by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
Inflation continues to wreak havoc on small businesses. The percentage of small business owners reporting inflation as the biggest business problem is at the highest level since 1980.
Expectations have dropped each month this year and in June, Small Business Optimism as measured by the National Federation of Independent Business (NFIB), tanked again. Small business owners expecting conditions to improve over the next six months is at the lowest recorded level.
Nearly 70% (seasonally adjusted) of small business owners are raising average selling prices. Over the last year, price raising activity has surged, “reaching levels not seen since the early 1980s when prices were rising at double digit rates” according to NFIB.
In retail, 80% (unadjusted) reported higher average prices. In transportation and construction, 78% and 75% of owners reported higher average prices.
Overall 48% (seasonally adjusted) of business owners reported raising compensation. Unfortunately, higher wages have not made workers better off due to inflation.
Small businesses are crucial to our economy as they allow hardworking entrepreneurs to escape poverty and provide jobs to local communities.
Reckless federal government policies created inflation that threatens to tear down Main Street. Washington damages business life and optimism through its policies that discourage work, expand welfare, bailout unions, and deficit spend.
NFIB leader Brad Close understands that solutions are found in the states, not in Washington. Close stated in a recent op-ed: “Only in Washington does it make sense to saddle the small business economy with new taxes and mandates. … If Congress doesn’t have any good ideas, they should look to the states for pro-growth solutions.”
The federal government’s attempts to interfere in the workforce have long been counterproductive. The government cannot consider itself more knowledgeable to business needs than business owners themselves. It’s time to stand aside and let business flourish.
Here in North Carolina, small business relief is a priority. North Carolina’s sluggish growth before 2013 has been reversed thanks to fiscally conservative leadership. Restrained spending and tax cuts allowed the state to prosper. The latest personal income tax reduction, once fully phased in, will result in our state boasting the fourth lowest rate in the nation, among states that levy the tax.