Small Businesses Support Enhanced Unemployment Benefits to Drive Consumer Demand

Statement by Anne Zimmerman, Co-chair of Small Business for America’s Future and a small business CPA, about Senate Republicans’ $1 trillion relief package released today

Washington, D.C., July 27, 2020—It’s dismaying that Senate Republicans are opening their negotiations for the next Covid-19 relief package, the HEALS Act, with a proposal that dramatically slashes unemployment benefits for laid-off workers–a move small business owners, who need customers with money in their pockets, do not support.

A recent national survey of more than 1,500 small businesses in the Small Business for America’s Future network found that 56% support extending enhanced unemployment benefits, 56% are concerned that letting them expire will harm consumer spending, and just 20% say employees are not returning to work because they make more money on unemployment.

The narrative that people are not returning to work because they are earning more with unemployment benefits is simply not borne out by our survey findings. To the contrary, entrepreneurs say that taking money away from millions of unemployed workers will hurt their business. Small businesses already are facing decreased consumer demand due to Covid-19 and shutdowns are again looming. Taking money out of the pockets of their customers will just compound the economic pain Main Street businesses are feeling. The JPMorgan Chase Institute found that the enhanced unemployment benefits led to higher consumption nationally for those receiving unemployment benefits. Our small businesses cannot afford to let that go away.

The proposal also allows select small businesses to take a second Paycheck Protection Program loan if they can prove the need. But with 80% of small business owners in our survey saying they expect business to be disrupted for the rest of 2020 if not longer, it is not enough. Small business owners need no-strings-attached grants and a coordinated national virus containment and reopening plan to survive. 

The administration’s failure to lead on containing the virus–bungling previous small business relief packages and politicizing the wearing of masks–have put millions of small business owners and their employees at risk. We must not continue down this destructive path. We need legislation that puts money into the hands of people who will spend it at local small businesses. The future of our Main Street economies depend on it.