Gem State Wire

Small businesses face numerous challenges as Labor Day approaches, with many confronting significant hurdles in maintaining operations. The COVID-19 crisis has left lasting issues, further strained by supply chain disruptions, inflation, and persistent worker shortages. When the National Federation of Independent Business (NFIB) surveyed its members, 91% reported extending their working hours to cope with the labor shortage.

Recent federal and state regulations contribute to these challenges. The Corporate Transparency Act, seen as demanding by many, requires small business owners to register their personal information with the Financial Crimes Enforcement Network. Jeff Brabant, the NFIB’s vice president of federal governmental relations, highlighted the potential consequences: “More than 32 million small businesses are facing potential ruin — not just of their livelihood but also of their personal freedom.”

The uncertainty surrounding tax legislation further weighs on small business owners. The temporary 20% small business tax deduction from the 2017 Tax Cuts and Jobs Act is set to expire, unlike the permanent reductions for larger corporations. NFIB President Brad Close warns of the potential impact: “If lawmakers allow that to happen, Main Street will face an unprecedented tax hike. At least half of the nation’s small businesses are uncertain about their future.”

State governments are also implementing regulations impacting small businesses. California requires Workplace Violence Prevention Plans, and its varying minimum wage rates depend on occupation and location. While some benefit from these wages, young and unskilled workers may find fewer employment opportunities.

Idaho offers a contrasting approach by aligning its minimum wage with the federal rate, preventing local variances. This policy has been highlighted as effective in simplifying wage structures for businesses.

Despite the challenges, the importance of small businesses to the economy remains critical. Their vitality is essential for sustaining a robust economic environment.