This post appears here courtesy of the Carolina Journal
. The author of this post is Theresa Opeka
Small businesses, like Captain Stanley's Seafood Restaurant in Raleigh, are vital to the U.S. economy. So much so they are called the "backbone of America."
The restaurant has been a fixture on South Wilmington Street in Raleigh since 1986.
Small businesses with 500 or fewer employees make up 99.9% of all businesses in the U.S. and 99.7% of firms with paid employees, according to the U.S. Small Business Administration. They also created 62% of the new jobs in the country between 1995 and 2020.
Vice President Kamala Harris was in Raleigh earlier in the week touting the Biden administration's role in helping small businesses over the last two years. She said supporting them was a priority because "they are contributing to the economic health of our nation in a profound way,"
adding that they employ half of the nation's workforce.
She went on to say that despite the economic concerns with inflation, now is a great time to start a small business due to all the work the Biden administration has done in order to get funding for more small businesses in terms of loans. The administration also claims that more Americans have applied to start a small business in the past two years than in any two years on record.
The rosy picture is in stark contrast to the experience of those like Heath Stanley, general manager of Captain Stanley's, have experienced.
Stanley told Carolina Journal in a phone interview Thursday that the last two years have been anything but good for the business.
"Labor costs are up, and food costs are way up,"
he said. "Price increases across the board make profitability diminished. [I'm] trying to find hourly workers or salary workers that are cost-effective to employ."
Stanley told C.J. that business isn't as predictable as it used to be and blames a portion of it on the new work environment due to COVID restrictions.
"The business environment is kind of isolated,"
Stanley said. "The workers aren't all coming to the office because of COVID restrictions, and they're not all in the office on the same day. They used to all come out together, so you don't have as many large groups coming out together."
But the main concern for the restaurant has been the rising costs. Unfortunately, Stanley said inflation has caused the restaurant to raise prices much like everyone else these days, and he is seeing it affect his customers, particularly senior citizens.
"I would say it's cutting into their disposable income considerably,"
Stanley said. "They may do something like split plates. They'll do a lot of plate sharing, stuff like that."
Stanley isn't alone in seeing the effect of inflation since the Biden administration took over.
Forbes.com recently published an article that highlighted a Small Business Inflation Study done by Biz2Credit. They analyzed the revenues and expenditures of more than 140,000 U.S. small businesses from January 2019 to October 2022. They determined that small businesses have to work harder and have to sell more to attain the same level of wealth.
"The Biden administration has ushered in one of the most difficult economies ever for small-business owners across the country, so for Vice President Harris to come here to N.C. to take credit for the business-friendly environment Republicans have created here over the last decade is completely disingenuous,"
said Michael Whatley, chairman of NCGOP, in an emailed statement. "This administration has done nothing but strangle small businesses with historic inflation, record fuel prices, spiking interest rates, and crippling worker shortages - that's the Biden agenda in action."
U.S. Rep. Roger Williams, R-TX, chairman of the House Committee on Small Business, and a small business owner, called Harris' visit to North Carolina a P.R. stunt.
"Sky high inflation, worker shortages, and supply-chain disruptions are nothing to celebrate,"
Williams said on the House floor. "I have been a small business owner for 52 years and the reality is small businesses are worse off due to this administration's disastrous policies and out-of-control Washington spending. No amount of media events will change the dire reality Main Street continues to experience under this administration's two-year crackdown on job creators."
Williams added that more needs to be done to unleash the full potential of Main Street, and that the direction must change before anyone goes on a "victory lap or asks for a trophy."
The NCGOP tweeted a graph from the National Federation of Independent Business that shows the NFIB Small Business Optimism Index declined 2.1 points in December to 89.8, marking the 12th consecutive month below the 49-year average of 98.
According to experts, 2023 isn't looking much better.
Bill Dunkelberg, chief economist for The National Federation of Independent Business' research center, said in a tweet, "Overall, small business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate."
Stanley said it would be great to get everybody on board with the same mindset and get people back to work.
"We're spending so much money anyway on keeping people out of work; I don't see why they just couldn't put that money towards incentivizing work for the able people,"
Stanley said. "Help small businesses somehow, ease payroll taxes, and fix the supply chains and get some of the food costs down."
Stanley also said the government should focus more on America and not on overseas issues.
"Stop sending all of our capital overseas,"
he said. "Get our factories and production back up to where it needs to be and get our labor force back to being motivated. That would do wonders for our economy."