OPINION:
According to the most recent data from the Small Business Administration, there are almost 725,000 small businesses in Virginia. They employ 1.5 million of the approximately six million voters in the state. Small businesses there make up about 47% of all private-sector employees and 99.5% of the firms in the entire state.
In this month’s victory in the race for Virginia’s governor, Glenn Youngkin received a total - a total - of about 1.7 million votes, beating out his opponent by about 70,000 votes.
See the relationship?
In Virginia, like the rest of the country, both small business owners and their employees are frustrated with where things are heading. They are frustrated with the current Democratic leadership both in their state and in Washington.
Immediately upon taking office, President Joe Biden took it upon himself to roll back nearly all of former President Donald Trump’s executive orders, many of which sought to reduce excessive government regulations. That did not bode well for businesses. The Democrats’ have also been trying to push legislation through Congress to increase the power of unions, limit the ability to use independent contractors, and they have championed trillions in stimulus payments that were either paid for by taxes or more deficits.
All of these anti-business policies were noticed by small business voters in Virginia. And those voters, struggling to recover from a global pandemic and dealing with both economic and COVID-rules and mandates, are frustrated.
Faced with staffing shortages, supply chain problems and rising costs, small business owners are clearly not happy with the way things are going. “It’s supposed to be getting easier,” the owner of a pizza shop in Stafford said in a local news report. “It’s not. It’s getting a lot harder.” The owner wound up closing his shop after four decades of operation.
Countless other businesses in the state have had to curtail their operations due to staff shortages, which many feel were exacerbated by stimulus and other programs supported by the Democratic party that continue to keep workers at home. “People are working long shifts,” the owner of a restaurant in Virginia Beach said in August. “It’s not easy. We jockey the schedule as much as we can to keep people from being overworked, but unfortunately, that doesn’t always happen.”
Those same business owners in the state, faced with rising costs of supply, are also looking at an enormous jump in the state’s minimum wage from $7.25 last year to $11.00 per hour starting in just two months. “I don’t feel good about it; I really don’t,” a small retailer who had already bumped up wages for existing employees and now must match social security payments said in a recent local report. “For small business, where does it come from?” The state’s minimum wage will reach $15 per hour by 2026.
And while Virginia has always placed high on surveys for one of the best states to run a small business (primarily due to its proximity to universities and a more skilled labor pool), it was also recently ranked as one of the worst states to start a small business mostly due to its high level of business costs.
All of these facts helped push Mr. Youngkin over the finish line. That’s because while his opponent continued to support Democratic policies that were seen to negatively impact the economy and hurt small businesses, Mr. Youngkin - a former CEO at a private equity firm - ran on a platform of lower taxes and reduced government regulations. His plan includes lowering income taxes, eliminating the state’s grocery tax, and suspending a recent gas tax hike for one year.
It’s why he received endorsements from major business groups in the state, including the National Federation of Independent Business Virginia PAC (NFIB), the Associated Builders and Contractors Virginia (ABC-VA), and the Virginia Contractor Procurement Alliance (VCPA) with the NFIB’s state director saying that his commitment to enacting tax relief for small businesses, protecting workers from forced unionization or the loss of their jobs and creating a reasonable regulatory environment “makes him the clear choice for Governor.”
He now is governor-elect.
The question is whether our leaders in Washington will finally take note. The Democratic party does not have a mandate. They have a razor-thin majority in both houses of Congress and a president whose poll numbers have precipitously dropped. If the Democrats plan to continue supporting more deficits, higher taxes, excessive worker demands and increased regulations on businesses, then my bet is - like the 1.7 million businesses in Virginia - the nation’s 30 million small businesses will register their disfavor next November.
• Gene Marks is a CPA and owner of The Marks Group, a technology and financial management consulting firm that specializes in small- and medium-sized companies.
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