Blaine’s Bulletin: National Small Business Week 2023
Washington, May 5, 2023
Tags: Small Business
As you’ve heard me say time and time again, small businesses are the heart and soul of towns here in Missouri and across America. They’re started by people who bet on themselves and put faith in their friends, neighbors and community to support them and help keep their doors open. During the pandemic, these treasured local spots were some of the first to feel the effects of the shutdowns, and our nation rallied around them to try and save as many as possible. The pandemic was a trying time for many reasons, but it was also uplifting to see all the good there is in our country as Americans nationwide sought ways to support the small businesses that make their communities great.
But small businesses aren’t just feel-good success stories– they play a critical role in our economy and labor force, accounting for almost half our national payroll and employing roughly 62 million Americans. Especially in small towns and more rural parts of America like much of the Third District, small businesses are relied upon to keep local economies going and provide good jobs.
While the pandemic is long over, small businesses are unfortunately still facing some economic headwinds. The latest studies show that inflation remains the biggest issue facing businesses. For small businesses who don’t have the size to absorb those costs, that means raising prices or cutting services. In the worst scenarios it means layoffs or lower wages. There are literally no good options.
Besides inflation, I’m also keeping a close eye on small businesses’ ability to obtain adequate and affordable lines of credit. The Federal Reserve has attempted to fight inflation – which should also be done with less government spending – by raising interest rates at the fastest rate since the 1980’s. The Fed has a mandate to pursue price stability which, according to the St. Louis Fed, means that inflation remains low and stable over the longer run. Interest rates are its only tools to achieve that. However, higher rates also mean higher costs of capital – just like mortgage rates go, up so do the rates on loans. These loans are often critical to the health of small businesses and their ability to flourish. This brings me to my next point, the Consumer Financial Protection Bureau – one of the most concerning government agencies in Washington – has proposed a regulation to make it more difficult for small banks and lenders to provide small businesses with the services they need. The regulation would force these smaller financial institutions to comply with excessive data collection and impose significant compliance costs for the small businesses they work with. So, on top of inflation and higher interest rates, small businesses could face new compliance costs the next time they need a loan. To push back against this horribly misguided regulation, I have introduced a three-bill package with Representatives Hill and Williams to protect small businesses and the smaller financial institutions they do business with from unnecessary government overreach.
This week is National Small Business Week, and a great reminder to support small businesses in your area. Small Business Saturday in November – right after Black Friday – is easy to remember, but these businesses need the support of their communities all year long. Whether it’s your family’s favorite restaurant, a barber shop, ice cream store, florist, hardware store or gift shop – small businesses serve all sorts of purposes and often have unique products or services you’d have a hard time finding elsewhere. And when you shop local here in Missouri, you’re investing in our state and contributing to our economy’s health while supporting local entrepreneurs and the people they hire. It’s a win-win.