During the State of the Union speech Tuesday, President Biden spoke about the historic progress the country has made in bringing the economy back from a pandemic that put millions out of work and shuttered shops on Main Streets across the country. While the economy remains a work in progress, it is worth pausing to reflect on how far we’ve come and how we got here. Perhaps in doing so, we can uncover some lessons on how to accomplish the work that remains to be done.
Two years ago, the country faced generational economic challenges. Since then:
- We’ve seen the strongest two years of new small business applications in American history
- More than 12 million jobs have been created, including over 750,000 manufacturing jobs
- Unemployment is at 3.4%, the lowest level in 53 years
- Annual inflation is falling, and real wages are rising
- GDP grew at 2.9% last quarter
Lesson 1: Center Small Business In Recovery Efforts
Here’s a truly stunning stat: Small companies have been responsible for all of the net job growth in the U.S. since the onset of the Covid-19 pandemic and account for almost four out of five available jobs in today’s booming job market, according to a new Wall Street Journal and Jefferies analysis.
That could be a harbinger of better things to come because historically, small business strength is a good sign for the country’s economic prospects. It was not all that long ago that small businesses led the way out of the Great Recession by creating two-thirds of all new jobs. It’s also a validation of economic policies that place a heavy emphasis on small business. The American Rescue Plan, the Inflation Reduction Act, the CHIPS Act, and the Bipartisan Infrastructure Law all create opportunities and provide support for small businesses as they navigate a bumpy economic landscape. When small businesses thrive, we all prosper.
Lesson 2: Work Together
Another important lesson is what can be accomplished through cooperation. Much of that legislation was passed with bipartisan support—a rarity in the Capitol for years. If we are going to build on this tremendous progress, our leaders in Washington must continue to work together to find solutions that advance economic growth and opportunity.
Yet, while we saw much progress in the last Congress, some in the new Congress want to return to the politics of division—to the detriment of many.
Stated goals by some in Congress to cut the IRS would reduce tax enforcement capabilities and take away resources the agency needs to get modern equipment and make the agency more user-friendly. A proposal to replace the tax code with a 30% sales tax would raise the tax burden on working class families. And defaulting on the federal debt would be a devastating setback to our economic gains. For the sake of a country and economy battered by a once-in-a-lifetime event, we must avoid the pull of partisanship and continue to focus on creating an economy that works for everyone.
Lesson Three: A Strong Democracy Is Good For Business
Shocked by the Capitol Insurrection, business leaders across the country have raised their voices in support of strengthening our democracy over the past two years. Business owners know that the United States built the most powerful economy in the world in no small part due to the stability of our government and the peaceful transfer of power we have enjoyed for generations.
Research from the Business & Democracy Initiative shows that 85% of business leaders believe capitalism in the U.S. depends upon a well-functioning democracy, and for good reason. Unstable governments are considered likely to interfere in free markets and to be generally unsafe global investments, which plays havoc with the credit markets businesses depend on to fuel growth. Thanks to the alarms sounded by the business community and others, voters weighed in at the ballot box during the midterm elections and elected politicians who took threats to democracy seriously and vowed to uphold election results. And President Biden signed the bipartisan Electoral Count Reform Act into law, strengthening the electoral process that the economy depends on. Building on that important federal action to modernize the presidential election process, business leaders must also show up at the state level to safeguard our democratic institutions—and to push back on efforts by state legislatures to limit access to the vote.
State level elections between now and 2024 will also play a huge role in determining the resilience of our democratic institutions, like the upcoming election for an open Wisconsin Supreme Court seat that can tip the balance from anti-democratic decisions, to upholding and advancing democracy—from fair maps, to expanding voting access in the battleground state.
Lesson Four: Implement Legislation To Make Sure It Works for Everyone
In the last few years, we’ve seen what can be accomplished when there is the will to focus on the needs of business owners and workers. And while we have come a long way, there is plenty of work left to do, so let’s continue to push. As we rebuild the economy, we need to make sure that it provides opportunities for everyone. The economy is strongest when it is inclusive and built from the bottom up and the middle out. The legislative accomplishments of the last two years provide us with the tools we need to do just that.
The implementation of the Bipartisan Infrastructure Law, CHIPS Act, Inflation Reduction Act, and the American Rescue Plan, all of which will invest billions of dollars across the country, provide a real opportunity for business and the private sector to work together and to engage with mayors, governors, and communities of color to build an inclusive, equitable, and resilient economy for all. We must seize it.
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