COVID-19 Local Response Principles: Small Business and Jobseekers

NLC is committed to providing cities, towns and villages with the tools they need to Respond, Recover and Rebuild, and has released ten new policy briefs meant to provide clear, actionable steps that municipal leaders can take to respond to the impact of COVID-19 in their communities.


Since the Great Recession, small businesses have been the major drivers of net new job creation in the United States. But small businesses have also been hit hard by the pandemic, bouncing back more slowly than larger firms. While small and mid-size businesses have created more jobs between October and December 2020, the net growth this year is still smaller than for larger firms. This means many residents in our nation’s cities, towns and villages are out of work, and our biggest job drivers are not prepared to accept them.

Many of those now deemed “essential workers”, like grocery store employees, delivery drivers, and home health care workers, have historically been low wage jobs and may not be covered by traditional workplace protections. Some sectors we have relied on for vibrant communities, like the restaurant industry and boutique shopping, have been decimated by the pandemic. The businesses most likely to fail are those that were undercapitalized to begin with, which overrepresents Black entrepreneurs; the workers most likely to struggle are those in essential but low wage frontline positions, who have preexisting health conditions or childcare responsibilities that preclude them from working, where women of color are dramatically overrepresented.

City leaders can play a key role is in connecting workforce development programs to the needs of strategic small and mid-size business sectors.

NLC’s recent COVID-19 Local Response Principles brief on Supporting Small Businesses, Essential Workers, and Jobseekers outlines strategies that cities can use, like understanding local employment trends; leveraging connections with workforce boards and community colleges to connect training to local needs; tracking and understanding changes in the needs of local entrepreneurs; waiving or reducing fees for outdoor space use and license renewals, and working with local lenders to be strategic about business funding. To ensure that these conversations are part of your local strategy, identifying members of leadership staff to mobilize and lead these strategies is one key thing any municipal leader can do.

City leaders can play a key role is in connecting workforce development programs to the needs of strategic small and mid-size business sectors. Workforce development programs tend to be geared toward specific large employers and industries, but can also be tailored to meet the needs of business sectors that project growth. This can include essential fields that can provide high quality, family-supporting jobs without college degrees, like healthcare workers, commercial drivers, small-scale food production, specialty manufacturing, and biotechnology.

City leaders can also set strategies for job growth and encourage local financial institutions to lend and invest Community Reinvestment Act funds in line with those strategic areas. This helps align investment across the community, without leaving the city to do it alone. It can also help drive resources toward underrepresented small business owners who have been hardest hit due to limited access to capital. Setting a strategy for racial and gender equity in business support can help build more inclusive, resilient local economies.

2020 has taught us that none of us can make it alone. As communities across America continue to respond to the COVID-19 pandemic and set their sights on economic recovery, city leaders play a critical role in supporting small businesses, essential workers, and jobseekers, and can rally others around them to set shared priorities and work toward a more inclusive future. NLC is here to support you in that journey.

Learn More

View and download the ten COVID-19 Local Response Briefs to better help your communities.

About the Author

Jennifer Steinfeld

About the Author

Jennifer Steinfeld is the Director, Entrepreneurship & Economic Development