What Nevada, S.C. Small Businesses Have in Common
(This post originally appeared on Fox Business)
Could any two states be more different than Nevada and South Carolina? One is known for its Southern hospitality, tall trees, sub-tropical heat and its long and bloody history that goes back well before the Civil War. The other is known for its desert climates, legalized prostitution and gambling — and a Western outpost built by gangsters and cowboys. These are two very different states, made up of very different types of people.
And yet, these states – with capitals more than 2,600 miles apart, share one big thing in common: Their combined 125,000 small business owners. Yes, these entrepreneurs share one other big thing in common. It is something that both the Democratic and Republican presidential hopefuls had better understand.
That one thing is people.
Ask any business owner what the most important asset is to their business, and the reply will almost always be their employees.
“You are only good as your people,” you’ll hear them say. And they’re right. Companies are made up of people, and the most successful ones have the best people working for them. Small businesses struggle to find good people and then keep them motivated. They are in competition with larger companies offering more benefits. And business owners across the country struggle with training and developing skilled workers.
In South Carolina, Nevada (and the rest of the country) the cost of hiring and keeping good people is becoming more and more prohibitive — so much so that it’s become a significant issue to small business voters. And that’s because the government, in recent years, has been hurting their efforts.
The national rise in minimum wages is very much on their minds. This year, thirteen states will be increasing their minimum wages with another eight considering measures. Nevada’s minimum wage is on the lower end at $8.25 per hour and South Carolina has no state mandated minimum wage. Will this change? The pressure is on.
“The cost of living in this part of the country is lower than other parts and a broad $15 per hour increase ignores this fact,” says Kevin Pickens, President of Prime Line Digital, a South Carolina technology firm. His company has a unique program for training newly-graduated college students that starts at $10 per hour with the potential of much higher increases as the trainees progress. “If minimum wage goes up to $15 per hour, it would kill this program,” he says.
Justin Ivory, the owner of a twenty-person steel manufacturing business in Nevada worries about workforce development.
“We are a non-union company that trains its own entry level employees and it’s hard to find experienced people,” he says. Regulations that require paid time off, overtime and especially immigration reform impedes his business. “The construction industry relies on immigration for workers and we need a real (immigration) process that allows us to fulfill our positions, not just an executive order.”
South Carolina’s poverty rate is among the worst in the country, posing challenges to employers there to find good, skilled workers and compete with the larger companies that do.
“We have significant job gaps, and we must move quickly to fill them or the projected job growth won’t occur because there won’t be an available workforce to fill them,” said Mary Graham of the Charleston Metro Chamber of Commerce
And of course, there’s healthcare.
“I would like to provide health insurance to my employees,” says Brock Ohlson, a lawyer and Certified Public Accountant in Las Vegas, “but it’s just too expensive which makes it impractical.”
Healthcare expenses rank highest amongst the top of concerns for small businesses in both states. Both Nevada and South Carolina businesses are looking at 10% and 14% increases in their health insurance rates respectively in 2016.
Kristin McMillan, who runs the Las Vegas Metro Chamber of Commerce, sees this a lot.
“While proposals such as raising the minimum wage or mandating businesses provide health insurance may win political points, they can be very costly to small businesses and impede their ability and desire to create jobs,” she says. McMillan is also concerned about the quality of the state’s future workforce. She believes that in order to innovate and grow they need more skilled employees, particularly in the STEM disciplines.
The business owners in both states face people issues that are common to so many others around the country. Even though many are still feeling “successful,” according to a study conducted at the end of last year by The Hartford, 64% have not hired new employees in the past 12 months, stating reasons from “can’t afford it” to “not growing” to “concerned about healthcare costs.”
What can the candidates do? It’s obvious that small business owners are pleading for less regulations when it comes to their employees. And more investment wouldn’t hurt.
Nevada was hit hard by the last recession, and its effects stung many small businesses there. But Las Vegas has recovered and construction is booming. It’s different in South Carolina, where there has always been a greater struggle with higher levels of poverty than the rest of the country.
Andy Brack, the editor and publisher of the Charleston Current, laments that many small business jobs are low-wage, low-skilled and not upwardly mobile. “More incentives are needed to bring in larger companies in order to grow their economy and attract better workers,” he wrote – like the recent announcement by a European company that it would expand operations in one county with a $230 million investment. It was “a win-win because it was outside investment and community development of an existing industry.” All business, whether big or small, matters.
“It’s frustrating to see business demonized,” said Margaret Cavin of J&J Mechanical in Sparks, Nevada. “We’re the ones creating jobs and taking the risks.”