‘Crisis:’ Small Businesses Getting Crushed Under Inflation, Labor Market
By Casey Harper (The Center Square)
Small business week came and went this week, and small businesses took the opportunity to raise a range of concerns about the economy and their future.
The U.S. Chamber of Commerce released a report on the labor market this week, saying that “every state is facing an unprecedented challenge finding workers to fill open jobs,” calling it a “crisis.”
The National Federation of Independent Businesses released a report as well echoing that concern, reporting that out of those business owners hiring or wanting to hire workers, 92% reported that there are “few or no qualified applications for the positions they were trying to fill.”
“The labor market continues to be a big challenge for small business owners,” NFIB Chief Economist Bill Dunkelberg said. “More owners are raising compensation to compete, but labor quality remains a serious problem for owners.”
A new report from the small business network Alignable found businesses have still not bounced back from the pandemic-era shutdowns.
The agency found that 74% of those surveyed are worried about rising interest rates while 27% said these rates already have hurt their businesses.
“Only 34% of small business owners are earning as much or more than they did prior to COVID, now three years after the initial impact,” the group said. “And that statistic has dropped four percentage points from 38% in Jan. So, 66% of U.S.-based SMB owners still aren’t making as much as they did prior to the pandemic.”
The labor market and elevated inflation have been a major problem for small businesses as they work to recover from the pandemic-era shutdowns.
“President [Joe] Biden’s tax increases will hit small to mid-size businesses,” Karen Kerrigan, Small Business & Entrepreneurship Council president and CEO, said in a statement. “The sizable increases take aim at many struggling firms as they work to recover, compete, and operate during an unstable and inflationary period.”
Biden has taken fire in particular for inflation, which was fueled in part by a spike in federal spending and money-printing. Biden spoke from the White House for Small Business Week Monday and touted his economic record.
As The Center Square previously reported, the White House also pointed to pandemic-era assistance programs, the bipartisan infrastructure bill, and the CHIPS and Science act, which is aimed at promoting domestic manufacturing.
Biden painted a rosier picture than small business groups did this week, pointing to programs like the COVID-era Paycheck Protection Program.
“Small businesses are the engine of our economy, the glue, the heart and soul of communities,” Biden said.
The NFIB pushed back on Biden after his speech, though, pointing to the proposed tax increases in his recently proposed 2024 budget. The group recently released an ad buy blasting Biden’s plan, saying the tax increases will hurt businesses that already are struggling.
“The White House is claiming they are ‘closing a loophole’ by subjecting small business income to a new 5% tax, but that claim is false and misleading,” said Kevin Kuhlman, NFIB vice president of Federal Government Relations. “Small businesses are not a tax loophole and ask their elected officials to reject the proposed tax hikes.”
Syndicated with permission from The Center Square.