The NO BOSS Act Strengthens American Entrepreneurship – and Policymakers Should Do More
July 16, 2024
July 16, 2024
The United States is currently enjoying remarkable economic circumstances. Economic growth, though slower than late last year, remains among the strongest in the industrial world; unemployment has remained at or under 4 percent for 31 months, the longest stretch in 50 years; inflation sparked by emergency government spending and supply chain disruptions during the Covid era, has cooled significantly and is nearing the Federal Reserve’s target rate; and stock markets are celebrating, hitting record highs in recent weeks.
Not unrelatedly, entrepreneurship in America is also booming. Monthly new business applications continue their four-year surge begun in the spring of 2020, and a recently released study finds that majority of Americans have an interest in launching a new business. Based on a survey conducted in early May, the Shopify/Gallup Entrepreneurship study found:
The continuing surge in new business applications and the findings of the Shopify-Gallup Entrepreneurship study are good news for the U.S. economy. Prior to the Covid pandemic, new business formation had been in decline for four decades. The decline was cause for considerable alarm, given that repeated research has demonstrated that startups account for an outsized portion of the innovations that drive productivity growth and economic growth, and are responsible for virtually all net new job creation.
Given current circumstances, it might be tempting for policymakers to conclude that American entrepreneurship is healthy again and, therefore, unworthy of their attention. That would be a mistake. Rather, the rise in the number of Americans taking the risk to strike out on their own and build something new is an historic opportunity – a call to decisive action. Now is the time for policymakers to pursue a bold pro-entrepreneurship and -innovation agenda – one that reinforces the recent surge, supports those that have taken the leap, and encourages others to do the same.
A perfect example of how policymakers can affirm and reinforce American entrepreneurship is bipartisan legislation that was introduced into the House of Representatives on June 4th by Reps. Mike Carey (R-OH) and Greg Landsman (D-OH). The New Opportunities for Business Ownership and Self-Sufficiency (NO BOSS) Act will improve and modernize the nation’s Unemployment Insurance (UI) program by leveraging the power entrepreneurship. Specifically, the Act will broaden and facilitate participation in the Self-Employment Assistance Program (SEA), a currently underused aspect of the UI program that offers qualifying individuals the opportunity for self-employment by combining income support during periods of unemployment with activities related to starting a business.
The bill is a powerfully pro-innovation and pro-entrepreneurship reform to an important aspect of America’s employment policy apparatus. Here are three additional steps that policymakers can take to solidify the surge in new business formation and generate new momentum for the U.S. economy:
On January 16th, Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Jason Smith (R-MO) announced a bipartisan, bicameral tax framework that, among other important provisions, would restore first-year expensing of U.S.- based R&D investments. The legislation – introduced as the Tax Relief for American Families and Workers Act of 2024 – was passed by the House of Representatives on January 31st by a vote of 357 to 70 with broad bipartisan support. The Senate should pass the legislation immediately.
On November 17, 2023, Senators Jerry Moran (R-KS), Tim Scott (R-SC), and Mark Warner (D-VA) introduced the Expanding American Entrepreneurship Act. The bipartisan legislation would expand parameters of section 3(c)(1) of the Investment Company Act of 1940 to permit emerging investment fund managers to raise larger funds with a higher number of permitted investors – including more accredited women investors and investors of color – diversifying the investor base and thereby directing more equity capital to women founders and entrepreneurs of color. Similar legislation – the Improving Capital Allocation for Newcomers (ICAN) Act – passed the House on March 8th as part of the Expanding Access to Capital Act.
To fulfill the extraordinary promise of the CHIPS and Science Act and secure America’s innovation future, policymakers must act to pass bold skilled workforce development policies – including awarding “graduation green cards” to foreign-born graduates of American universities who want to stay and pass a national security background check, and creating a “Startup Visa” to attract and retain foreign-born entrepreneurs.
The continuing surge in new business applications and the findings of the Shopify-Gallup Entrepreneurship study are great news for America, but should not be an excuse for policy complacency. Thriving entrepreneurship is essential to America’s economic vitality, but remains a risky undertaking. A third of new businesses fail by their second year, half by their fifth. America’s innovators need and deserve a policy environment that maximizes the chances of their success. Now is the time – with the wind at their backs – for policymakers to make strengthening American entrepreneurship a national priority.
John R. Dearie is the president of the Center for American Entrepreneurship.