Small business owners worry effects of pandemic, federal legislation will slow recovery

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A survey by the Federal Reserve shows about three in ten small businesses say they may have to close in 2021 without additional help from the federal government. In Texas, the Small Business Administration says businesses with fewer than 500 employees account for 45% of all employment.

"Think about a big, national company, they've got teams of people dedicated to every possible situation that comes up. They've got R&D departments, they've got legal teams, they've got lobbyists," says Ian MacLean, the owner of Highland Landscaping in Southlake and the current Small Business Council Chairman for the U.S. Chamber of Commerce. "But small business owners, whether it's a husband and wife or three friends who go into a partnership, they don't have any of those resources."

MacLean says, during the worst of the pandemic, many small business owners were "adrift in a sea of information" from different sources. He says the U.S. Chamber worked with local chambers to simplify the process, showing small business owners how to apply for grants to buy personal protective equipment or make payroll. Many Chambers even posted templates for social distancing and capacity limit signs on their websites.

"I was sitting here and thinking, 'Do I have to have to take a class in graphic design to figure this stuff out?'" MacLean says.

According to Yelp, 487,577 businesses opened during the first year of the pandemic, from March 1, 2020 to March 2021. That was down 14% from the previous year, but many areas saw an increase in business openings.

Food delivery services increased 128% over the past year, landscaping businesses increased 42% and the number of food trucks increased 12%.

While additional small businesses have been opening, MacLean says many owners are now worried about federal legislation that would increase the minimum wage. The U.S. Senate will begin debating a plan to increase the minimum wage to $15 this week.

"If we're going to more than double the minimum wage almost overnight, small business owners' heads will explode," MacLean says. "How am I going to pay for that?"

If the minimum wage is increased, MacLean says large businesses work on a large enough scale to make up the difference by increasing prices a few cents. He says small businesses would have to increase prices more dramatically.

MacLean says an increase would have a "tsunami effect" on everyone who works at a company, saying if he has to pay a high school student working part-time $15, full-time workers who have been with him for years would expect a corresponding raise.

Instead, he says the government should work more closely with school districts to ensure kids graduate high school with a skill they can use in the workforce.

"I'm interviewing people with a college degree in landscape construction, but they can't walk out and identify the most common shrubs and trees in our industry," MacLean says. "A college education is trending toward making itself irrelevant because we are lacking a huge sector of our economy, which is people who do skilled labor. That's electricians, mechanics and plumbers."