Published
October 11, 2018
There were lots of smiling faces at the U.S. Chamber’s National Small Business Summit.
Maybe it was hearing from Top Chef competitor Spike Mendelson or hearing how baseball great Cal Ripken applies the lessons he learned in sports to running a business.
Or maybe the hundreds of small business owners gathered in Washington, D.C., were pleased with an economy running on all cylinders.
Unemployment is at a decades-low level and economic growth is a 180-degree reversal from what we experienced during “The Great Meandering,” as U.S. Chamber Senior Vice president and Chief Economist J.D. Foster put it.
Small Business Administrator Linda McMahon and Department of Labor Secretary Alexander Acosta spoke at the summit about the economic optimism we’re experiencing, what the Trump administration has been doing to help small businesses, and what pro-growth policies the administration is working on for small businesses.
Small businesses are optimistic
Small business owners like the current economic conditions. The MetLife & U.S. Chamber of Commerce Small Business Index finds nearly 70% of small business owners are optimistic about the economy.
"The level of optimism from our small businesses ... is the highest it's been in a very long time,” said Administrator McMahon.
Such optimism feeds on itself, noted Secretary Acosta.
"If you as small business owners have confidence that the economy is going to continue to grow, you're going to invest,” he said. “And that investment will mean more jobs, and those jobs will mean more people are going to buy stuff, and that means we're going to see more growth."
Tax reform is driving growth
One big reason for the optimism is tax reform passed last year. It’s generated investment, jobs, and growth across the country.
Administrator McMahon told a story from a landscape business owner in Florida that was “proof positive” that tax cuts work.
"See that truck over there?” asked the owner. “It's $80,000. I call it my 'Tax Cut Truck,' because I can write it off this year. Without the tax cut I wouldn't have been able to have done that. So now I have hired a new employee, and I have six new customers."
Secretary Acosta added, “Tax cuts are fueling investment, not only in things but in people – in workers, providing employees with greater skills.”
Businesses of all sizes all across the country are using tax reform to invest in their companies, employees, and communities.
Helping small businesses offer health and retirement plans
One of the toughest challenges small business owners have is providing health and retirement plans to their employees.
Secretary Acosta talked about what the Labor Department is doing to help
On the health plan front are Associated Health Plans (AHPs). An AHP allows associations (like chambers of commerce) to offer health plans “as if they were an employer,” Secretary Acosta explained.
AHPs give small businesses access to the less expensive, large group market. Businesses could see as much as 40% savings, said Acosta.
Chambers of commerce in Nevada and Texas are already offering health plans to small business members through AHPs.
A similar approach is being looked at to help small businesses offer retirement plans, after President Donald Trump signed an Executive Order to expand retirement savings opportunities.
The need is there. "Only 14% of small businesses have set up retirement plans for their employees,” Acosta said.
Finding workers
Being able to offer more employee benefits will be great, but for many businesses their biggest challenge is finding workers.
Our strong economy has generated the rare instance of there being more job openings than job seekers. Along with that, many business can’t find workers with the right skills.
Addressing this challenge requires "changing the thinking about education," explained Administrator McMahon. "We need to work with our community colleges that are training for what jobs are needed."
As an example, she explained that BridgeValley Community College in Charleston, WV, partnered with Toyota on paid apprenticeships with classroom education. Students graduate with a manufacturing certification.
"I am encouraging small businesses to do the same things in their communities,” Administrator McMahon said.
Secretary Acosta noted the Trump administration created the Council for the American Worker to expand apprenticeship programs and encourage investment in worker training. Through it, businesses have already pledged to provide apprenticeships and training programs to almost 4 million workers.
Our strong economy has small business owners in a good place. If the federal government continues it work on pro-growth policies, they should continue smiling.
About the authors
Sean Hackbarth
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.
