(Washington, D.C.) – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) today convened a hearing to examine how the tight labor market is affecting America’s small business owners and what Congress can do to address these issues.
“The deck is stacked against small businesses in the competition for strong workers, because they lack the resources and capital to offer wages and benefits that compete with larger companies; they have limited access to training and apprenticeship programs; and they often require in-person work at a time when many workers want flexibility,” Cardin said. “If small businesses cannot find the workers they need, they cannot grow… Congress has a duty to our small businesses to support them as they confront these challenges, because our economy can only go as far as our small businesses take us.”
Small businesses drive new job creation in America—creating 12.7 million net new jobs from 1995 to 2020 compared to the 7.9 million new jobs created by large companies and currently employ nearly half of the private workforce in America. Despite the key role small businesses play as job creators and employers, small businesses have long struggled to compete with larger companies for workers.
These challenges have been exacerbated by the nation’s tight labor market caused by a myriad of factors such as workers’ shifting attitudes and expectations, a decrease in immigration, as well as a “great reshuffle” of workers in low-paying jobs leaving for better pay and benefits. According to a report from Goldman Sachs 10,000 Small Business Voices, 97 percent of survey respondents reported that difficulty hiring was affecting their bottom line, which was an increase of 17 percent from September 2021. The survey comports with the findings of a recent U.S. Chamber Foundation study, which found that turnover costs small businesses as much as $3 billion per year.
Cardin called for a multi-faceted approach as Congress works to address the workforce challenge, including increasing partnerships between all levels of government to better deliver workforce development training; leveling the playing field between small businesses and large businesses by expanding employee benefits such as paid leave; and growing our workforce by more intentionally including immigrant workers and returning citizens.
Cardin continued, “If the COVID-19 pandemic has taught us anything, it is this: the problems that small businesses face are difficult, but not intractable; and addressing them will take focused, intentional, and concerted efforts, but they are not insurmountable. The pandemic also confirmed that solving these challenges requires a multi-faceted approach, because there is no single solution.”