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Editorial: Small-business recovery is a vital need for Nebraska
Small business recovery

Editorial: Small-business recovery is a vital need for Nebraska


At the end of November, the number of small businesses open in Nebraska was 18% fewer than at the start of the year.

Congressional negotiators have finally reached agreement on a new round of aid to households and businesses hit hard by the COVID crisis. That badly needed assistance, totaling $900 billion, can address a host of needs across the nation and in the Midlands.

In Nebraska, one of the most crucial is helping small businesses get through the next few months.

One of the most painful blows this year is how the pandemic threw so many small businesses into financial crisis. Data from the Kansas City Federal Reserve and the Nebraska Department of Labor illustrate the scale of the harm:

In April, net revenues were down 30%, on average, for Nebraska small businesses.

The same month, a Fed report stated, Nebraska’s “leisure and hospitality industry collapsed, shedding more than 37,000 jobs.”

Retail employment in Nebraska fell from 103,000 in February to 92,000 in April.

At the end of November, the number of small businesses open in Nebraska was 18% fewer than at the start of the year.

These small-business challenges have tremendous effects on the state’s economy — and on the well-being and sense of place for communities and neighborhoods. Some 48.8% of employment in Nebraska is provided by businesses with fewer than 50 employees. That’s higher than the national figure of 43.8%.

“As Nebraska’s small business community accounts for a large share of employment, and the livelihoods of many households,” the Kansas City Fed stated in an analysis last week, “a sustained recovery for small-sized firms will be crucial to the state’s longer-term outlook. A return to normal levels of activity has remained elusive for many firms, as the pandemic continues to test the state’s economic resilience.”

Overall, for most of the year Nebraska’s small-business sector fared better than did the nation’s small businesses as a whole, according to the Fed and Department of Labor analysis. Some sectors in Nebraska were less susceptible to the downturn, and others fought hard to rebound — the leisure and hospitality industry, for example, brought back around 24,000 jobs between April and October.

But the severe worsening of the pandemic in Nebraska in October and November did major harm to the small-business sector, the analysis shows. “Although the share of small businesses continuing to operate in Nebraska has remained higher than the nation throughout the pandemic,” the Fed states, “more firms have closed in recent weeks. ... In recent weeks, however, business activity has slipped, despite prospects of widespread vaccine distribution in the coming months.”

In November, “a larger share of small businesses” surveyed in Nebraska “indicated a minimum of six months was still needed for a return to normal.”

This downturn raises major concern for Nebraska and underscores the importance of the new federal aid package — indeed, it shows how Congress contributed to the problem by dawdling for so long. It’s notable that the bipartisan Problem Solvers caucus, which includes 2nd District Rep. Don Bacon, provided the framework for the final agreement — a result that underscores the need for bridge-builders who reach across the aisle to break partisan deadlock. That’s a lesson as applicable and timely for the operation of the Nebraska Legislature as it is in Washington.

This time around, the federal government must learn from its earlier mistakes on the aid front, making sure that more of the money reaches deserving small businesses rather than large ones taking advantage of loopholes, and that needless bureaucratic delays are avoided.

Many small businesses in Nebraska are hurting badly. Let’s maximize the benefit from this new aid as our state moves toward a New Year and new opportunities for recovery.

The editor's favorite columns from 2020

A native Nebraskan and 1979 World-Herald news intern, I became the paper's executive editor in January after spending my career in other states. It's been quite the news year, from a pandemic to the nation's biggest protests since the Vietnam War and a community-wrenching homicide to another bitterly fought presidential election. 

Along the way, I shared some impressions of the news and the joy of returning to Nebraska. 

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