Vice President Kamala Harris, from left, U.S. President Joe Biden and Senate Majority Leader Chuck Schumer, a Democrat from New York, wear protective masks while meeting with Democratic senators in the Oval Office of the White House in Washington, on Wednesday, Feb. 3, 2021 to discuss Covid-19 stimulus relief.
Stefani Reynolds | Bloomberg | Getty Images
America’s small business owners have been hit hard by the Covid-19 pandemic, and despite two rounds of federal loan programs targeted at aiding smaller employers, a majority on Main Street are still calling for more help.
Sixty-three percent of small business owners support the $1.9 trillion Covid relief package currently being pushed by President Joe Biden’s administration and being debated in Congress, according to the latest quarterly CNBC|SurveyMonkey Small Business Survey.
That includes 46% of Republican small business owners showing support for the new Democratic administration’s first major legislative proposal. In fact, Biden’s relief package has much more support from Republicans than Biden has himself. Only 14% of Republican small business owners say they approve of how Biden is handling his job as president.
Support for more relief comes as confidence among small business owners plummeted to a fresh all-time low since the quarterly tracking survey began in 2017. The Small Business Confidence Index fell from 48 out of a possible 100 in the fourth quarter last year to 43 this quarter. Additionally, the number of small business owners saying they believe they can continue operating for more than a year under current business conditions fell from 67% in the fourth quarter to 55%.
The Q1 2021 CNBC|SurveyMonkey Small Business Survey was conducted January 25-January 31 using the SurveyMonkey platform and included responses from 2,111 small business owners across the country.
The debate over more federal relief has become more partisan among small business owners now that former President Donald Trump has left office. In the fourth quarter, a whopping 83% of small business owners expressed support for what became a $900 billion package passed by Congress and signed by Trump in late December.
“There are more Republicans than Democrats who own small businesses,” said SurveyMonkey research science manager Laura Wronski. “When we fielded the last survey it was after the election, but it was still in this interim period where … there was still maybe a little bit of doubt in people’s minds [about the outcome]. I think people’s perceptions may have hardened, whereas in December they were a little bit more up for grabs. Because this is the opening pitch from the Biden administration, it becomes easier to say yes or no.”
Support for the latest package may also have waned, Wronski says, because of the possibility it will include an increase in the federal minimum wage, a measure that is typically unpopular among business owners. The survey found 54% of small business owners oppose raising the federal minimum wage to $15/hour, while 44% support the increase.
Steep decline in Main Street business outlook
Overall, small business confidence was hit by a steep decline in the number of small business owners saying overall business conditions are “good” (from 39% in the fourth quarter of 2020, to 29% this quarter), as well as large increases in the number of small business owners who expect potential changes in tax, trade, regulatory, and even immigration policy in the coming year to have a negative impact on their businesses — all largely a result of a “crash” in confidence among Republican small business owners.
Wronski noted that a year ago, just 17% of Republicans said they expected government regulations to have a negative impact on their business. This quarter, that number is 82%, essentially more than a quadrupling year over year. Meanwhile, in Q1 of 2020, 40% of Democrats said they expect changes in regulation would have a negative impact on their businesses, and this quarter that number dropped down to 12%. “That’s a good example of how Democrats’ increase in confidence isn’t able to offset Republicans’ decrease in confidence. The magnitude is just so different between the two groups in terms of how much their perceptions shifted year over year,” she said.
Confidence among Republican small business owners has completely collapsed since Trump lost the 2020 election to Biden. The small business confidence index for Republicans is 32, which is 25 points lower than it was in the third quarter of 2020, the last survey taken before the election. It’s also 9 points lower than the lowest confidence reading for Democrat small business owners during Donald Trump’s presidency.
Conversely, confidence among small business owners who identify as Democrats has risen to 63, up 17 points from the pre-election survey.