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Small businesses struggle as inflation persists - YouTube
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the u.s commerce department reported
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last month that major corporations were
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extremely profitable in 2021 but a
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recent survey by goldman sachs finds 80
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percent of small business owners say
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their business has suffered over the
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past six months due to record high
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inflation the pandemic and the war in
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ukraine have also been driving factors
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in rising costs small business owners
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say they are struggling to compete with
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large corporations for more i want to
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bring in cbs news reporter sarah ewald
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weiss sarah i know you have been
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covering this first of all how has
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inflation changed the way that small
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businesses operate in the u.s compared
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to large organizations and are these
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changes likely to subside in the future
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hi elaine i think whether these will
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subside in the future really depends on
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how long these soaring prices last if
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inflation continues long term
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it'll be hard to sustain but we do know
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from this survey is that a vast majority
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of small businesses are now feeling the
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pain of inflation after two years of
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challenges first the pandemic and
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shutdowns worker shortages now we have
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rising costs to contend with as well for
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our small businesses across the country
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and when it comes to inflation they've
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tried to combat it in multiple ways one
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thing they're doing is they know that
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their workers need to be paid more money
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to deal with the rising prices when
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they're at home so one thing they're
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offering is higher wages in some cases
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other things are offering at higher
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wages to find more workers in other
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cases but one thing that stood out to me
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is that about 60 percent of these small
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businesses said when they're offering
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higher wages or trying to entice workers
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with higher wages they're passing those
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uh increases off to consumers so the
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small businesses are feeling it and
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they're passing it on to consumers as
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well what's probably very frustrating
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for many of these businesses and some
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that i spoke to is the fact that while
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they're trying to make ends meet here
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after two years of challenges they're
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seeing the biggest corporations in the
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country having record profits and one
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business owner told me she doesn't have
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those kind of profits she can barely
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make ends meet um she know you know one
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thing that this same business owner told
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me is the energy cost the rising energy
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costs are one of her biggest challenges
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her employees have to travel for work
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it's a business that goes into clients
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homes and so one of the things she was
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trying to do was give out gas cards to
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her employees so that gas costs weren't
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eating into their wages
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and then when that didn't work she was
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one of the businesses that realized this
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was a long-term issue so they changed
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their their budgeting they increased
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prices for services and they gave their
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workers a raise to help contend with the
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challenges of rising gas prices and
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other costs across the board yeah well
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in addition to inflation you wrote about
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how small businesses are also facing a
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number of other challenges right now
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what are some of those challenges
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yeah so we've been talking about this
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for some time and the main issue that
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still is probably the biggest challenge
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according to the survey for small
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businesses is hiring and retaining
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qualified workers we talked about the
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great resignation uh during this
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pandemic and the recovery from the
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pandemic turns out it's more of a great
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reshuffling as people go to jobs with
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higher wages so these small businesses
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are dealing with a lot of issues there's
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a record 11 million job openings across
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the country and they're trying to
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compete for these workers uh that means
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raising wages for one thing but there
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are other issues at play here that small
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business really cannot contend with of
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course paying workers more is great for
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the workers but when it comes to these
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small businesses the other real
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challenge is benefits um you know big
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corporations can offer even if they're
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only making small increases to wages
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they can also also offer benefit
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packages and this is an issue that small
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businesses had before the pandemic
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competing with big companies who can
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offer health care who can offer child
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care and other benefits and retirement
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benefits that they can't
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and so they're dealing with that
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challenge while trying to get these
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workers and one business owner told me
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basically she's trying to bring someone
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in from corporate america to her small
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business uh the person is wants to go
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there but when they did the math
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together she found out she'd have to pay
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this person 12 000
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more to cover the benefits that she
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would not have as a part of this tiny
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company
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as if she came over from corporate
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america so that just goes to show uh
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they're trying to bring in workers as
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their biggest challenge and they often
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just cannot compete so then how is it
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that they are coping these entrepreneurs
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and is that sustainable
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you know it really depends i mean if
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they can't find workers and they keep
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offering higher wages it really goes to
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the question of well how good is
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business going to continue to do we also
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have the questions of uncertainty
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involving inflation we don't really know
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how long it'll last there's a lot of
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factors at play here with supply chain
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issues with the war in ukraine so
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there's a lot of different things to
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contend with wages are one thing we are
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seeing an increase of they're trying to
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offer other perks like i said gas cards
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to try and get workers in the door but
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it really is a challenge um and that
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that becomes a question of how long is
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it sustainable and right now we just
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don't know we know that small businesses
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are such a driver when it comes to the
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engine of the economy so sarah what
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about the federal government what could
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the federal government do in order to
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level that playing field between small
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businesses and large corporations going
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forward
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well this was one of the interesting
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things because the small businesses as a
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part of this survey the vast majority
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more than 85 percent said they want the
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federal government to do more uh to help
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level that playing field to help them
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compete uh as one person put it they're
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not asking for a handout they're just
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asking for help to like set the set this
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playing field for them uh with these big
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companies and so one of the things that
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they're calling on is for congress
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specifically to do more um congress
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obviously a lot of different uh players
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in the game there and we have seen
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multiple proposals when it comes to
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benefits for child care making more
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child care affordable
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making health care more affordable
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having health care options and those are
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things that will help some of these
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smaller businesses compete i'm told it
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really becomes a question of well can
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any of that get through congress and
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that's on the benefits side of thing
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there are other things also that the
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federal government can't do obviously in
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terms of inflation one factor in this is
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the federal reserve they're the primary
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group of people the fed officials are
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the ones who are going to really address
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inflation short term and that comes in
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the form of raising interest rates uh
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kind of a funky thing to do raise prices
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to lower prices but that's one thing
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that we're going to see throughout the
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course of this year that'll help combat
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inflation but then on the other hand you
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have the federal government working to
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help with supply chain bottlenecks
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working to deal with some of the other
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challenges that are helped driving
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inflation some of the gas costs that are
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escalate or increasing across the board
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um so there are a lot of different
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things that are a part of this there's
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no real one
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fix all when it comes to helping small
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businesses and i think it'll still take
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some time before we figure out what is
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the one thing that could help the most
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uh right now there's just a lot of
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things going on that they're trying to
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get it really it sounds like a host of
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challenges that these small business
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owners are facing all right sarah ewald
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why sarah always good to see you thank
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you
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thanks elaine
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