The National Federation of Independent Business (NFIB) small business optimism index plummeted in January 2021. The survey found that the number of small business owners expecting an improvement over the next six months dropped to a negative 23%. And over the past four months, the number of owners anticipating better business conditions declined by 55 points.
There are several reasons for this pessimism. First, small businesses have been targeted by government-mandated closures while many of their larger competitors never had to shut down for a single day. These closures or reductions in operating capacity had real consequences. A February Rent Poll conducted by Alignable found 38% of small firms could not pay their rent for the month. This figure is higher for minority-owned small companies at 58%. Another reason is legislation that negatively impacts small businesses. One is the passage of the PROAct, the anti-gig and independent contractor bill. Another is the proposal to raise the federal minimum wage to more than twice the current level.