Small Business Growth Has Hit A Wall In Most Of America

A new report helps explain Trump’s popularity in the Heartland

If you live in a coastal city, flush with tech money and all its trappings—schmancy meal delivery, craft mixology bars, Uber—you may not have noticed a serious problem plaguing most of the country. In parts of the U.S less affected by the post-recession entrepreneurial boom, the growth of new business has hit a wall—and fast.

New analysis by the Economic Innovation Group—a research organization co-founded by Silicon Valley mogul Sean Parker—shows that the economic recovery of this decade has been marred by the smallest number of new businesses opening in the U.S. since at least 1980. Nearly 2 out of 3 rural counties lost businesses from 2010 to 2014. And half of the new businesses that did open are bundled into just 20 counties—in our big cities.

What factors have contributed to the dearth of new small business in less populated areas? Largely that these regions haven’t recovered from the 2008 crash in the same way that cities have: Banks are still closed, home equity as a source of capital has dried up, and skilled laborers have left in search of big-city opportunity. “The types of businesses located in rural areas are not the industries that investors want to pour their money into,” says Alice Williams, a small business specialist with Frontier Communications. “They prefer Silicon Valley–style tech start-ups with potential for huge growth.”

This perspective—that only highly educated people in big cities are able to get businesses off the ground—is being cited as a reason for Donald Trump’s rise in the country’s heartland areas. This is where he’s been able to bring together farmers with promises of deregulation and support for crop insurance. Many of these farmers aren’t happy with his stance on immigration, though, and for good reason: They rely on migrant workers, and, as the study notes, foreign-born and immigrant populations are far more likely to start new businesses than natural-born U.S. citizens. If we were to build a wall, we’d lose farm labor, as well as potential small business owners.

Business consultant and University of Iowa entrepreneurship lecturer John Paul Engel has been working to train small business owners in the state as part of the university’s John Pappajohn Entrepreneurial Center (JPEC). In Iowa, the study shows that only 12% of the state population lives in counties where business growth matched or exceeded the national rate. “In this generation, you have fewer people who are going into the trades—the plumbers, or what you think of as traditional small business. People just don’t think it’s as cool as it once was,” he says. “My program is aimed at educating and training people to try to help them be more successful as they start businesses.”

“There are a lot of small towns that are struggling because, for example, if the guy who owns the grocery store retires and his family doesn’t want to take it over, that town then doesn’t have a grocery store,” Engel says. “You’re also seeing a general population drain from rural areas. You already didn’t have a lot of people there to begin with, and now you’re seeing young people leave for better opportunities in metro areas.” To stem that tide, the JPEC is training kids in business at the K-12 level, as well as creating online groups and in-person summits for networking opportunities—which are rare in less densely populated regions.

It’s heartening to find people like Engel trying to work against the trend, especially considering the national loss of middle-wage jobs has been absolutely staggering. As the study reports, half of the recovery’s 9.1 million jobs were in low-wage sectors. “Were it not for these relatively few pockets of resiliency, the U.S. economy would have seen near-total stagnation in its business landscape,” the study notes, rather ominously.

This leaves much to be done to even the playing field for new business creation. If things continue as they are, opportunities will continue to be increasingly clustered in metro areas, with rural areas continuing their slump. “Knowledge-based economic activity” isn’t going to put food on everyone’s tables—we need grocery stores, too.

Center for American Progress Action Fund

Tonight's Democratic debate is a must-watch for followers of the 2020 election. And it's a nice distraction from the impeachment inquiry currently enveloping all of the political oxygen in America right now.

For most people, the main draw will be newly anointed frontrunner Pete Buttigieg, who has surprisingly surged to first place in Iowa and suddenly competing in New Hampshire. Will the other Democrats attack him? How will Elizabeth Warren react now that she's no longer sitting alone atop the primary field? After all, part of Buttigieg's rise has been his criticisms of Warren and her refusal to get into budgetary specifics over how she'd pay for her healthcare plan.

The good news is that Joe Biden apparently counts time travel amongst his other resume-building experience.

Keep Reading Show less
Official White House Photo by Sonya N. Hebert

This election cycle, six women threw their hat in the ring for president, but is their gender holding them back? Would Americans feel comfortable with a woman leading the free world? Based on the last election, the answer is a swift no. And a new study backs this up. The study found that only 49% of American men would feel very comfortable with a woman serving as the head of the government. By comparison, 59% of women said they would feel comfortable with a woman in charge.

The Reykjavik Index for Leadership, which measures attitude towards women leaders, evaluated the attitudes of those living in the G7 countries as well as Brazil, China, India, and Russia. 22,000 adults in those 11 countries were surveyed on their attitudes about female leadership in 22 different sectors, including government, fashion, technology, media, banking and finance, education, and childcare.

Only two countries, Canada and the U.K., had a majority of respondents say they would be more comfortable with a female head of state. Germany (which currently has a female Chancellor), Japan, and Russia were the countries least comfortable with a female head of state.

Keep Reading Show less
via Gage Skidmore / Flickr

If you are totally ready to move on from Donald Trump, you're not alone. According to a report last April from the Wason Center National Survey of 2020 Voters, "President Trump will be the least popular president to run for reelection in the history of polling."

Yes, you read that right, "history of polling."

Keep Reading Show less
via Around the NFL / Twitter

After three years on the sidelines, Colin Kapernick will be working out for multiple NFL teams on Saturday, November 16 at the Atlanta Falcons facility.

The former 49er quarterback who inflamed the culture wars by peacefully protesting against social injustice during the national anthem made the announcement on Twitter Tuesday.

Kaepernick is scheduled for a 15-minute on-field workout and an interview that will be recorded and sent to all 32 teams. The Miami Dolphins, Dallas Cowboys, and Detroit Lions are expected to have representatives in attendance.

RELATED: Joe Namath Says Colin Kaepernick And Eric Reid Should Be Playing In The NFL

"We like our quarterback situation right now," Miami head coach, Brian Flores said. "We're going to do our due diligence."

NFL Insider Steve Wyche believes that the workout is the NFL's response to multiple teams inquiring about the 32-year-old quarterback. A league-wide workout would help to mitigate any potential political backlash that any one team may face for making an overture to the controversial figure.

Kapernick is an unrestricted free agent (UFA) so any team could have reached out to him. But it's believed that the interested teams are considering him for next season.

RELATED: Video of an Oakland train employee saving a man's life is so insane, it looks like CGI

Earlier this year, Kaepernick and Carolina Panthers safety Eric Reid reached a financial settlement with the league in a joint collusion complaint. The players alleged that the league conspired to keep them out after they began kneeling during the national anthem in 2016.

Before the 2019 season, Kaepernick posted a video of himself working out on twitter to show he was in great physical condition and ready to play.

Kaepnick took the 49ers to the Super Bowl in 2012 and the NFC Championship game in 2013.

He has the 23rd-highest career passer rating in NFL history, the second-best interception rate, and the ninth-most rushing yards per game of any quarterback ever. In 2016, his career to a sharp dive and he won only of 11 games as a starter.