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Election 2020 Outlook: Aid Vital for Small Businesses

November 1, 2020

Crain’s Detroit Business

By Jason Davis

Small businesses dealing with a variety of challenges are anxiously awaiting the results of the election.

Small businesses in need of additional financial aid during the coronavirus recession and facing labor shortages during the pandemic are anxiously awaiting Tuesday’s presidential election results.

Officials believe the assistance is key no matter who wins.

“Which outcome best gets you to that solution is a little bit of an unknown, frankly,” said Detroit Regional Chamber of Commerce President and CEO Sandy Baruah. “We know there’s been some discussion on aid for small businesses. The outcome of the U.S. Senate races could be impactful. If Trump does lose, what will his interest be in continuing to pursue legislation to help small businesses? Because at the end of the day, if the House and Senate agree to something, the president still has to sign it.”

Small Business Association of Michigan President Brian Calley said the notion of returning to widespread business shutdowns seen earlier in the pandemic is weighing heavily on the minds of small business owners.

“… especially given that workplaces have not proven to be significant sources of spread,” said Calley, who served as Michigan’s lieutenant governor 2011-18. “In fact, for many people, the workplace might be the safest place, where rules and protocols are followed. It would be our hope that pandemic responses be precise in how we control the pandemic.”

Baruah, who previously served as administrator for the U.S. Small Business Administration, said there are three major issues facing small businesses that could be impacted by the election: Having cash on hand and assistance to push through the recession is the top issue, Baruah said. That’s followed by how COVID-19 is contained to the point it allows customer traffic to return to normal, as well as issues related to taxation and regulation.

“If Trump wins, things could be quite unsettled. It could be a pretty unproductive time,” Baruah said. “But if the Democrats sweep — take the Senate and Biden takes the presidency — I think we could see a small business (stimulus) package fairly rapidly. If Trump wins and Republicans keep the Senate, then there might be reason to believe the package may not matter” to them.

Calley noted research that shows there are thousands of jobs available but a severe shortage of workers. He said there remains a high degree of concern that a government response to the pandemic recession could exacerbate that shortage if stimulus payments and unemployment benefits exceed the pay of available jobs.

SBAM is looking for policies that allow all businesses to remain open with proper safety protocols, Calley said. And when infections are on the rise, the response should be directed at specific activities and places most responsible or vulnerable, rather than across the entire economy.

Baruah said the Detroit chamber has long advocated for a relief package that would extend and/or modify assistance programs that would aid small businesses, local and state governments and schools. Local and state governments should be able to provide essential services such as trash pickup, Baruah said, and schools should be able to open and operate safely “because in-class learning is better for educational outcomes.”

“We’ve also advocated for smart, balanced efforts on virus mitigation,” he said. “We think it makes sense that the level of virus control directly relates to the economy. The better we control the virus, the better the economy will be.”

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