportunities to get their ideas off the ground. This access to credit stands to especially help women and minorities, who — as Kauffman Foundation research indicates — have the least access to credit.
And how can we enact more of these pro-entrepreneurship reforms to buoy our economy back to its recent heights? By electing political candidates who make a commitment to these entrepreneurship principles. Politicians often have difficulty understanding the needs of entrepreneurs because they have never worked in the private sector, let alone ran a business. Voters should look to support political candidates with business experience. These candidates understand how public policy affects paychecks. They can foster the entrepreneurship climate that’s needed to return the U.S. economy to its former glory.
In other words, a strong economy is a simple formula: Greater entrepreneurship, which is created by pro-entrepreneurship public policies, which is created by electing pro-entrepreneurship politicians. Make no mistake: The success of the U.S. over the next few years depends on how well it follows this formula for success.
