Putting a Smiley Face on Desperation
The tone of a recent Public’s Radiiiiio article by Joe Tasca is strange. The headline is “2020 was a record year for new businesses in Rhode Island,” with a lede of: “Rhode Island saw an unprecedented number of business closures in 2020, but it was also a record year for new business filings in the state.” A reader might wonder: so what’s the point?
Put aside the questionable pretense that Secretary of State Nellie Gorbea has anything in her background that would justify turning to her for business advice. Read carefully the voice of wisdom in URI business Professor Edward Mazze, and you’ll pick up the thread that should be most relevant to Rhode Islanders:
New business owners like Brinton are doing their best to adapt to a changing business climate, but URI professor Ed Mazze says most of the businesses established in 2020 won’t survive long-term.
“Easily 50% of them will probably fail because of one of three reasons: there’s no market for what they’re doing, or they lack capital, or that they go back to a job that they may have been working at before the pandemic began.”
The reality is that people are starting businesses because the path of least resistance (working for somebody else), which has long been difficult owing to Rhode Island’s terrible business climate, has closed due to the government’s response to the COVID-19 pandemic. People are desperate, so they’re doing whatever they can think of to make money. (True, those with resources may see it as an opportunity, but that’s arguably a privileged version of the same dynamic.)
This is nothing new in Rhode Island. I looked at the question at some length in 2015, and my conclusion was that people were starting businesses in Rhode Island to make money, but as soon as they began to reach the point that they had to begin making things official — dealing with regulations, labor laws, and so on — Rhode Island simply makes it too difficult.
If the Public’s Radiiiiio wants to serve the public, its reporters can begin by digging into that story, although it’s one where the Secretary of State and the rest of Rhode Island’s political establishment will have to be challenged rather than simply cited as if they’re experts by virtue of their political success.
Featured image by Tim Mossholder.