Editor’s note: This piece has been updated to more accurately reflect new business formation and minority-owned business growth over the past few years.
A recent survey shows that President Biden’s approval among small business owners is at a “new low,” with only 30 percent of the 2,000 business owners polled saying they approved of his policies, and 56 percent saying they “strongly disapprove” of the way he’s been handling his presidency.
Some say it’s because of high inflation, regulations and, of course, his age. And yes, these are some of the factors. But there’s another more significant reason why we don’t approve of the president: his credibility.
Even over the past few months, Biden has made statements that either significantly stretch the truth or are simply just not truthful. Here are some of the things he — and his administration — have said, and why they’re misleading.
“All told, we’ve added 13.5 million jobs since I took office — around 800,000 of them manufacturing jobs. We created more jobs in two years than any president ever created in a four-year — single four-year term. We did it in two years.”
Any business owner understands the falsehood in this statement. These jobs weren’t “created.” The economy lost tens of millions of jobs during the pandemic and the jobs “created” by the president since he took office were merely a recovery of already existing jobs as people went back to work.
“When the Inflation Reduction Act was passed a year ago today inflation was at 8.3 percent. It’s now down to 3.2 percent, and it’s going to go lower.”
True, the rate of inflation has been declining. However, inflation is still significantly more that it was when the president took office and, overall, small businesses (and consumers) are struggling with prices of core materials from industrial chemicals to HVAC equipment to utilities. Also, interest rates are anywhere from ten to forty percent higher than they were just two years ago.
“The White House will invest $50 million of American Rescue Plan funds in over 10,000 small businesses. The Administration will also issue $50 billion worth of small business loans this year, including large increases for underserved businesses.”
This statement is partly true, but it’s not all thanks to the president. This money comes from the State Small Business Credit Initiative, which was actually established in 2010 for $1 billion and then reauthorized in 2021 for $10 billion as a response to Covid and under the American Rescue Plan Act. The reauthorization effort goes back well before Biden took office; he is merely overseeing the distribution of funds. The loan numbers are not actual issuances but rather mostly guarantees of loans made by banks and backed by the Small Business Administration.
“On Thanksgiving two years ago, 100 container ships were waiting to dock at U.S. ports. This year, there were less than 10. So, as families start their holiday shopping, shelves are stocked. And that’s no accident — it comes down to supply chains.”
The Biden administration played a very small role in unravelling the supply chain mess that was created by the pandemic. Most of these issues resolved themselves as shipyards got back to normal and a worldwide economic slowdown, mostly in China, gave shippers the chance to catch up.
“On Small Business Saturday, the Biden-Harris Administration celebrates the hardworking Americans who run our small businesses and keep our economy moving. We’re committed to helping them grow and succeed.”
Since the president took office, his administration has passed or proposed rules to increase minimum and overtime wages, reclassify more independent contractors as employees, make it easier for unions to organize, mandate minimum wages and paid time off for government contractors and make it easier for employees to sue employers for their colleagues’ behavior both in and out of the office. All of these regulations — and countless others expanding the reach of government agencies from environmental to agriculture to safety — place hurdles in the way of small businesses growing and succeeding.
The last two years have been “the greatest for small business.”
Unfortunately, most small business owners don’t agree with this either. The National Federation of Independent Businesses reported that small business sentiment registered its 22nd consecutive month below its 50-year historical average, with respondents overall saying they are “not growing their inventories as labor and energy costs are not falling, making it a gloomy outlook for the remainder of the year.”
“Entrepreneurs of color are particularly benefiting from the Biden-Harris Administration’s increased lending and investments in small businesses. Data from the Federal Reserve’s Survey of Consumer Finances shows that between 2019 and 2022, the share of families owning a business increased by 9%, with particularly large increases among Black and Hispanic households. The percent of Black households owning a business during this same period more than doubled — after falling between 2007 and 2019.”
The numbers have been rising, true. But these numbers began their steep rise under the Trump administration and continued through 2021, long before any of President Biden’s policies could have an impact. Much of the increase is also due to Covid funding for minority-owned businesses passed (and initiated) before President Biden took office. Again, give credit where credit’s due, and not much of this growth is due to the president’s policies.
“There were a record 14.6 million applications filed to start businesses under the Biden administration.”
In 2020, there was a significant surge in new business formation applications in the United States. The data from the U.S. Census Bureau shows that over 4.3 million new business applications were filed that year, representing a more than 24 percent increase compared to previous years. In 2021, there were nearly 5.4 million new business formation applications filed in the U.S., according to the U.S. Census Bureau, mostly a carryover from the pandemic. In 2022, the number then dropped to around 5.0 to 5.1 million. The number of new business formations through October, annualized, are around the same number.
New business formations began their explosion during the Trump administration and continued throughout 2021. These new startups are not due to the president’s policies but from a major shift in the workplace and higher inflation. More people working from home has resulted in a jump in freelancers. Inflation has caused more workers to seek side gigs.
Ask any manager and they’ll tell you that everything about running a business depends on trust. When you don’t trust someone, you’re less likely to do business with that person. This is President Biden’s core problem with small business owners. He makes misleading and inaccurate statements.
We don’t trust him. Can you blame us?
Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.