Many small businesses were battered during the pandemic and are still recovering. Large numbers of restaurants and other retail businesses were lost permanently as a result of mandated shutdowns and social distancing. In the months ahead, the economy will need entrepreneurs to fill the void by starting new businesses and creating millions of jobs.
During the recession a decade ago, the business startup rate fell and never fully recovered, which contributed to years of slow growth. This time around, the tax and regulatory policies of the Biden administration may undermine growth once again. However, state and local governments can take actions themselves to improve their entrepreneurial climates and offset negative policies coming from Washington.
A new Cato Institute study examines ways that the states can slash regulations to spur startup businesses. Some of the proposed reforms are widely known, such as reducing occupational licensing, which imposes barriers to new professionals such as cosmetologists, manicurists, athletic trainers, pest controllers, and landscape contractors.