Small Businesses Brace for Recession in Biden Economy
As the United States continues to recover from the COVID-19 pandemic, the ongoing economic crisis continues to take a toll on small businesses across the country. Many mom-and-pop shops and local restaurants have been struggling to survive as rising prices, labor shortages, supply chain disruptions, and other factors have contributed to a decrease in revenue and profitability. In this article, we will explore the challenges facing small businesses in the Biden economy and what can be done to support them.
The Plight of Small Businesses in the Biden Economy
Small businesses have always been the backbone of the American economy, providing jobs, goods, and services to local communities and contributing to economic growth. However, the past two years have been particularly difficult for these enterprises, as they have faced numerous challenges that have threatened their viability and profitability.
Skyrocketing Prices
One of the primary challenges facing small businesses in the Biden economy is soaring prices, which have increased significantly in recent months due to a range of factors, including supply chain constraints, rising energy costs, and increasing demand from consumers. This has made it difficult for small businesses to keep up with their expenses and maintain profitability.
Labor Shortages
Another major issue facing small businesses is labor shortages, which have made it difficult for them to hire and retain employees. This is partially due to the ongoing pandemic, which has made many workers hesitant to return to in-person work, but it is also the result of other factors such as competition from large corporations and the high cost of living in certain areas.
Supply Chain Disruptions
The global supply chain has been severely disrupted by the pandemic, with shortages of critical materials and products making it difficult for small businesses to obtain the goods they need to operate. Delays, increased costs, and other issues associated with disrupted supply chains have put many small businesses in a precarious position.
Rising Interest Rates
As inflation rises, the Federal Reserve has signaled that it may raise interest rates in an effort to combat rising prices. While this may be necessary to keep inflation in check, it could also have a negative impact on the economy as a whole, particularly on small businesses that rely heavily on borrowing to fund their operations.
The Fiscal Responsibility Act
To address these challenges, Congress is considering the Fiscal Responsibility Act, a piece of legislation that aims to combat inflation by reigning in government spending and supporting small businesses. The act includes measures such as tax cuts, regulatory reforms, and increased investment in infrastructure and small business development, all of which are designed to provide relief to struggling small businesses and boost economic growth.
The Voices of Small Business Owners
Small business owners across the country have been speaking out about their struggles in the Biden economy. In field hearings conducted by the House Ways and Means Committee, entrepreneurs have testified about the difficulties they face in keeping their businesses afloat. Below are a few examples:
Ashley Bachman, a mother of three children and the owner of a local restaurant in West Virginia, testified about how rising prices have made it difficult to keep her business going. “Our little restaurant has been bleeding money from all the rising costs and I don’t know how much longer we can continue with prices as they are,” she said.
Chuck Mills, owner and operator of his family’s manufacturing business in Oklahoma, highlighted the impact of labor shortages and supply chain disruptions on small businesses. “This economy is the most difficult economy I have dealt with in more than four decades,” he said.
Matt Livingston, owner of a small home construction business and family restaurant in Georgia, spoke about the challenges facing small businesses in rural areas. “Anyone who thinks this economy is thriving or the best it’s ever been obviously hasn’t been to my little town,” he said.
The Way Forward for Small Businesses
To support small businesses in the Biden economy, it is important to focus on policy solutions that address their specific challenges. This includes measures such as tax relief, regulatory reform, investment in infrastructure and small business development, and strategies to address labor shortages and supply chain disruptions.
At the same time, small business owners must be proactive in managing their businesses in a challenging economic environment. This may include diversifying revenue streams, investing in technology to streamline operations, and adapting to changing customer preferences and needs.
Summary
As small businesses across the country brace for a potential recession in the Biden economy, they face numerous challenges that threaten their viability and profitability. Rising prices, labor shortages, supply chain disruptions, and rising interest rates have all made it difficult for these enterprises to keep up with their expenses and maintain profitability. To address these challenges, Congress is considering policy solutions that aim to support small businesses, including tax relief, regulatory reform, and investment in infrastructure and small business development. At the same time, small business owners must take proactive steps to manage their operations in a challenging economic environment.
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WASHINGTON D.C. – “Closing for Business” signs may soon start appearing on America’s main streets, as small businesses increasingly brace for a recession. For more than two years, small businesses have faced multiple crises that have left them with fewer workers, smaller inventories, and less revenue, whether it’s skyrocketing prices, spiraling wages to stay competitive in the job market, disruptions in the of supply, labor shortages, or rising interest rates.
Jason Smith, Chairman of the Ways and Means Committee (MO-08) issued the following statement after the May jobs report:
“No matter where you go in America, small businesses need help. The Ways and Means Committee has taken to main streets across the country to hear from working Americans about how the Biden economy has devastated their communities. They told us how families have to take second jobs to pay the bills and that small businesses are struggling to hire workers, expand their businesses, keep products on the shelves, or in the worst case scenario, have to go out of business. Congress needs to focus on bringing relief to the Biden economy so that families, farmers, and workers can enjoy more of their hard-earned money and small businesses have the tools they need to expand, hire, and grow. An important step in that direction is the Fiscal Responsibility Act, legislation headed for the president’s desk that will help combat the current inflation crisis by curbing reckless spending and lifting more Americans out of poverty and into the workforce.”
Workers and small businesses in Biden economy crisis:
- Unemployment increased from 3.4 percent to 3.7 percent.
- The annual increase in hourly earnings (4.3 percent) is not keeping up with inflation (4.9 percent) or the 15.3 percent rise in prices since Biden became president.
- Inflation has already cost the average American family $10,000.
- GDP grew just 1 percent in the first quarter of 2023, forecasting a possible recession later this year.
- The majority of Americans (55 percent), including Democrats, believe that the United States is currently in a recession, according to the Winning the Issues poll.
- 1 in 6 retirees are considering going back to work, and 55 percent of retirees who went back to work did so because they needed more money.
In His Own Words: Small Businesses Are Struggling In President Biden’s Economy
At Ways and Means field hearings across the country, small businesses have testified how their families and small businesses are struggling under President Biden’s economic policies:
- West Virginia–Ashley Bachmanmother of three children and owner of a local restaurant: “Unfortunately, after COVID we have been hit by another crisis. The crisis of raising the cost of everything… Our little restaurant has been bleeding money from all the rising costs and I don’t know how much longer we can continue with prices as they are…” February 6, Field Hearing on the state of the American economy : Appalachian
- Oklahoma–Chuck Millsowner and operator of his family’s manufacturing business: “Labor shortages and supply chain problems, combined with inflationary pressures, have made this economy the most difficult economy I have dealt with in more than four decades.” March 7, Field Hearing on the State of the American Economy: The Heart
- Georgia–Matt LivingstonOwner of a small home construction business and family restaurant: “I’m not sure anything I can say will change the minds of those who think this economy is thriving or the best it’s ever been. Anyone holding those beliefs obviously hasn’t been to my little town.” April 21, State of the US Economy Field Hearing: The South
https://gop-waysandmeans.house.gov/chairman-smith-help-wanted-signs-in-store-windows-are-small-businesss-cry-for-relief-in-biden-economy/
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