This year, Small Business Week will take place from April 30th to May 6th. Despite strong support for American small businesses, the COVID-19 pandemic invited the greatest wealth transfer from Main Street to Wall Street. 

Nevertheless, this workforce withstands these challenges and remains the lifeblood of America. To learn about its importance, let’s play this party game/icebreaker “Two Truths and a Lie.” 

A. Small businesses employ 46.4%, or 61.7 million Americans, of the private sector workforce.
B. Biden’s policies will reduce tax burdens on small businesses.
C. More women are seeking flexible work options as one-person businesses. 

A. TRUE. According to the most available Small Business Administration (SBA) data, there are currently 61.7 million American workers who make up the private sector workforce. That amounts to 46.4% of the total private sector workforce. Per the Bureau of Labor Statistics, the U.S. civilian labor force (seasonally adjusted for 2021-2023) totals 167 million individuals.

B. LIE. While the Biden administration has touted the 10.5 million Americans applying to start small businesses, their tax-and-spend policies burden private sector workers the most.

The White House’s proposed 2024 budget—estimated to cost a whopping $6.8 trillion—would incur $1.8 trillion in new taxes on small businesses if approved.

Despite claiming to reduce inflation, the deceptively named “Inflation Reduction Act”—boasting a price tag of $370 billion—will exacerbate inflationary pressures on small businesses across the country. Inflation is harming business owners in many ways. As a result, entrepreneurs are raising prices and adjusting to these pressures by taking out loans, trimming their payroll, and churning out lower-quality products and services. 

Inset in the IRA is a provision to hire an additional 87,000 Internal Revenue Service (IRS) agents under the guise of “enforcement.” But experts warn 1099 workers (independent contractors or freelancers) will be subjected to more audits than W-2 filers (traditional employees). 

The average small business owner earns about $69,000 annually. Even Treasury Secretary Janet Yellen recently conceded 90% of new audits will affect those making under $400,000. 

C. TRUE. Between 60 million and 65 million Americans—including a growing number of women—are starting one-person businesses in the freelance economy. Over half the U.S. workforce is slated to be freelance—86.5 million—by 2027. As of 2022, women comprise 52.3% of U.S. freelancers while men make up 47.7%. Since the pandemic, many women left office jobs to work remotely on their own terms and to be more fulfilled in their careers. In fact, Harvard Business Review notes independent contracting allows more women to break the so-called Glass Ceiling compared to women who work traditional 9-to-5 jobs. 

Bottom Line: 

Although confidence in small businesses remains high compared to other institutions, they will continue to face insurmountable challenges from the Biden administration’s tax-and-spending agenda.

Thus far in 2023, the U.S. economy’s gross domestic product (GDP) only grew 1.1%. Compounded by inflation woes, small businesses report inflation as the biggest challenge they’re currently facing. 

To learn more about Small Business Week, catch this IWN Webinar featuring former Small Business Administrator Linda McMahon.