CNN analyst Matt Egan said mom-and-pop stores are reeling from surging import costs, rising inflation and a stressed-out workforce.
Enten reports Doug Scheffel, owner of a family-run ETM Manufacturing in Massachusetts, “laid off about a quarter of his employees in April as the Trump administration’s haphazard tariff rollout dented demand for the machine parts and sheet metal” his company sells.
“Everyone is hunkering down and building up cash. It’s never been this bad,” Scheffel told CNN. “It’s very uncertain and impossible to plan in this environment.”
Egan said small businesses comprise the vast majority of total businesses in the nation, as well as nearly half of all employees and most job growth. But the average rate on a new urban small business term loan is now well north of 10 percent, up from 7 percent at the end of last year, which Scheffel called “infuriating.”
Additionally, Scheffel said high prices at the grocery store and elsewhere are distracting employees.
“They’re worried about putting food on the table and buying shoes for their kid,” Scheffel said. “Bad stuff happens when they’re not totally focused.”
Other business owners are livid at the cost increase for providing employees health insurance, with CNN reporting the average cost of single coverage health insurance surging by 120 percent for companies with fewer than 50 employees.
“It’s unbelievable how much healthcare has gone up,” said Bryan Pate, CEO of San Diego-based PT Motion Works. “It’s an unfair barrier to hiring.”
And all that combines with pressure from President Donald Trump’s historic tariff hikes,” with Pate telling CNN that, “we just don’t know what the guy is gonna do. It creates so much anxiety and time-wasting.”
They’ve even managed to cost Americans jobs, with Pate having to end contracts with seven San Diego assembly workers and move that work to Mexico to cut costs. And he’ll still have to raise prices on his products to offset Trump’s 20 percent levy on imports from Taiwan.
“China, Mexico and Canada don’t pay [the tariffs]. I’m the one that’s paying for it,” said Troy Rackley, CEO at Florida-based The Next Level of Performance. “I pay taxes on my income, and now I have to pay additional taxes on what I bring in.”
On top of al that, Khari Parker, co-founder of Connie’s Chicken and Waffles in Baltimore, says Trump’s crackdown on immigration is shrinking his company’s labor pool. CNN reports the U.S. construction industry is also feeling the pain.
“A lot of the workforce is nervous from all the stuff going on with immigration,” said Antonio McMillion, president of Maryland-based developer MFP Management & Construction, which has been forced to hire more expensive workers, raising their labor costs on some projects by up to 40 percent for their U.S. customers.
“Hopefully we can pass on the price to the client, but that could also mean you don’t get the job,” said McMillion.
Read the CNN report at this link.