SMALL BUSINESS INSIDER
BY KAREN KERRIGAN –
Our latest survey in partnership with the U.S. Hispanic Chamber of Commerce (USHCC) reports that small business owners want President Biden and Congress to focus, focus, focus on policies that promote economic recovery: 41% of small business owners (SBOs) say economic recovery from the COVID-19 pandemic should be one of Congress’ top priorities!
“Ending the COVID-19 pandemic” is next on this list of small business priorities, along with concerns about high healthcare and coverage costs – a persistent pain point for small businesses that never seems to go away. (Read this joint January 13 SBE Council-USHCC letter to Congress that outlines these small business priorities and our call to action, which urges lawmakers to engage the small business community to hear their concerns and to directly address their issues, especially in the area of affordable health coverage.)
Given relentless inflation, the supply chain mess, labor shortages and the uncertain direction of the economy and COVID variants, the public is losing confidence in the leadership of President Biden. Americans are expressing “frustration” and “disappointment” in his presidency. At the same time, the approval ratings of Congress have sunk to new lows (20% approval in Nov. 21) after being pretty dismal for most of 2020 and 2021.
Why isn’t Washington focusing on the concerns and needs of small businesses?
Maybe if the White House and Congress listened to small business owners and entrepreneurs, and acted on their priorities – a policy agenda that supports economic recovery and stability – Americans would express more confidence in their elected leaders. This agenda would provide local businesses with relief and support, and help entrepreneurs keep revenues flowing at healthy levels. Regrettably, the Census Bureau’s Small Business Pulse Survey is reporting a significant dip in small business revenues over the past several weeks. For the week of 1/3/2022-1/9/2022, 33% of small businesses experienced a decrease in sales and revenues. In the Accommodation and Food Services the number of small businesses reporting a decline reached almost 50% of businesses (48.9%). This is a big RED FLAG.
In this weekly Pulse survey, small businesses also continue to report domestic supplier delays (42.4%); delays in shipping/delivering to customers (24.3%, and reaching 54.7% in wholesale trade); 75.7% are paying higher prices for goods and services; and 36.6% are looking at more than 6 months “before this business returns to normal operations.”
“Relentless Inflation” Putting a Massive Burden on Small Businesses
Congress Creating More Problems Rather than Finding and Advancing Solutions
On January 12, the Bureau of Labor Statistics (BLS) reported that inflation spiked 7% for 2021, the fastest growth since 1982. In a media release, SBE Council commented about the data, and the direction of federal policy. As I noted:
“Unfortunately, President Biden and the congressional majority in Congress continue to focus on an agenda that is fueling inflation’s flame and intensifying its effects. Policies and proposed policies are creating extraordinary uncertainty for businesses.”
And in a January 16 AP story running nationwide (Rising Costs Add to Pandemic Pain for Small Businesses), SBE Council chief economist Keating observed: “There’s a tremendous amount of not just risk…but uncertainty. We just don’t know what’s going to happen. Consumer demand is there, but there are just enormous supply chain constraints. All of this is feeding into price increases.”
The Wrong Policies and Misdirected Efforts.
The policy response from President Biden and Congress is not helping matters.
President Biden is still pushing his massive tax-and-spend package and is wrongly accusing businesses of price gouging. Actions being planned (or have been taken up) by Congress are equally baffling like, for example, intrusive anti-trust/regulatory measures against America’s technology leaders. For example, the Senate Judiciary Committee is preparing to vote January 20 (without holding a hearing) on the defective “American Innovation and Choice Online Act” (S.2992) that would actually undermine and harm innovation and online choice. This measure would significantly impact small businesses – their access to customers, and the free or low-cost services provided by technology platforms.
These anti-trust efforts could fuel inflation’s flames as summarized by CCIA. In a Deeper Dive blog post, CCIA points to concerns expressed by former Obama U.S. Treasury Secretary Larry Summers, among others, who said:
“There are many areas like transitory inflation where serious economists differ. Antitrust as an anti-inflation strategy is not one of them. However, as described, hipster Brandesian antitrust, with which the Admin and its appointees flirt, is more likely to raise than lower prices.”
Former OMB and CBO Director Peter Orszag agrees with Summers, as does a big list of economists and economic experts who have weighed in on the value of the digital economy, how digital technology counters inflation, how platforms like Amazon continue to help drive prices down (yes, this is a good thing), and how the Klobuchar-Grassley bill (S.2992) would actually lead to fewer choices and higher prices. As I observed in a press release on S.2992:
“America’s platform ecosystem is benefitting consumers, small businesses and the platforms alike, but outdated and uninformed views about competition and the technology ecosystem has some Senators responding to niche special interest voices who do not represent consumers. The bill would upend models and services that consumers enjoy. It would erect barriers to the massive consumer marketplaces that small businesses currently have access to, which are driving new sales, helping them to compete and survive – even thrive – in the COVID economy. Congress needs to focus on the pain points and priorities of small businesses, and breaking ‘big tech’ is not one of them.”
The remainder of January will a busy one indeed, as SBE Council continues to fight for common sense policies that will support all American businesses, rather than harm them during this critical time for our country and economy.
Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council