Nearly 5.4 Million Small Businesses Created in 2021 Roosevelt Institute: U.S. economic recovery is taking place at eight times the speed of the Great Recession.
By Main Street Sentinel Staff
Nearly 5.4 million small businesses were created in 2021, a 68 percent increase from the pre-pandemic average of 3.2 million per year.
Experts say this is in part due to the American Rescue Plan Act signed into law by President Joe Biden on March 11, 2021, a stimulus package designed to undo the damage caused during the coronavirus pandemic where 34 percent of small businesses were forced to close.
The package included nearly $416.3 billion to help small businesses recover, which employ approximately 47 percent of all U.S. workers. As a direct result of this assistance, nearly one million Americans filed applications to start new businesses in the first six months of 2021, which, according to the Economic Innovation Group, is 45 percent higher than at that point in 2009 when the economy was rebounding from the Great Recession.
The American Rescue Plan also helped restaurants and bars, which lost more than $280 billion in sales during 2020.
The legislation included $28.6 billion for the Restaurant Revitalization Fund, which, according to a November 2021 report by the U.S. Small Business Administration, supported more than 100,000 restaurants and other food and beverage businesses. $18 billion of the funds were distributed to women-owned ($7.5 billion), veteran-owned ($1 billion), and socially and economically disadvantaged-owned ($6.7 billion) small businesses.
In a January 2022 report, the National Restaurant Association estimated that this assistance help save 900,000 restaurant jobs were saved due to the initial round of Restaurant Revitalization FundRRF grants, with 96% of recipients saying the grant made it more likely that they would be able to stay in business for the duration of the pandemic. 85% said they were able to retain or hire back employees who would have otherwise been temporarily or permanently laid off.
The dramatic increase in the number of small businesses is helping fuel an economic boom, creating 6.6 million jobs in 2021, “easily the biggest single-year gain in U.S. history,” according to CNBC.
The Roosevelt Institute notes that the U.S. economic recovery is taking place at eight times the speed of the Great Recession.