The Pandemic Startup Boom Is Looking Real

It turns out the new starts are not all one-person side-hustles. And there’s some other good economic news.

Good Morning!

Here are today’s highlights:    

• Lou Mosca isn’t a big fan of sharing the numbers.

• So far, at least, California’s $20 minimum wage for fast-food workers hasn’t been a disaster.

• While lax construction regulation may have contributed to Helene’s devastation, banking over-regulation may have contributed to the housing crisis.

• The median asking price for a business is less than the median sale price for a home.

THE ECONOMY

Pandemic startups are fueling the economy: “Stuck at home with time — and, in many cases, cash — to burn, Americans started businesses at the fastest rate in decades. What happened next might be even less expected: Those businesses thrived, overcoming supply chain disruptions, labor shortages, rapid inflation, and the highest interest rates in decades. Businesses formed from 2020 to 2022 had created 7.4 million jobs by the end of 2022, according to data released by the Census Bureau last month, contributing to the strong rebound in the broader labor market. More timely but less comprehensive data suggests that these businesses have continued to add jobs in the past two years.”

• “Few predicted it at the time, but the pandemic proved fertile ground for would-be entrepreneurs. The break in their routines gave some people the chance to pursue long-delayed dreams, or to consider possibilities they might otherwise have dismissed.”

• “Low interest rates made it comparatively easy to raise money to fund a business. And the pandemic itself created business opportunities large and small: Millions of Americans suddenly needed ring lights, face masks, exercise bikes, and something, anything, that could keep their children entertained for a couple of hours.”

• “New data from the Census Bureau shows that the businesses created in 2020 were smaller on average than those created in the years before the pandemic. But there were far more of them, and they grew as fast as their pre-Covid counterparts, if not faster. In a brief research note last month, Mr. Haltiwanger, the University of Maryland economist, and a co-author wrote that the new data provided ‘overwhelming evidence that the pandemic and its aftermath featured a surge in genuine entrepreneurial employer-business creation.’”

• “‘A lot of the entrepreneurial journey is taking that first step,’ Christian Reed, an entrepreneur in Boston, said. ‘You’re like, Oh, I don’t know if I want to take that plunge.’ The pandemic, he said, was the nudge that many would-be business owners needed to take the risk.” READ MORE