As a Maryland small business owner and the mother of a 4-month-old daughter, I am struggling with high inflation, supply chain problems, and now a shortage of baby formula – all thanks to President Joe Biden’s failed policies.
My small business, CR Construction Services, employs people in the Baltimore and Washington, D.C. areas specializing in construction and janitorial services. We work on facilities ranging from gyms to office buildings, providing whatever services the building owners need for property maintenance. In construction, we subcontract with some of the largest general contractors to provide specialized final clean and contract labor services.
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For a small business like mine, the practical impact of 8.3 percent inflation – the highest in four decades – is significant. The inflation rate masks the surge in gas prices, which have doubled in the past year and are now at an all-time high. The impact on my cashflow spending is obvious: Contracts are often priced out at least a year and in advance. And unless the contract has an escalation clause (which many do not), that highly-competitive-awarded bid now costs more, and it directly eats into the profit margin.
It is more expensive now than ever to operate heavy machinery and transport from job to job. Additionally, the cost of parts and supplies has more than doubled in many cases. Coping with the scarcity of parts caused by supply chain issues extend the length of projects by years.
These supply chain issues negatively impact my life outside of work too. The nationwide shortage of formula effects my infant daughter who suffers from colic. Transportation Secretary Pete Buttigieg, who is ostensibly in charge of fixing America’s supply chain problems, also has an infant, so his lack of urgency is hard to understand. Indeed, I am certain that Secretary Buttigieg and his husband are using baby formula, but as a member of Biden’s cabinet, I doubt Buttigieg is having any trouble obtaining the formula his infant needs.
The surge in prices – and the accompanying supply chain disruptions – was caused by the Biden administration’s record spending spree, starting with the $1.9 trillion American Rescue Plan, then the $1.2 trillion infrastructure bill and now an additional $1.5 trillion spending bill. The general public is not fooled by the Federal Reserve’s attempt to control inflation though monetary policy, when we know fiscal policy needs to meet the central bank’s efforts to render effective.
Additionally, the president has made it more difficult to produce gas domestically by shuttering the Keystone Pipeline, restricting the issuing of new drilling leases and other anti-energy policies that have led to fuel prices rising dramatically. The Biden administration is aggressively working to promote green technology that has not evolved to the point where it can replace the heavy equipment my company needs for our jobs. Their proposals include a green manufacturing plan that would involve the government using its purchasing power to force change and SEC climate disclosure rules that would likely have a substantial downstream effect on small businesses. These changes would add extra costs to companies already struggling with inflation.
The American Rescue Plan incentivized many people to stay home by providing them hundreds of extra dollars in monthly unemployment bonuses. Now that these bonuses have expired, workers want jobs that pay more than they made from unemployment benefits. I often can’t afford to pay these inflated wages if it is not demanded by the market, leaving me without enough workers to complete projects. In fairness to the administration, a workforce deficit existed prior to the pandemic, but the unemployment bonuses made things a lot worse. Instead of paying people to stay home instead of working, the administration should have invested in desperately-needed vocational programs while everyone was home with no work.
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The president seems to have failed Economics 101, judging by his utter neglect of small businesses’ problems. From the day Biden assumed office, his administration has acted as if it could just spend its way out of our problems. Instead, this irresponsible course has created an insatiable inflationary monster that damages small businesses and our entire economy.
The president still has time to make a sharp course correction. Abandoning inflationary spending and focusing on mending the broken supply chain would be a great place to start. If the administration doesn’t listen to small business owners, it can expect to see many Main Street businesses vanish.
Corina Morga is president and owner of CR Construction Services and a member of the Job Creators Network.