One year into the COVID-19 pandemic, Wisconsin’s economy stands at a crossroads between the depths of recession and a return to healthy growth. We need to seize this opportunity for economic recovery by accelerating support for a cornerstone of our prosperity: small businesses.
Wisconsin’s small businesses, numbering nearly half a million enterprises, are vital to the health of our state. Yet they were crushed by the pandemic, with industries like retail, leisure and restaurants in the direct line of fire. Many lacked the financing to get them through lean times and had fewer financial reserves to start with. Overall, the number of small businesses plunged a staggering 29%, killing the livelihood for tens of thousands of Wisconsinites.
These closings have had an especially significant impact on communities of color. We know that employees of these businesses — who often are Black, Latino, or women and are earning low wages — make up a huge share of the 230,000 Wisconsin workers who lost their jobs and have not returned to the workforce. Longstanding structural issues of racial and economic inequities placed additional barriers to many from the start. The types of businesses that people of color own and work in made them further vulnerable. More than half of the Black-owned businesses in Wisconsin, for example, are in the arts, accommodations and food service, and retail sectors — all of which were among the hardest hit.
As I testified last week at the Assembly Committee on Small Business Development, the Wisconsin Economic Development Corporation made an unprecedented effort during the pandemic to alleviate those tragic results. Last year, we provided nearly $245 million in federal CARES Act assistance to more than 60,000 small businesses through the "We’re All In" grants program. By comparison, WEDC typically makes about 300 financial awards.
Federal relief serves as a critical down payment on our economic recovery, but we need to maintain the momentum of those programs with new resources and new initiatives.
Some of our ideas are already contained in Gov. Tony Evers’ budget, which allocates $200 million for WEDC to assist small businesses. The governor also earmarks $10 million to help diverse businesses, and $8 million to support our community partners in economic development. Each of these proposals offers the opportunity to leverage our assets in Wisconsin and invest in the future with programs such as helping to connect employers with qualified employees and provide capital to entrepreneurs.
The budget also provides a $100 million venture capital fund that will allow us to invest in the pipeline of new ideas and help successful start-ups to stay in our state.
The people running small businesses have navigated a treacherous year and worked tirelessly to stay open — changing their business models, innovating to meet customers’ needs, and showing the grit and determination that makes Wisconsin great.
It’s exciting to think that after a terrible 2020, we may soon finally be on top of the coronavirus. With the right policies and resources, we can ensure that our small businesses, and our economy, will come out on top as well.
Missy Hughes is secretary and CEO of the Wisconsin Economic Development Corporation, the state’s leading economic development organization.
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