Author: Dennis Pyburn

Businesses Can’t Win with COVID

22 December 2020
Dennis Pyburn
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By Evelyn Pyburn

The number of confirmed COVID-19 cases in Montana has been declining since November 11, especially over the past two weeks while testing numbers have remained steady. But for closed and partially closed businesses there seems to be no winning, the decline in case numbers, just like the increase, has resulted in the extension of restrictions on business.

Last week, Montana Gov. Steve Bullock attributed the decline in case numbers to restrictions that went into place Nov. 20, which expanded the existing mask mandate to the entire state and required bars and casinos to close by 10 p.m. – a mandate that county health officer, John Felton then extended to all businesses through December, and which now, last Thursday, he extended again through January 31.

Confirmed cases of COVID are down 36% since Nov. 20, said the Governor, advocating that the restraints are working and should continue.

The state’s COVID website shows that daily confirmed cases peaked about Nov. 11 and averaged 1103 daily confirmed cases throughout the rest of the month. The average number of daily cases identified for the first 12 days of December has been 849.

While the number of hospitalized individuals remains relatively high — with 488 individuals reportedly hospitalized with the virus on Thursday (dropping to 365 by Sunday) — Bullock said he expected the number to drop after local data is reconciled with the state’s reporting system. The number of deaths reported statewide as of Sunday was 818 with 3,080 total hospitalizations.

The World Health Organization said in March that the fatality rate of COVID-19 was roughly three percent – meaning three out of a hundred people contracting the disease would die – today it is being estimated that a more accurate fatality rate is 0.2 or 0.3 percent. The reason for the change is researchers believe now that there were far more cases of COVID than has been realized and that the disease actually began in December rather than February and March 2020.

One researcher, Jay Bhattacharya, a Professor of Medicine, with a Ph.d. in Economics, at Stanford University, reported that in testing for antibodies, (which indicate that someone has had the disease) in San Diego County, CA, where about 1000 COVID cases had been identified, antibody tests indicated that 50,000 people had actually been infected. So the case numbers were off 50 fold.

Because of the controversy those findings, 82 similar studies have been conducted with the same extraordinary results, confirming that the average fatality rate is not three in one hundred, but two in one thousand.

Other research confirms that there is about a thousand-fold difference between the mortality rate in older people (70 and up) and that of children. For children COVID-19 is less dangerous than the seasonal flu, according to Bhattacharya. Two to three times more children die annually from the common flu than from COVID. For older people, however, COVID is much more deadly than the flu. About four in one hundred of those over 70 die from the disease.

Bhattacharya pointed out that the use of lockdowns have never before been used to control the spread of a disease. They were devised to slow the infection rate in order to prevent hospitals from being overwhelmed, a strategy with minimal results.

The lockdowns on businesses, however, are “turning out to have deadly effects.”

While many believe economic impacts are minor compared to health impacts, the reality is that more people will probably die of the economic impacts throughout the world than because of virus infections. The UN has estimated that 130 million additional people will starve this year as a result of the economic damage resulting from the lockdowns – a devastating reversal of the past 20 years during which a billion people have been lifted out of poverty.

Bhattacharya points out that deaths will also occur because other health treatments, including the immunization against other diseases, have not been pursued because people have had more fear of COVID than of the risks from other diseases. Deaths are expected to increase due to cancer and diabetes because of economic shutdowns. And, because of social isolation, suicide rates are already on the rise, especially true for youths, ages 18 through 24, who actually have little risk of death from the virus.

“Widespread lockdown policy has been a devastating public health mistake,” concludes Bhattacharya, who urges, “Our goal should therefore be to minimize mortality and social harm until we reach herd immunity.” He explained that herd immunity is not a strategy but a “biological fact that applies to most infectious diseases… The vaccine will help, but herd immunity is what will bring it to an end.”

Policies should be to allow those at minimal risk of death to live their lives normally, while better protecting those at highest risk.

The first 9,750 doses of the vaccine were delivered slated to be delivered to Montana ollowing its authorization from the Food and Drug Administration.

The first doses were  delivered to 10 major hospitals in the state’s seven largest communities. Doses delivered to the state in subsequent weeks will be reserved for rural health care workers and staff and residents of nursing facilities.

Bullock said 284 contracted health care workers are currently deployed in the state to assist in hospitals seeing a large number of COVID-19 patients. Close to 200 health care workers in the state are in isolation or quarantine due to exposure to the virus.

More than 73,303 people across Montana have been diagnosed with COVID-19 since March.

Yellowstone County has experienced the highest number of cases at 12,722, with 2,469 active cases as of Sunday. Total deaths in the county is 144.

So far 3,080 people have been hospitalized.

Black Activists Praise Employment Boom That Defies COVID-19 Challenges

22 December 2020
Dennis Pyburn
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The latest federal employment report revealed yet another month of recovery for the American workforce. Members of the Project 21  black leadership network credited the Trump Administration for policies that have brought back jobs – particularly in black communities – after businesses were devastated earlier this year by COVID-19 lockdowns.

“The news just keeps getting better. The free-market policies of President Trump have lowered the unemployment rate at the fastest level in history! The jobless rate dropping from nearly 15% to under 7% in less than a year is stunning,” said Project 21 Co-Chairman Horace Cooper. “Incredibly, the unemployment rate is now lower than it was during Obama’s entire first term. Notably, black Americans lead the employment gains – the exact opposite of the experience of the Obama years.” 

The American workforce added 245,000 new jobs in November – making it the seventh  straight month of declining unemployment since the beginning of the COVID-19 pandemic lockdowns. The overall unemployment rate dropped two-tenths of a percentage point to 6.7%, according to a report from the U.S. Bureau of Labor Statistics. Prior to the lockdowns, unemployment rates posted record lows. 

“Unemployment continues to decline fastest for those who need jobs the most right now – black Americans, Hispanics and other minorities. These positive jobs numbers represent another example of the Trump Administration’s commitment to the black community,” said Project 21 member Donna Jackson. “Even in the face of ill-advised lockdowns, I’m grateful that the White House continues to deliver for all Americans – especially black Americans like me.”

In the black community, total unemployment fell once again by half a percentage point to 10.3%. Approximately 136,000 blacks entered the workforce in November, and black participation in the workforce increased for the third straight month. More than half of black Americans who were forced out of work by the lockdowns are employed again – far outpacing the progress of the Obama Administration after the 2008 recession. Additionally, the U-4 alternative unemployment measure that includes discouraged workers who leave the workforce – often considered the true unemployment indicator – also fell to just 7.1%. That figure has dropped 4.3% since June. 

“The cause of the earlier collapse – and what’s preventing the economy from returning to pre-pandemic levels – has been the destructive and punitive response to COVID-19. Job gains in November showed the economy remains resilient despite the addiction of liberal state governments to socioeconomic lockdowns,” noted Project 21 member Derryck Green. “In my opinion, the employment rate would be much lower, and the labor force participation rate much higher, if business owners were allowed to decide which safety protocols were in the best interests of their employees and customers. The gains we see today will almost certainly be undone – and jobs won’t return – if more states follow California in forcing business owners to shut their doors and ‘temporarily’ lay people off. on.                                                                     

Founded in 1982, the National Center for Public Policy Research is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from some 60,000 individuals, less than four percent from foundations and less than two percent from corporations.

Jobless Claims Increase, Some States Employment Rates Bounce Back

8 December 2020
Dennis Pyburn
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By Bethany Blankley, The Centre Square

The number of individuals who filed for unemployment benefits last week increased to 742,000, the first increase in five weeks, according to new data published by the U.S. Department of Labor.

The number of people who filed for state unemployment benefits in the week ending Nov. 13 grew by 31,000 from the previous week’s revised level of 711,000, according to the Nov. 19 report.

In October, the U.S. gained 638,000 jobs and the national unemployment rate fell to 6.9 percent compared to the near historic high of a 14.7 percent at the peak during state lockdowns, when weekly jobless claims hit a record 6.9 million in March.

he previous week’s unemployment level was revised up by 2,000 from 709,000 to 711,000. The four-week moving average was 742,000, a decrease of 13,750 from the previous week’s revised average, the department stated in a news release accompanying the data. The previous week’s average was revised up by 500 from 755,250 to 755,750.

The unemployment rate drop “can be attributed in part to the fact that a lot more businesses are open now than were a few months ago, as states have gradually loosened restrictions,” Adam McCann, financial writer at WalletHub, says. “In addition, many people who became unemployed during the COVID-19 crisis were temporarily laid off, and either have already been rehired by their former employers or expect to be eventually.”

According to an analysis of unemployment data by the personal finance website, some state’s employment rates have bounced back more than others.

WalletHub compared all 50 states and the District of Columbia across four key metrics. It reviewed the change in each state’s unemployment for the month of October and compared it to data from October 2019 and January 2020. The analysis also compared continued claims in October 2020 to October 2019 and each state’s overall unemployment rate.

States in which employment rates bounced back the most were Iowa, Nebraska, Vermont, Missouri, South Dakota, Montana, Utah, Minnesota, Alaska and South Carolina.

States whose unemployment numbers were still suffering were Arizona, Maryland, Massachusetts, the District of Columbia, New Mexico, New York, California, Louisiana, Nevada and Hawaii.

According to the Department of Labor, the highest insured unemployment rates in the week ending Oct. 31 were in California (8.3), Hawaii (8.3), New Mexico (8.0), Nevada (7.6), Georgia (6.5), Pennsylvania (6.4), Alaska (6.2), Massachusetts (6.2), District of Columbia (6.0), and Illinois (5.7).

The largest increases in initial claims for the week ending Nov. 7 were in Washington (+7,683), California (+5,293), Massachusetts (+3,383), Alabama (+1,704), and Louisiana (+1,626).

The largest decreases were in Georgia (-13,426), Illinois (-6,357), Kentucky (-4,830), Texas (-3,934), and New Jersey (-3,725).

Innovation, Patents Parallel Economic Growth

8 December 2020
Dennis Pyburn
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When it comes to having a booming thriving economy nothing is more important than ideas. Innovation leads economic success.

Production levels, efficiencies, etc. only matter once there is an idea of what to produce or how to produce it. New ideas and innovation are critical to keep ahead of competitors —and protecting those ideas in the market place are patents. Not only must individuals have the freedom to create, being able to guarantee ownership of the idea incentivizes the effort, and that is what patents do.

A total of 1,914  patents were filed and granted in Montana between 1975 and 2019, according to a new study recently released by CommercialCafé which drew upon data from the US Patents & Trademark Office,  exploring the importance of US innovation over four decades.

Montana is among the states with the fewest patents awarded. California is the highest.

Most of Montana’s patents were in Chemistry & Metallurgy, totaling 555, most of which were filed by Dr. Lloyd Berg, who holds the most patents in the state. The late Dr. Berg was formerly head of Montana State University’s Chemical Engineering Department.

The most innovative CPC class in Montana was Technical Subjects Covered By Former Uspc, followed by Basic Electric Elements with 430 and 356 patents, respectively.

Textiles & Paper was the least innovative section in the state, with a patent count of 11.

Nationally, the data for the past 44 years shows that highest patent applications falls under Physics, with 1.1 million patents, followed closely by Electricity, with 900,000 patents.

It used to be that most patents in the US were granted by individual inventors or entrepreneurs, but now more are being granted to large companies.

CommercialCafe also looked at patent applicability, which is different than a true count of distinct patents, in that it counts one patent multiple times, one time for each application across a different field of innovation. Fields of innovation refer to what are called “sections” in the cooperative patent classification (CPC) scheme. There are nine CPC sections, each including several “classes.” It is often the case that one patent claims an invention that applies across multiple sections or multiple classes within one section, or combinations of both.

The study states, “Historically, small U.S. businesses and widespread entrepreneurship have driven American innovation. And, over time, the infrastructure of U.S. innovation itself has undergone several stages of progress and adaptation. For instance, during the ‘Golden Age’ of invention — between the late 1800s and mid-1900s when the U.S. led the world’s industrial revolution — innovative activity happened largely outside of the corporate frame. At that time, world-changing ideas were given physical form by individual creators with financial backing from various investors. As the Harvard Business Review noted in a comprehensive 2017 study, the modern corporation research and development model had outweighed individual inventor patents by the middle of the 20th century. Then, by the year 2000, corporate assignees accounted for 80% of patents.”

The five most innovative U.S. corporations to date are IBM, General Electric, Intel, Hewlett Packard and Microsoft. Among the top ten innovators in 2020 are Micron, Texas Instruments, Xerox, etc. It is interesting to track how dramatically corporations leading the pack have changed over a 45 year period, reflecting how dynamic free markets really are. In 1975 only IBM and GE were in the top ten. Others who have come and gone include Westinghouse, US Phillips, DuPont, RCA Corp, Caterpillar, Ciba-Geigy, Dow, Bell Labs, Motorola, Kodak, Qualcomm.

The five most innovative states to date are California, New York, Texas, Illinois and New Jersey. In particular, a total of 731,705 U.S.-based assignee patents were filed and granted in California between 1975 and 2019, which puts the Golden State in the lead for patenting activity.

Patent activity in the US peaked in 2013, when 144,072 patents were granted — the most in a single year.

About 51% of patents that were granted in the U.S., between 1975 and 2019, have U.S.-based assignees, amounting to 3,331,802 claimed inventions.

The highest patent applicability to date falls under physics (1.1 million patents). Within this field, innovation in computing and information storage has contributed significantly to increases in patent activity in recent years.

Regardless of the originator innovation has had a positive influence on economic growth. The study unveils “a strong positive correlation between patenting activity and gross domestic product per capita at the state level.”

That means, states the study document, “securing economic growth depends on investing in dreams of progress. As such, it’s reasonable to assume that the best way to invest in the dream is to support the dreamers. But, because humanity has yet to invent a way to predict ideas and inventors, the safest bet on securing long-term growth is to invest in education and innovation across the board.”

Nationwide, “patent applicability distribution” shows how innovation in different fields has progressed and concentrated differently in different regions.

The fact that California leads the nation for invention, points to the need for an area to be socially and economically open to the disruption that comes with new concepts. Innovation is most strong in populated areas with strong capital markets that can finance invention.

California stands out with the highest patent applicability for six of the nine main patent classification sections: human necessities; performing operations and transporting; chemistry and metallurgy; physics; electricity; emerging cross-sectional technologies.

Oil and Gas will Remain Important in Future

20 November 2020
Dennis Pyburn
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The Center Square

Over the next two decades, oil and gas production is projected to account for 68 percent of energy consumption in the U.S. and will play a key role in the energy transition to a low carbon future, according to a new report published by the U.S. Department of Energy.

Natural gas is increasingly powering plants to produce electricity, but oil and natural gas are revitalizing the U.S. petrochemical industry, growing the liquefied natural gas industry, and boosting high-tech materials, the report states.

“Oil and natural gas provide more than two-thirds of the energy Americans consume daily,” Deputy Energy Secretary Mark Menezes said when the department released the 37-page report earlier this month in Albuquerque, New Mexico.

“In addition to meeting our energy needs, these fossil fuel resources are integral to our standard of living. This report delves into the importance of these resources, the five key technologies that have supported the industry’s advancement, the opportunities for future domestic energy growth, and more,” Menezeas said.

The DOE says it will work with the industry, academia, state agencies, the private sector, and non-government organizations “to drive innovation forward, to underpin U.S. economic growth and energy security.”

Innovation in the industry includes expanding resource development in the Bakken Shale, the Permian Basin, and the Eagle Ford Shale, while improving oil and gas safety and mitigating environmental problems, the report notes.

In New Mexico, tax revenue from the oil and gas industry contributes to 39 percent of the state’s budget – generating $16.6 billion in annual economic activity, employing more than 134,000 people, and funding more than $1.4 billion for the state’s public schools.

Ryan Flynn, executive director of the New Mexico Oil and Gas Association, explains that any federal ban on oil and gas leasing, fracking or on federal permitting would be “devastating for New Mexico.” He said in response to the Biden/Harris plan to ban fracking and transition away from oil and gas development that, “Any proposal restricting oil and gas development on federal lands would only result in the elimination of thousands of jobs, massive cuts in support for our public schools, and a greater reliance on foreign energy imports.”

The industry is committed to reducing emissions and protecting the environment, he says, “but we cannot slap millions of Americans with proposals that destroy jobs and ravage communities. Any serious energy proposal must recognize the fact that oil and gas will continue to play a major role in meeting our basic daily energy needs well into the future.”

On July 31, 2019, during the second Democratic Party presidential primary debate, when asked if there would be “any place for fossil fuels, including coal and fracking, in a Biden administration,” Biden replied to CNN’s Dana Bash, “No, we would — we would work it out. We would make sure it’s eliminated and no more subsidies, for either one of those, either — any fossil fuel.”

Last week Biden repeated his position in the presidential debate stating his administration would “transition away from the oil industry, yes.”

A recent analysis by NMOGA and the American Petroleum Institute projects that if oil and gas bans were implemented in New Mexico in 2021, more than 62,000 jobs would be lost by 2022.

“For our state, that means over 100,000 working families will be out of a job and nearly 40 percent of our entire state budget would disappear,” Larry Behrens, Western Director for Power The Future, says. “The latest rankings place New Mexico with the eighth-highest unemployment in the country, a standing that will be more permanent if Joe Biden decides nearly 15 percent of our state’s workforce needs to ‘transition” out of their job to poverty.’”

Small Business Organization Endorses Rosendale

22 October 2020
Dennis Pyburn
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The National Federation of Independent Business (NFIB), a business advocacy organization,endorsed Matt Rosendale for election to the US House of Representatives.

 “Matt Rosendale is a champion of small business issues in Montana, from deregulation to less government interference,” said Gary Selvy, NFIB’s Executive Director of State Governmental Relations. “He understands the issues our members are facing, especially during these difficult times. During his time in the Montana state Legislature, Rosendale has demonstrated that he knows Montana values and what is most important to our members. We have no doubt that he will be an excellent small business representative for our state in Congress and we are proud to endorse him today.”

 Matt Rosendale has served as the Montana State Auditor since 2017. Prior to that, he was a member of the Montana state Legislature for six years and served as the Senate Majority Leader for his final two years.

 “Matt Rosendale has a deep understanding of our members’ priorities and concerns,” said NFIB National Political Director Sharon Sussin. “We are confident he will be a strong ally for small business in Congress. That’s why we are pleased to endorse him today.”

The  endorsement comes from NFIB FedPAC, the organization’s political action committee. NFIB FedPAC is funded by NFIB member donations above membership dues.

Six Recognized at Holland & Hart

25 September 2020
Dennis Pyburn
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Holland & Hart announced that six of the firm’s Billings attorneys have been recognized in the 2021 Edition of The Best Lawyers in America© and three attorneys were named to the inaugural edition of Best Lawyers: Ones to Watch. In addition, W. Scott Mitchell received Best Lawyers “Lawyer of the Year“ recognition in two practice areas in Billings. Only a single lawyer in each practice area and designated market area is honored as the “Lawyer of the Year,” making this accolade particularly significant.

Best Lawyers has published its list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Lawyers on The Best Lawyers in America list are reviewed by their peers based on professional expertise and undergo an authentication process to make sure they are in good standing. Best Lawyers: Ones to Watch recognizes associates and other lawyers who are earlier in their careers for their outstanding professional excellence.

2021 Best Lawyers in Billings:

Shame Coleman: Litigation – ERISA; Litigation – Intellectual Property; Litigation – Patent; Patent Law

Kyle Gray:  Appellate Practice; Insurance Law

Charles Hingle: Banking and Finance Law; Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law

William Mercer: Commercial Litigation; Natural Resources Law

W. Scott Mitchell: Commercial Litigation; Employment Law – Management; Litigation – Environmental; Litigation – Insurance; Natural Resources Law; Personal Injury Litigation – Defendants; Product Liability Litigation – Defendants; Workers’ Compensation Law – Employers

Elizabeth A. Nedrow: Employee Benefits (ERISA) Law

2021 Best Lawyers: Ones to Watch in Billings:

Vicki Marquis: Environmental Law

Brianne McClafferty: Commercial Litigation

John Sullivan: Commercial Litigation

“Certificate of Need” Requirements Increased COVID Mortality RatesVote

22 September 2020
Dennis Pyburn
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From Center Square

States that enforced Certificate of Need (CON) laws during coronavirus shutdowns increased mortality rates for COVID-19 patients and others, a new assessment of state laws has found.

Montana is among about 35 states that still impose CON laws – laws which require some health care facilities to “prove need” before being allowed by the state government to go into business or to expand business, such as adding the number of beds. Part of that consideration involves protecting existing, both public and private, facilities from competition.

An analysis of state laws, published in a new working paper by economists Agnitra Roy Choudhury, Alicia Plemmons and Sriparna Ghosh at the University of Cincinnati, Auburn University, and Southern Illinois University, concludes that CON laws increased mortality rates for COVID-19 patients and others.

In Certificate-of-Need Laws and Healthcare Utilization during the COVID-19 Pandemic, the authors found that in states with high hospital bed utilization, suspending CON laws saved nearly 100 lives for every 100,000 residents for all causes of death. Suspending CON laws saved 40 lives from COVID-19 and 57 lives from natural causes of death.

In states with high intensive care unit bed utilization, suspending CON laws saved 28 lives for every 100,000 residents for all causes of death, saved 11 lives from COVID-19 and 15 lives from natural causes of death, the report says.

“CON laws are legal limitations to the expansion and acquisition of medical services within a state and were not structured in a way to prepare or stockpile medical goods and services to the volume that has been required to meet demand swells during the recent pandemic,” it states.

The analysis primarily focused on mortality caused by COVID and non-COVID related reasons to assess how CON laws affected access to health care for illnesses that might require similar medical equipment.

“Their baseline results suggest that mortality rates are higher in states with CON laws relative to that in states without any CON laws,” the report states. “States with high healthcare utilization due to COVID that reformed their CON laws during the pandemic saw a significant reduction in mortality resulting from natural death, Septicemia, Diabetes, Chronic Lower Respiratory Disease, Influenza or Pneumonia, and Alzheimer’s Disease in addition to reduction in COVID deaths.

“In states with high ICU bed utilization that subsequently reformed their CON laws in order to increase acquisitions of medical equipment, 11 lives per 100,000 residents [were saved] from COVID weekly,” the report states.

By keeping CON laws in place, health care providers were prevented from expanding care options, the report found, including the ability to add beds, ventilators or expand facilities.

Twelve states do not have CON laws; 15 states and the District of Columbia have CON laws in place; 23 states suspended some portion of CON laws or enabled emergency provisions.

Several attempts have been made to pass bills in the Montana State Legislature to eliminate Montana’s cumbersome bureaucracy controlling the emergence of new health care providers or preventing existing ones to expand, but to date they have been unsuccessful. CON laws protect hospital profits, not patients, in a process that can takes months or even years, Moriah Lawrence and Angela Erickson at the Pacific Legal Foundation, argue.

Lawrence and Erickson charge that state bureaucrats “are so concerned with the potential harm to the existing companies’ bottom lines that this process ultimately creates ‘Competitor’s Veto.’” In Montana government- ran medical facilities have exercised that veto to block private sector companies from entering the market. Hundreds of preventable deaths can be traced back to CON laws, well before the coronavirus, according to a 2016 Mercatus Center report. Mercatus published empirical evidence to show how death rates were higher for patients suffering from pneumonia, heart failure, or heart attacks at hospitals in states with CON laws than in non-CON states.

NFIB Endorses Rep. Greg Gianforte

21 September 2020
Dennis Pyburn
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NFIB, the nation’s leading small business advocacy organization, has presented its most prestigious legislative recognition, the Guardian of Small Business Award, to Montana U.S. Rep. Greg Gianforte.

“The NFIB Guardian of Small Business Award is awarded to lawmakers whom small businesses can truly count on,” said NFIB Vice President of Federal Government Relations Kevin Kuhlman. “These Members of the United States House of Representatives are dedicated supporters of the key issues that our members are concerned about and have proven themselves to be real champions for small business. Our policy positions are driven by our members, and we report NFIB Key Votes back to our membership. We are proud to recognize the elected officials from the 116th Congress who earned this distinction by taking pro-small business votes supporting financial assistance programs and tax relief and opposing new regulations and increased labor costs. Small business owners across the country need their support now more than ever during these unprecedented times, and we are grateful to these lawmakers for their leadership.”

Added Riley Johnson, NFIB’s Montana state director, “At no time in recent history has small business needed more reliable and steadfast friends in Congress and state legislatures, and without a doubt, Congressman Gianforte has been one. The mom-and-pop enterprises of Montana’s Main Streets are grateful for the support Congressman Gianforte has given them.”

NFIB’s Guardian of Small Business Award is reserved for lawmakers who vote consistently with small business on the key issues identified by small business owners. Those who voted with small business on key issues 70% or more of the time during the 116th Congress earned the NFIB Guardian of Small Business Award. NFIB informs lawmakers in advance which votes will be considered NFIB Key Votes and asks lawmakers to support the consensus views of our members. We also remind them that the results will be reported back to the NFIB membership. 

20% of US Businesses Say They Could Close in Six Months

21 September 2020
Dennis Pyburn
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By Bethany Blankley

More than 20 percent of small business owners said they will have to close permanently if current economic conditions do not improve within the next six months, according to a survey conducted by the National Federation of Independent Business.

The largest small business association in the U.S., headquartered in Nashville, conducted the survey to assess the financial health of small businesses.

The survey found that 21 percent of small business owners said they will have to close without improved economic conditions within the next six months.

An additional 19 percent said they will be able to operate no longer than 7-12 months under current economic conditions.

Holly Wade, NFIB Director of Research and Policy Analysis, said that while small businesses are “adapting to the abrupt shifts in consumer spending, managing customer and employees’ health and safety,” complying with state and local mandates has created additional stress.

“Many of them still need more financial assistance just to keep their doors open and staff on payroll,” she said.

Of the small businesses that were able to receive a mostly forgivable loan through the Small Business Pay Check Protection Program (PPP), 84 percent said they have used the entire amount they received.

Nearly half of PPP loan borrowers (47 percent) anticipate that they will need additional financial support over the next 12 months. If eligible, and if offered, 44 percent said they would apply or re-apply for a second PPP loan.

Most small business owners surveyed said they do not expect business conditions to improve to normal levels until next year at the earliest. Only 19 percent said they expected conditions to improve to normal levels by the end of 2020.

Roughly 52 percent said it won’t be before sometime in 2021; 20 percent said sometime in 2022 when business conditions improve.

So far, sales levels remain at 50 percent or less than they were pre-COVID for about 20 percent of those surveyed.

CARES Act extended unemployment benefit funding hurt small businesses, respondents said. About 32 percent said the extra $600 per week that employees received “hurt their business by making it harder to hire or re-hire workers.”

Roughly 3 percent said they had to offer a higher wage to employees to encourage them to come back to their job; 4 percent said they agreed to have an employee continue working at reduced hours so they could also receive the $600 per week payment.

As a result of the $600 weekly payments, about 68 percent of workers received more income than they did when they were working, a report published by the Foundation for Government Accountability found.

Roughly one in five individuals on unemployment received at least double the amount of their prior wage. A worker previously earning $445 per week, or about $23,000 annually, has been receiving $832 per week in unemployment benefits, more than $43,000 annually, for example.

About 21 percent of the small business owners surveyed by NFSB reported they had an employee take COVID-19 related paid sick leave or family leave as mandated and offered through the Families First Coronavirus Response Act (FFCRA). Among them, only 30 percent said they had claimed the tax credit or an advance refund for reimbursement of these costs.

The survey is the 11th Small Business COVID-19 NFSB survey designed to assess the impact of state and national coronavirus shutdowns on small business operations, economic conditions, and utilization of the targeted small business loan programs.