As President Trump noted in this year’s State of the Union address, America is “at a moment of unlimited potential.” Since his election, America has created 5.3 million new jobs. Wages are rising, unemployment is dropping. And our economy is the envy of the world.
America’s 30 million small businesses are drivers of that economic growth. They create two out of three net new jobs in the private sector. Half the U.S. workforce either owns or works for a small business. Pennsylvania alone has 1 million small businesses, employing 2.5 million workers. This Administration is working hard to ensure they continue to succeed through five main initiatives – tax cuts, regulatory rollbacks, workforce development, healthcare coverage and modernized trade agreements.
Thanks to the Tax Cuts and Jobs Act, most small businesses can now deduct 20 percent from their taxable income even before they get into the savings from the lower rates. For the first five years, they can also fully write off any investment in new equipment the year it’s made. Last spring, I toured the Harrisburg’s Appalachian Brewing Company, which produces specialty beers and craft sodas. At the time, the facility was operating at only 15 percent capacity. Co-owner Artie Tafoya told me that the tax cuts had allowed him to look to the future and decide he’s ready to grow again. He wanted to add a huge new piece of equipment for the bottling process and said the tax cuts would allow him to write off that investment right away. The added capacity would enable him to create up to 30 more jobs. And he’s not alone. As I have traveled across the country visiting small businesses in all 50 states, entrepreneurs tell me they are responding to the tax cuts by investing in their companies and their employees – raising wages, providing bonuses and benefits and creating more jobs.
Under President Trump, costly, job-killing federal regulations are being cut. Often entrepreneurs tell me it’s not a specific regulation that puts a chokehold on their businesses, but the sheer volume of rules and mandates they must keep up with. Most small businesses don’t have teams of lawyers and compliance officers on staff. The CEO is often the receptionist, accountant and janitor, too, so regulations eat up a lot of time they just don’t have. For every new regulation created under this Administration, 12 have been eliminated. So far this has saved businesses $33 billion in compliance costs.
A third pillar is, in some ways, a consequence of our booming economy – workforce development. The unemployment rate nationally and in Pennsylvania is about 4 percent. The Bureau of Labor Statistics recently reported a record high of 7.3 million job openings. Many small business owners tell me they’d like to grow but they can’t find enough workers with the skills they need. President Trump has signed an executive order aimed at bringing employers, unions and schools together to develop apprenticeship programs and curricula. And he’s encouraging public-private partnerships to train students and workers with the skills employers need now and in the future.
Fourth, the President is working to make it easier for small businesses to offer health care benefits that until now have been largely unaffordable. Of the 44 million Americans who lack health insurance, 15 million of them work for small businesses or operate a sole proprietorship. The President has signed an executive order that would allow more employers to form Association Health Plans. Small businesses and the self-employed could unite through trade groups or chambers of commerce to purchase insurance in the large group market. They could leverage that economy of scale to access the same plans and lower rates larger employers have.
Finally, a major focus this year is on international trade. President Trump has signed the U.S.-Mexico-Canada Agreement, which offers three key benefits for small businesses. For the first time ever, the USMCA includes a chapter that specifically promotes small businesses and helps them understand the benefits of exporting. It includes the strongest intellectual property protections ever negotiated in a trade agreement, and it cuts the red tape and costs associated with getting IP protection. This is critical for companies needing to secure innovation and trade secrets. And the USMCA also includes a new chapter on digital trade that prohibits customs on things like e-books, videos, music, games and software that are distributed electronically. As of this writing, the USMCA still must be ratified by Congress, but simply put, it will encourage more goods to be produced in the United States and make it easier for small businesses to tap into foreign markets. The possibilities for entrepreneurship are endless.
We at the SBA like to say we power the American Dream. And nowhere is that dream more apparent than seeing entrepreneurs start or grow a small business of their own. The SBA gives entrepreneurs access to funding that can finance their launch or expansion; counseling or mentorship that help them chart their success; assistance in securing government contracting to expand their customer base; and help recovering from a declared disaster. The outlook for small businesses in America is bright, and the SBA is proud to be their ally and advocate.
*Administrator McMahon resigned from her role as SBA Administrator effective April 12. She returned to the private sector.
Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.