Small Business DA - GDI 2024

Small Business DA – GDI 2024
Top Level
1NC Small biz DA
Small businesses are thriving – balancing inflation and consumer spending is on the rise
Sierra Sun Times ’24, March 9, “SBA Reports Small Business Confidence, Economic Optimism Rising Under Biden-Harris Administration,” accessed July 18, 2024, https://goldrushcam.com/sierrasuntimes/index.php/news/local-news/54744-sba-reports-small-business-confidence-economic-optimism-rising-under-biden-harris-administration#google_vignette
Recent reports show a surge in confidence among small business owners and consumers as inflation falls, recession fears subside, and consumer spending rises. The growth in optimism coincides with an unprecedented Small Business Boom, which has seen more than 16.5 million new small business applications filed since President Biden took office – a record level. Thanks in part to this historic surge, economic optimism among small businesses has hit a 22-year high, with a majority of business owners saying they are “highly optimistic” about the national economy.
Other key indicators include:
Roughly eight in 10 small business owners feel confident about their financial prospects, with more than half expecting profits to rise in the next six months. (PNC Financial Services Group)
85% of small businesses report being satisfied with the success of their businesses, and 86% said they achieved their 2023 business goals. (American Express)
50% of small businesses surveyed have plans to grow or expand their businesses in 2024. (American Express)
Americans’ assessment of the economy is at its highest level in more than two years. (CBS)
The Biden-Harris Administration’s strong economic track record gives business owners and consumers alike much to feel positive about. The United States has had the strongest growth since the pandemic of the world’s major economies, with the longest low unemployment streak in over 50 years, strong GDP growth, and considerable wage growth.
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Small business health is key to U.S. growth – half of American jobs and 99% of U.S. firms – worth trillions
Rebecca Leppert ’24, April 22, copy editor, “A look at small businesses in the U.S.” PEW RESEARCH CENTER, accessed July 18, 2024, https://www.pewresearch.org/short-reads/2024/04/22/a-look-at-small-businesses-in-the-us/
Most U.S. adults (86%) say small businesses have a positive effect on the way things are going in the country these days, according to a recent Pew Research Center survey. Small businesses, in fact, receive by far the most positive reviews of any of the nine U.S. institutions we asked about, outranking even the military and churches.
Despite their name, small businesses loom large in the United States. These businesses – defined here as those with 500 employees or fewer – account for 99.9% of U.S. firms, according to the Small Business Administration. While most of these 33 million firms don’t have paid employees, about 6 million of them do. They account for just under half of total private sector employment (46%).
As National Small Business Week approaches, here’s a look at small businesses in the U.S. and public attitudes about them, based on federal data and Center surveys.
Just how ‘small’ are small businesses?
[A bar chart showing that about half of small businesses in the U.S. have just 1 to 4 employees.]
Among the roughly 6 million small businesses with employees, 49% have just one to four workers, according to the latest estimates for 2021 from the Census Bureau’s Annual Business Survey (ABS). About a quarter (27%) have between five and 19 employees; 8% have 20 to 99; and just 1% have 100 to 499 workers. The remaining 14% had paid employees at some point during the year, but not during the March 12 pay period, which the ABS uses to determine employment size.
Overall, small businesses employed an estimated 56.4 million workers in 2021 and brought in over $16.2 trillion in revenue, according to ABS data. Perhaps unsurprisingly, small businesses with more employees tend to account for larger shares of overall revenue than those with fewer workers.
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Uniqueness
Small biz up
Small business is thriving and boosting broader U.S. growth
Joint Economic Committee ’24, June 13, “SMALL BUSINESS GROWTH IS BOOMING UNDER DEMOCRATS, FAR FASTER THAN GROWTH UNDER TRUMP,” accessed July 18, 2024, https://www.jec.senate.gov/public/index.cfm/democrats/2024/6/mall-business-growth-is-booming-under-democrats-far-faster-than-growth-under-trump
Small business growth drives a strong U.S. economy and provides jobs people can raise a family on
In 2023, small businesses made up 99.9% of all businesses in the United States and drove nearly 44% of all U.S. output.
Over the last 10 years small businesses have contributed to more than half of all net job growth in the United States.
While self-employment is a common reason to start a new business, the United States is also setting records for applications for likely employer businesses, i.e. the types of new businesses that are most likely to employ additional workers.
After falling between 2007 and 2019, the percent of Black families owning a business doubled between 2019 and 2022 from 4.8% to 11%. The share of new Latino small business owners has also surged. Research shows that these new business owners are especially likely to start employer businesses and create additional jobs.
Small businesses are also the backbone of thriving local economies and have been shown to create more jobs on net than big companies. Research also indicates locally-led small business growth is key to driving economic prosperity in rural communities.
By increasing rural access to broadband, Democrats are also investing in the future of rural small business and their capacity to grow their online presence.
Democrats have fueled new investment in small businesses through landmark bills and executive actions
Congressional Democrats have committed billions to directly support small business. Their actions have helped spur the economic recovery, boosted infrastructure, invested in clean energy, and bolstered American semiconductor production.
By passing the Small Business Innovation Research and Small Business Technology Transfer (SBIR and STTR) programs Extension Act of 2022, Democrats ensured that, through “America’s Seed Fund,” small businesses that are focused on innovative research and development will keep our country at the forefront of creating cutting edge technology.
Democrats are also freeing up credit for entrepreneurs across the country, targeting an issue that is vital for small businesses’ hiring and overall success.
Democratic initiatives like Smart Growth and the Rural Partners Network ensure business development is locally-led and that investments spread across the local economy.
The numbers are clear that business growth is booming under President Biden, due to the strong economic recovery and policies passed by Democrats in Congress. This positive trend will continue to support the U.S. economy at every level while creating a new generation of U.S. entrepreneurs.
Small businesses and U.S. growth are strong and rising
Megan Cerullo ’24, February 28, New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting, “Small business owners report growing optimism about the U.S. economy,” CBS NEWS, accessed July 18, 2024, https://www.cbsnews.com/news/small-business-owners-optimism-about-economy-is-high/
Small business owners are feeling better about the U.S. economy as inflation cools and recession fears subside, according to a new survey. Indeed, economic optimism among smaller employers is at a 22-year high, PNC Financial Services Group found in polling small and midsize business owners.
A majority of respondents – 55% – said they are "highly optimistic" about the national economy this year. That's up sharply from 34% last fall and 26% a year ago, according to the Pittsburgh-based bank. Roughly eight in 10 owners also expressed confidence about their own businesses' financial prospects. Over the next six months, just over half of the business owners who were surveyed think their profits will rise, while only 5% expect earnings to fall.
"The U.S. economy is doing quite well. We had strong economic growth in the second half of 2023, with consumers spending more and businesses investing. That strength is persisting into 2024," PNC Chief Economist Gus Faucher told CBS MoneyWatch.
The findings are based on a randomized phone survey of 500 small and midsize businesses, which PNC defines as having annual revenue ranging from $100,000 to $250 million, from January 2 to February 1.
As inflation slows, fewer small business owners also see a need to raise their own prices in the near term. According to PNC, 47% of the enterprises that were surveyed said they expect to increase prices over the next six months, down from 55% last fall. Of those businesses that plan to raise prices, just over 1 in 10 say they'll do so by at least 5%.
Small business optimism is on the rise – surveys prove
Kate Rogers ’24, February 22, “Economic confidence among small business owners hits highest level since Biden took office,” CNBC, accessed July 18, 2024, https://www.cnbc.com/2024/02/22/small-business-confidence-hits-highest-level-since-biden-took-office.html#:~:text=The%20Small%20Business%20Confidence%20Index,economy%2C%20even%20as%20challenges%20linger.
Even in the face of stubborn inflation, small business owners are striking a more positive tone. Optimism surrounding the economy is rising and the CNBC|SurveyMonkey Small Business Confidence Index reached its highest level since President Joe Biden took office, according to the latest quarterly data released on Thursday morning.
Twenty-eight percent of small business owners describe the current state of the economy as “excellent” or “good,” up five percentage points from the prior quarter and up from 18% year over year, according to the CNBC|SurveyMonkey Small Business Survey for Q1 2024. It’s the most optimistic respondents to the survey have been since CNBC and SurveyMonkey began asking this question in Q2 of 2022.
The Small Business Confidence Index reading of 47 out of 100 marked the highest reading since Joe Biden took office in the first quarter of 2021.
A recent string of data has found consumers and small business owners beginning to show more confidence about the economy, even as challenges linger.
“We’re kind of seeing a potential turn around the corner in terms of small business optimism,” said Sam Gutierrez, senior research scientist at SurveyMonkey, pointing to an uptick in survey responses about economic strength and the general direction in the fight against inflation after two years of stagnation in this survey data.
Favorable conditions have small businesses thriving
Joint Economic Committee ’24, June 13, “SMALL BUSINESS GROWTH IS BOOMING UNDER DEMOCRATS, FAR FASTER THAN GROWTH UNDER TRUMP,” accessed July 18, 2024, https://www.jec.senate.gov/public/index.cfm/democrats/2024/6/mall-business-growth-is-booming-under-democrats-far-faster-than-growth-under-trump
When more entrepreneurs can start and grow their businesses, it drives economic opportunity, creates local jobs, strengthens the middle class, and diversifies our economy. Democrats in Congress passed vital investments in the economic recovery and key infrastructure that laid the groundwork for a record-breaking 16 million new business applications from 2021 through 2023. This increase far outpaces business growth under the former president, or under any past Republican. Democrats’ policies are working for American small business owners across the country and the next chapter in economic opportunity is underway.
Small business entrepreneurship is thriving
From 2021 through 2023, the United States saw 16 million new business applications; more than any other three-year period in history. This stretch included an annual record of 5.5 million new businesses applications in 2023.
This growth is happening throughout the country, with business applications higher in 2023 than in 2019 and in all 50 states and the District of Columbia (see table on page 3).
For example, new business applications in New Mexico surged from about 17,500 in 2019 to approximately 34,000 in 2023, with continued growth in early 2024.
The U.S. averaged 443,302 monthly business applications though the first 3+ years of President Biden’s first term, significantly higher than the 282,362 applications under Trump during the same amount of time in office.
A recent survey of entrepreneurs found that small business owners’ outlook on the economy is at a 22-year high.
Uniqueness – goldilocks economy
U.S. economy is goldilocks
Alain Sherter ’24, February 26, covers business and economic affairs for CBSNews.com, “Economists see brighter outlook for 2024. Here's why.” CBS NEWS, accessed July 18, 2024, https://www.cbsnews.com/news/inflation-economists-brighter-outlook-federal-reserve/#
The U.S. economy is having what some experts are calling a "Goldilocks" moment.
A panel of economists expect this year to be characterized by faster growth, shrinking inflation and healthy job creation — a far cry from the widespread fears of a recession that marked 2023. The National Association for Business Economics (NABE) on Monday predicted that gross domestic product — a measure of the value of goods and services — will rise 2.2% in 2024, a significantly more bullish forecast than what the group projected only two months ago.
Inflation, which drives up the cost of groceries, rent and car insurance, among other spending categories, is expected to continue slowing this year. NABE forecasts that the Consumer Price Index — a basket of common goods and services — will decline to an annual rate of 2.4% this year, compared with 4.1% in 2023 and 8% in 2022. Another closely watched gauge used by the Federal Reserve to assess price changes, Personal Consumption Expenditures, is also expected to continue easing.
NABE predicted the Fed will start cutting its benchmark interest rate between April and June, which would lower borrowing costs for individuals and businesses.
Still, economists note that the U.S. central bank is likely to move cautiously in lowering the federal funds rate.
"Based on comments from Fed officials this week, we now expect the Fed to wait until June to begin cutting interest rates," analysts with Capital Economists said in a report. "Moreover, when it does begin to loosen policy, we suspect that the Fed will initially adopt a gradual approach — with the intention of cutting at every other meeting."
Americans' economic outlook has brightened somewhat of late. A February poll by CBS News found that people's assessments of the economy are at their highest level in more than two years, although sentiment remains negative overall.
Buoying the mood has been the red-hot stock market, with both the S&P 500 and Dow Jones Industrial Average climbing to record highs last week.
"As occurred during the second half of the 1990s, the stock market is having a significantly positive wealth effect on the economy now that the major stock market indexes are at record highs," Ed Yardeni, chief investment strategist for Yardeni Research, said in a report predicting that the economy will remain resilient.
Gregory Daco, chief economist with EY, noted that the U.S. economy is growing much faster than other developed economies in Europe and Asia. He points to the job market as a key source of strength in 2024.
"The increased value of talent post-pandemic has meant that business managers are more reluctant to let go of their prized talent pool despite cost pressures and expectations of slower final demand growth," Daco told investors in a report. "Solid employment growth, combined with robust wage growth, has translated into strong real disposable income growth, which in turn has allowed consumers to continue paying high prices for goods and services."
Uniqueness – A2 inflation
Inflation isn’t hurting small businesses enough to tank the disad
Kate Rogers ’24, February 22, “Economic confidence among small business owners hits highest level since Biden took office,” CNBC, accessed July 18, 2024, https://www.cnbc.com/2024/02/22/small-business-confidence-hits-highest-level-since-biden-took-office.html#:~:text=The%20Small%20Business%20Confidence%20Index,economy%2C%20even%20as%20challenges%20linger.
Inflation — which has proven to be stubborn based on the most recent data even as significant progress has been made in bringing prices down from a peak level — continues to weigh on owners, with nearly a third saying it is currently the biggest risk to business. That is more than double the amount who cite consumer demand, interest rates, labor shortages and supply chain disruptions as key issues.
“Inflation is still top of mind,” Gutierrez said. “But we’re seeing this cautious optimism on inflation, and costs in general.”
Confidence in the Fed to control inflation is now at 35% among small business owners, the highest it has been since the beginning of 2022. The percentage of business owners (29%) who say inflation has peaked, while it remains a minority of the survey audience, is also at its highest level since the beginning of 2022.
Patent Protection Links
Patent Protections Hurt Small Business
Patent protections put small business at a disadvantage
Small Business Technology Council, 15
[Small Business Technology Council (SBTC), January 2015, SBTC, “Patent Reform Threatens Small Business Innovation,” https://sbtc.org/wpcontent/uploads/2015/01/SBTCPatentletter2pagecondensedversion.pdf, accessed: 7-11-24, ES]
Patent protections are particularly important for innovative small businesses, which operate on much smaller margins, and often rely much more heavily on their intellectual property for revenue than large firms. According to the SBA: “Of high patenting firms (15 or more in a four‐year period), small businesses produced 16 times more patents per employee than large patenting firms. Research also shows that increasing the number of employees correlates with increased innovation while increasing sales does not.”1
The Small Business Technology Council (SBTC) believes that HR 3309 and other “patent reform” bills in the Senate will cloud patent titles, making them weaker. For small business, patents will become mostly unenforceable due to the proposed much higher upfront cost of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation. Purporting to attack predatory trolls, the bills instead attack all small companies with legitimate patent suits to protect the interests of large infringers at the expense of new business job creation. All these changes to the patent system have the collective effect of raising the cost of business for small firms, particularly those in innovative, high‐tech areas. Furthermore, these bills do not specifically define or address “trolls” or “non‐practicing entities,” but instead lump all patent holders together.
The America Invents Act requires a study be conducted by the SBA on the impacts of the new law on small business. So far, a year and half after implementation of AIA, that study has not been produced. It is important that a new round of patent reform legislation is not rushed through before careful consideration of the effects the changes AIA has already made to the patent system. To do otherwise could compound any burden felt by small businesses due to the proposed changes.
Loser Pays would be detrimental to small businesses
Small Business Technology Council, 15
[Small Business Technology Council (SBTC), January 2015, SBTC, “Patent Reform Threatens Small Business Innovation,” https://sbtc.org/wpcontent/upl

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