[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
A YEAR IN REVIEW: THE STATE OF SMALL
BUSINESS IN AMERICA
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
DECEMBER 12, 2023
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-033
Available via the GPO Website: www.govinfo.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
54-517 WASHINGTON : 2024
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MORGAN MCGARVEY, Kentucky
MARIE GLUESENKAMP PEREZ, Washington
HILLARY SCHOLTEN, Michigan
SHRI THANEDAR, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENT
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 3
WITNESSES
Mr. James R. Thompson, President, Board of Directors, Pal-Con
Ltd., Stephenville, TX......................................... 5
Mr. Daniel A. Grech, Founder and Chief Executive Officer, BizHack
Academy, Surfside, FL.......................................... 7
Mr. Nicholas Boyle, Chief Executive Officer, Northern Keystone
Towing and Recovery, Tamaqua, PA............................... 8
Dr. Tammira Lucas, Chief Executive Officer/Assistant Professor,
The Cube Cowork/Coppin State University, Baltimore, MD......... 10
APPENDIX
Prepared Statements:
Mr. James R. Thompson, President, Board of Directors, Pal-Con
Ltd., Stephenville, TX..................................... 35
Mr. Daniel A. Grech, Founder and Chief Executive Officer,
BizHack Academy, Surfside, FL.............................. 38
Mr. Nicholas Boyle, Chief Executive Officer, Northern
Keystone Towing and Recovery, Tamaqua, PA.................. 67
Dr. Tammira Lucas, Chief Executive Officer/Assistant
Professor, The Cube Cowork/Coppin State University,
Baltimore, MD.............................................. 68
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Carol Roth, Member/Partner, Intercap Merchant Partners, LLC.. 72
A YEAR IN REVIEW: THE STATE OF SMALL BUSINESS IN AMERICA
----------
TUESDAY, DECEMBER 12, 2023
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:11 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Representatives Williams, Stauber, Meuser, Van
Duyne, Mann, Molinaro, Crane, Bean, Hunt, LaLota, Velazquez,
Golden, Landsman, McGarvey, Gluesenkamp Perez, Scholten,
Thanedar, Chu, and Davids.
Chairman WILLIAMS. Okay. I would like to welcome everybody
and first of all say Merry Christmas, Happy Holidays to
everybody as we move into that season.
Before we get started I will lead us in the Pledge of
Allegiance followed by Representative Hunt from the great state
of Texas to lead us in prayer.
Would you please rise?
I pledge allegiance to the flag of the United States of
America. And to the Republic for which it stands, one nation
under God, indivisible, with liberty and justice for all.
Mr. HUNT. Please bow your heads.
Heavenly Father, we are just truly grateful for the
blessings of liberty and choosing our own way. We know, Lord,
that it is not easy to have freedom, and we ask for wisdom and
courage to do great things that we can just continue to live in
a great country. We ask that those winds of freedom continue to
blow around the world. We are with the people in Israel that
are still suffering from just horrendous attacks, and so we are
with them, and hostages and families. And we are grateful for
those that help defend that freedom, and have defended that
freedom, and will defend that freedom. So all this we ask in
your name. Amen.
Chairman WILLIAMS. Good morning to everybody. And I now
call the Committee on Small Business to order.
Without objection, the Chair is authorized to declare a
recess at any time.
I now recognize myself for my opening statement.
Welcome to our last Small Business hearing of 2023. I want
to thank our witnesses for being here today and I know all of
you traveled a long way to share your stories with us and we
greatly appreciate that.
This Committee serves as the voice for Main Street America
in Washington. The goal today and every day is to learn more
about the current state of small business from the people who
know it best, our nation's job creators. There is no doubt that
in a year like this one they have experienced many ups and
downs. Starting a small business is a definition of the
American dream and any American from any background can take a
risk, bet on themselves, and bring a new service or product to
the marketplace. Our economy is dependent upon small businesses
and our entrepreneurs should be celebrated every single day.
As job creators, small businesses are the engines of our
economy, accounting for over half of the payroll in half the
entire country. More importantly, they are the beacon of light
and extension of culture into each of our communities giving
back selflessly through their businesses with many of their
struggles often going unnoticed. I have been carrying on my
family business for over 52 years and I understand the highs
and the lows of being your own boss.
America's entrepreneurs have had to confront historic
challenges over the past few years--the COVID-19 pandemic, out
of control inflation, broken supply chains, high interest
rates, access to capital, and a national labor shortage. But as
small businesses have done countless times before, they endure.
Here on the Committee on Small Business, we have been
working to create an environment where small businesses can
thrive. Small business owners dedicate their lives and finances
to the products and services they bring to the marketplace.
Every business owner knows every extra hour of paperwork is one
less hour they can tend to their business operations. Every
inflated tax and extra dollar that could have gone somewhere
else and every job vacancy is one more a small business owner
must cover themselves.
As we listen to the state of small business in America, we
salute the entrepreneurs who continue to fight and give
selflessly back to their communities. We are eager to hit the
ground running in the New Year and enact policy solutions that
will help pave a path toward success for both now and in the
future.
Today marks our 20th Full Committee hearing of the year and
in each one we have heard about what small businesses are
enduring at any given moment. I wanted to have this hearing
today so we could specifically discuss the state of
entrepreneurship as a whole and think about the bigger picture
as we move forward in 2024. I am excited to have all of you
here today with us. I am very much looking forward to today's
hearing.
I ask unanimous consent to add a statement for this record
from a small business owner advocate entrepreneur and two-time
New York best-selling author, Carol Roth.
And without objection is so ordered.
And lastly, I would like to welcome Ms. Celeste Maloy, from
the great state of Utah, as the newest Member of the majority
on our Committee. Congressman Maloy is a fighter and came to
Congress to advocate on behalf of the district's families and
small businesses. We are excited to have her on our team and
look forward to working with her.
With that I yield to our distinguished Ranking Member from
New York, Ms. Velazquez.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. I'd also like to
thank all of our witnesses for traveling across the country to
be here with us today.
It is important that on occasion we hold hearings like this
to take stock and understand the landscape for small businesses
and the impact of our policymaking.
Over the last several years, small businesses have faced a
series of cascading crises from the initial COVID shock that
closed more small businesses than any other time in history, to
the following years of rising costs, supply chain disruptions,
and labor shortages. We understand that running a business has
been no easy task.
However, despite this array of challenges, our country's
small businesses are more resilient than ever and they are
helping to build a strong economy from the bottom up and the
middle out.
While there is no argument that many small businesses are
struggling, we must also acknowledge the clear positive
economic indicators we saw in 2023. First, we can all be proud
of the ongoing small business boom. So far this year,
entrepreneurs applied to start another 4,500,000 million
businesses accelerating even more from the record-breaking
years of 2021 and 2022.
Second, we have seen a significant drop in inflation
without a dramatic increase in unemployment--something that was
unthinkable prior to this year and a step in the right
direction toward a soft landing.
As a matter of fact, we have had 22 straight months of
unemployment under 4 percent, the longest stretch in 50 years.
While prices remain elevated, consumers and small businesses
are getting relief in key areas like gas prices. Hopefully,
price stabilization will give business owners the confidence to
make long-term investments and give the fed the wherewithal to
lower interest rates next year.
Finally, we cannot ignore last quarter's blockbuster
growth, initially at 4.9 percent and recently advised upward to
5.2 percent. The strength of our economy in the face of these
challenges has been propelled by many of the investments made
last Congress through legislation like the American Rescue
Plan, the bipartisan Infrastructure Law, the CHIPS and Science
Act, and Inflation Reduction Act.
Despite this year being messy and chaotic on Capitol Hill,
my hope is that this investment will give small firms the fuel
they need to grow to their full potential.
I would like to once again thank our witnesses for joining
us today and I yield back.
Chairman WILLIAMS. I will now introduce our witnesses.
The first witness here with us today is a dear friend of
mine and a true Texan, Mr. Randy Thompson. Mr. Thompson is the
president of the Board of Directors for Pal-Con Ltd., located
in Stephenville, Texas. Founded in 1995 by Mr. Thompson and his
sister, along with their mother and father, Pal-Con specializes
in manufacturing the services of gas turbine regenerators and
recuperators. Since its finding in 1995, Pal-Con has worked to
expand into new markets. In 2012, Pal-Con won the rising star
award from the Stephenville Chamber of Commerce. Mr. Thompson
graduated from Tarleton State University, home of the Texans.
And thank you for joining us today and we look forward to this
conversation ahead.
Our second witness today is Mr. Daniel Grech. Mr. Grech is
the founder and CEO of BizHack Academy located in Miami,
Florida. BizHack Academy, founded by Mr. Grech in 2017, is a
collective of marketing leaders who help businesses by
equipping them with the skills required for digital success.
Prior to founding his company, Mr. Grech was the VP of Digital
Marketing and PR at OfferCraft, a small software startup in the
hospitality industry. He also has years of journalism
experience working as America's desk reporter for Marketplace
at NPR from 2005 to 2009, and as a staff reporter at the Miami
Herald from 2000 to 2004. Mr. Grech is a recipient of multiple
awards including the PR News Platinum Award and his business,
BizHack Academy is a Stevie Winner from the American Business
as a Minority-Owned Small Business of the Year. Mr. Grech
earned his bachelor of arts from Princeton University, his
master's degree in Spanish language journalism while studying
in Argentina, and his master of fine arts from Florida
International University. Mr. Grech, thank you for joining us
today, and we look forward to the conversation ahead.
I now recognize my colleague, Representative Meuser, from
the great state of Pennsylvania, to briefly introduce their
constituent who is appearing before us today.
Mr. MEUSER. Thank you very much, Mr. Chairman.
It is my pleasure to introduce our next witness, my good
friend, Mr. Nicholas Boyle, from Tamaqua, Pennsylvania. Mr.
Boyle is the CEO of Northern Keystone Towing and Recovery
located right outside of Tamaqua in Frackville, in the heart of
Pennsylvania's Ninth Congressional. Mr. Boyle started his first
company, Boyle Electro Mechanical in 2010, just a few years
after graduating from high school. Today he continues to lead
Boyle Electro Mechanical and operates seven specialized
companies that range from information technology consulting to
towing and recovery. Mr. Boyle is also a dedicated community
volunteer serving on the Schuylkill County Planning Commission,
and as Vice President and on the board of the Tamaqua Area
School District. Really important roles being played in our
community. Mr. Boyle graduated from Pennsylvania College of
Technology, Penn Tech, great school in Williamsport within my
district, where he earned his Bachelor of Science in
Information Technology. Mr. Boyle embodies the spirit of the
America entrepreneur. He is continually innovating, continually
thinking, continually investing in his business and employees,
while creating opportunities for those throughout our
community. With such a diverse set of businesses and his years
of experience, Mr. Boyle knows firsthand how today's economic
headwinds are impacting small businesses like his across
America and provide valuable insight into the current state of
Main Street America.
I want to thank you, Mr. Boyle, very, very much, and all of
our witnesses for testifying before this Committee and I look
forward to today's conversation.
I yield back, Mr. Chairman.
Chairman WILLIAMS. Thank you. I now recognize the Ranking
Member from New York, Ms. Velazquez, to briefly introduce our
last witness appearing before us today.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Our final witness today is Dr. Tammira Lucas. Dr. Lucas is
the Founder of the Cube Cowork, the largest black women-owned
coworking space in the United States offering babysitting
services. She is a strong advocate for women in business,
especially moms, having cofounded the National Association for
Mom Entrepreneurs. Dr. Lucas is an author, speaker,
philanthropist, and Assistant Professor at Coppin State
University. She holds three degrees in business, including a
Doctorate of Business Administration. Thank you, Dr. Lucas, for
joining us today.
I yield back.
Chairman WILLIAMS. Thank you, again. And we appreciate all
of you being here today.
Now, before recognizing the witnesses I would like to
remind them that their oral testimony is restricted to 5
minutes in length. If you see the light turn red in front of
you it means your 5 minutes is up. You are done. Okay? As
concluded and you should wrap up your testimony. So we will be
aware of that. And if you hear this (gavel tapping) I am kind
of giving you a little heads up you are getting close to 5
minutes. Okay? All right.
I now recognize Mr. Randy Thompson for his 5 minute opening
remarks.
Mr. Thompson?
STATEMENTS OF JAMES R. THOMPSON, PRESIDENT, BOARD OF DIRECTORS,
PAL-CON LTD.; DANIEL A. GRECH, FOUNDER AND CHIEF EXECUTIVE
OFFICER, BIZHACK ACADEMY; NICHOLAS BOYLE, CHIEF EXECUTIVE
OFFICER, NORTHERN KEYSTONE TOWING AND RECOVERY; AND TAMMIRA
LUCAS, CHIEF EXECUTIVE OFFICER/ASSISTANT PROFESSOR, THE CUBE
COWORK/COPPIN STATE UNIVERSITY
STATEMENT OF RANDY THOMPSON, PRESIDENT OF THE BOARD OF
DIRECTORS, PAL-CON LTD.
Mr. THOMPSON. Thank you for inviting me to testify in front
of the Committee today on the state of small business from a
Texan's point of view.
Like the Chairman said, my name is Randy Thompson. I am the
president of Pal-Con, Ltd. in Stephenville, Texas. We build a
heat exchanger for improved fuel efficiency and auxiliary
equipment for emissions control for natural gas transmission
and the power generation companies. Our heat exchanger actually
reduced fuel consumption by up to 40 percent when installed on
a gas turbine. We are also proud to day that our heat exchanger
is 100 percent American made.
My company is strong. We have navigated all the challenges
put in front of us in recent years, but we clearly have
struggles we deal with every day--a workforce shortage, skilled
labor shortage, supply chain issues, taxes, and regulations.
We need workers. Erath County is home to about 44,000
people and we have a 3.4 percent unemployment rate. That is
nearly 1,500 people who are unemployed. There is no reason for
one single person to be unemployed in Erath County. Why do the
benefits of not working outweigh the benefits of working? That
is a little messed up. There are over 5,000 jobs that could be
done right now.
When I was younger, if I did not work, I did not eat. We
combatted some of our work issues using the USCIS program
earlier this year which got us to properly vet and hire
candidates from a couple other countries. That took about 30
days. Well, it has been 9 months since we have been able to get
anybody else so that did not work very well for us. So we have
significantly had to increase our wages across the board in the
last few years. Our payroll has increased over 40 percent since
2020. We believe that as our employees go, so do we and vice
versa. But sadly, increasing wages is not enough for us to win
this war on higher prices.
Being a small business owner in a thriving rural college
town has its own issues, too. The lack of affordable housing in
our area is often a deterrent for our candidates. We need all
levels of government to put more emphasis on the need for
affordable housing outside the metroplexes to draw in and keep
more people in rural areas.
The lack of skilled craftsmanship is going to be
detrimental to the U.S. economy. Where are the incentives for
students to learn a trade? All the years spent pushing college
on students have resulted in an unappreciation for the trades.
Pal-Con is roughly 90 percent blue collar workers and 80
percent of them are skilled craftsmen. Trade schools need equal
representation and the government needs to incentivize trade
school attendance in the same manner as any other post-
secondary education.
On the supply chain issue, the U.S. raw materials market
still seems to be lagging behind. Three years of COVID-related
restrictions had a negative impact on all our metal suppliers.
Most of our suppliers do not have any inventory to speak of,
and if Amazon can get it, why cannot they? It really hurts us.
We will not purchase foreign, inferior materials to make our
products.
I recently read that the U.S. metal fabrication industry is
facing major hurdles. It is my understanding that the iron and
steel manufacturing industry has declined nearly 40 percent in
recent years. The United States needs to strive for self-
reliance. We need to support domestic suppliers to support
domestic manufacturers.
Another issue is taxes. Small businesses and median income
families pay the majority of the taxes. Companies like Pal-Con
and our employees end up paying far more in taxes on a
percentage basis. If large corporations paid their fair share,
then median income families would pay far less. The current tax
curve is misaligned; it needs to be reworked to reflect the
current wages based on the current cost of living. The small
business sector and the median income families are seriously
underrepresented. We have no voice. We cannot afford lobbyists
or advocates. Tax breaks and loopholes exist in excess for
domestic and foreign-owned large companies while our clients
are tasked with mitigating the barrage of regulations as we
pressure with environmental, social, and government
requirements, Pal-Con Ltd. is a family-owned business with
family-based morals. We are currently being discriminated
against for project opportunities for not being a minority-
owned business. Race, ethnicity, gender, and so on should have
no bearing in determining who does the better job. We have met
all our clients' requirements over the years and we are
affiliated with more associations----
Chairman WILLIAMS. Time is up.
Mr. THOMPSON. Okay.
Chairman WILLIAMS. Thank you for your testimony.
Okay. Thank you for your testimony.
And I now recognize Mr. Grech for his 5 minute opening
remarks.
STATEMENT OF DAN GRECH, FOUNDER AND CEO, BIZHACK ACADEMY
Mr. GRECH. Thank you, Mr. Chairman, and the Members of the
House Committee on Small Business, for this opportunity to
testify.
My name is Dan Grech. I am the founder of BizHack Academy.
We are a South Florida company that trains small businesses, to
use modern marketing tools such as artificial intelligence and
digital advertising. Our 10-year goal is to help 10,000 small
businesses in the U.S. grow faster by 2027.
The Japanese have a principle called ikigai. Ikigai is the
intersection of four things: 1) what you love, 2) what you are
good at, 3) what you can make money doing, and what the world
needs.
Your ikigai is essentially your professional sweet spot. I
like to think of it as your professional love.
The subject of this testimony is my decade-long journey to
discover my ikigai and some of the lessons I learned along the
way.
I am a small business owner who serves small businesses. I
am the son of an immigrant from Spain and a public school art
teacher in Philadelphia. Eighty-seven percent of the business
owners we train are people of color, and many of them are
immigrants. We offer programs in English, Spanish, and Haitian
Creole. My background is as a Pulitzer Prize-winning, NPR and
PBS journalist. Ten years ago I lost my job in journalism. I
was unable to find another job in the media. I had lost my
first professional love. I had lost my ikigai.
I found a glimmer of meaning when I started teaching a
course in marketing at the local community college. Two years
later I took the entrepreneurial leap. I quit my day job and
started BizHack Academy. Over the past 7 years, we have taught
700 businesses how to run online ads. One of our students was
an 80-year-old CEO. I helped him log into Facebook for the very
first time. Seven weeks later he was running sophisticated ads
promoting his consulting business. Our average course
participant earns $29 in revenue for every $1 spent in ads.
Digital marketing is something every small business needs and
my team has proven it is something every small business owner
with the right support can do.
The theme of today's hearing is resilience. Like many
companies, BizHack went through a near-death experience at the
start of the pandemic. Before COVID we only offered our
training in person. After the lockdown we had to cancel all of
our classes. Overnight we were essentially out of business.
Today, BizHack has transformed itself into an online
training academy. Despite the economic headwinds, BizHack is
thriving. We offer free webinars on marketing to our community.
We run a scholarship program that has given $400,000 in tuition
relief to nearly 300 businesses. We launched a course on AI for
marketing that features guests from Microsoft, Apple, and
Disney. We received funding Miami-Dade County, an example of a
win-win public-private partnership.
On a personal level, the last few years have been trying
for me and my family. The ups and downs have taken a toll on my
health. It has made me less present for my wife and two kids.
Fast federal aid in the form of PPP and EIDL were a
lifeline to BizHack and so many other businesses. Thank you,
Congress, for coming together to sustain small businesses that
are the heart and soul of the American economy. We are so
grateful for your support.
I want to offer two recommendations to the Committee.
First, the government has an essential role in ensuring
that high quality and affordable training is available to every
small business and their employees. Unfortunately, much of the
current training that uses federal funds is either out of date
or out of touch. This Committee should explore how the SBA and
its educational arms can be modernized to meet entrepreneurs'
evolving needs.
Second, Congress must regulate generative AI to ensure that
its negative impacts are minimized. This mandate was missed
with social medial to disastrous consequences. When Congress is
writing that legislation, however, it must give small
businesses a seat at the table. Generative AI is the most
powerful tool for small business growth in a generation. Small
business advocates must help build the guardrails for AI so we
don't inadvertently cut short its positive potential.
I spoke earlier about searching for my ikigai, my
professional sweet spot, and I found it. My ikigai is to
partner with business support organizations, such as the SBA,
to provide training and marketing to businesses that could not
otherwise afford it. Six years in, BizHack is 2/3 of the way to
our ambitious goal of transforming the lives and futures of
10,000 small business owners. Thank you to the Committee for
all that you do to support that mission.
Chairman WILLIAMS. Thank you.
And I now recognize Mr. Nick Boyle for his 5 minute opening
remarks.
STATEMENT OF NICK BOYLE, CEO, NORTHERN KEYSTONE TOWING AND
RECOVERY
Mr. BOYLE. First I would like to express how grateful I am
to sit here before you today. As an American patriot, this is
an amazing honor to testify before you and I thank you for the
invitation.
With the help of an amazing management staff, partners, and
supportive family, I operate seven businesses in Pennsylvania.
Those businesses cover a broad range of industries from
information technology consulting, long-term property rentals,
towing and transportation, excavating, equipment and tool
leasing, and land and project development. We have operated
such diverse companies out of my paranoia that in the event of
a shaky economy the fork would not fall out from beneath all of
them.
This Committee represents the backbone of the American
economy, and I hope today I can provide you with some good
information for future legislation.
I would like to cover two topics today, one being
interstate commerce and real estate revitalization.
Our towing company is in its infancy. We are coming up on
our 2-year anniversary and we are currently operating eight
trucks delivering customers safely back home all over the
northeastern United States. The biggest hinderance in the
business is the interstate commerce regulations. I am an
advocate for state rights but sometimes the federal government
can do a better job. Interstate commerce is one of those areas.
It would be impossible for someone to start up one of these
businesses without having a large amount of capital because of
these regulations. I learned this quickly as we had a truck
stopped in New York State and we were lacking a New York State
fuel tax sticker. The truck was stopped. We had to get another
towing company to finish the job. The next day we hired an
attorney to review all the rules and regulations from our
neighboring states that we operated in. At the end of this we
end up with a truck plastered with seven different stickers and
numbers representing all the states and federal regulations, a
$1,000 fine for a $2 sticker for the State of New York, and an
attorney with a new vacation house.
I would propose that this Committee investigate combining
all the state and federal reports under one number, one simple
form that any American who has a dream of becoming an owner-
operate can understand and complete without paying a third
party.
The next area that I would like to talk about is the real
estate market. I am happy to report to you that despite the
high interest rates that Americans are facing, the real estate
market is very strong. We are seeing houses sell for record
prices in our area. Long-term rental prices are up because of
supply and demand as well as the highest interest rates that is
keeping families from home ownership.
Short term rentals will have a major issue in the next 18
months as those properties were overvalued during COVID.
However, you will not see what we have seen in 2008. We will
not see a flood of housing hitting the market. Americans are
not going to give up those 3 percent fixed mortgages.
Legislation that would help this sector of small business
should come in the form of grants or low interest loans to
revitalize America's uninhabitable downtown apartment
buildings. In my hometown of Tamaqua, we have about a mile of
main street that has potential for major revitalization. The
problem is that the projects are massive and the return on
investment is too long or not at all. With proper funding these
buildings could provide affordable housing to Americans and
make it appealing for investors and property owners to bring
these buildings back to livable standards. Unfortunately, this
is going to be a very unpopular opinion, but the legislation
that we would need would have to limit the prevailing wage
which keeps these existing grants from being used. Currently,
Tamaqua is sitting on a $1,000,000 grant that has not been used
in over 2 years because of how the grant is written and the
requirements of the prevailing wage. With revitalization of
these buildings we will be able to have more affordable housing
bringing more workers available to help all small businesses in
that community.
I want to thank you again for having me here today.
Chairman WILLIAMS. Thank you.
And I now recognize Dr. Tammira Lucas for her 5-minute
opening remarks.
STATEMENT OF DR. TAMMIRA LUCAS, CEO, CUBE COWORK/COPPIN STATE
UNIVERSITY
Ms. LUCAS. Good morning, Chairman Williams, Ranking Member
Velazquez, and Members of the Committee. Thank you for the
opportunity to testify.
I am Dr. Tammira Lucas, CEO of the Cube Cowork, the largest
black women-owned coworking space that provides onsite
babysitting services in the United States which supports over
250 local women entrepreneurs in Baltimore. I am also an
assistant professor in the College of Business at the esteemed
HBCU, Coppin State University.
There are a few obvious why supporting and establishing
policies that directly positively impact small businesses
should not be an option but instead a priority.
As I am sure you have all heard several times before, small
businesses are the heartbeat of our communities. They are
founded by local entrepreneurs who made the conscious effort to
bet on themselves to build wealth for their families. They are
maintained and fed by local residents of the community.
Main Street Alliance reports everywhere that small
businesses thrive, poverty rates fall and property value rises.
This investment in local communities is the backbone of the
American economy where small businesses create 64 percent of
all new jobs in the nation. In 2023, small businesses,
especially minority-owned businesses in Baltimore City and
County are still struggling to survive financially and growing
their receipts significantly due to a myriad of reasons.
According to the McKinsley Institute for Black Economic
Mobility, market barriers result from unaddressed needs often
related to changes of access to capital expertise, and
services. Sociocultural barriers encompass the bias and
exclusionary ways in which black entrepreneurs are more likely
to be blocked from gaining social capital such as relationships
that make up business networks. Finally, institutional barriers
are supported by the systems in which black-owned businesses
operate and include factors a basic as their location.
As I speak in front of you today, I want to highlight many
of the issues that entrepreneurs in Baltimore and similar
cities around the country continue to face preventing them from
achieving business sustainability, wealth creation, job
creation, and crime reduction.
Maryland has the highest rate per capital of women-owned
businesses in the United States. Maryland has 42 minority-owned
businesses for every 100,000 residents, and 17.5 businesses
owned by women per 100,000 residents.
Those that have acquired student loan debt are less likely
to assume the risk of starting a business due to the lack of
financial stability and the burden of the debt. As a business
professor, I could constantly see students deciding to obtain
careers that do not align with their goals or values to tackle
their student loan debt. They also desire, like me, to start a
business but understanding the realities of debt will not allow
them to indulge themselves fully in the world of
entrepreneurship. Affordable education is essential to the
growth of our economy. The average black bachelor's degree
holder has an average of 52,000 of student loan debt with an
average salary of $49,000 after graduation.
Student loan debt forgiveness would immediately increase
the wealth of black Americans up by 40 percent. If new
businesses do not continue to start, our overall economy will
be negatively impacted. More than half of the households in
Baltimore City are run by single mothers who are living below
the poverty level. However, this same demographic are the ones
who are using their talents and nonexistent finances to start
businesses to increase the household income and to employ
individuals in their community.
Not only are they dealing with the lack of capital but they
are also dealing with the major barriers, like the lack of
affordable childcare, high student loan payments, and
inflation. We continue to expect constituents in low-income
areas to do miracles with very little.
In 2023, interest rates were at an all-time high. This rise
impacted the amount of disposable income directly impacting
small business owners' success.
I want to emphasize the importance of finding solutions
specifically for entrepreneurs to access affordable childcare
while starting or growing a business. Currently, our system is
designed to only focus on providing childcare subsidies to
women who are in the workforce. Entrepreneurship in the eyes of
the system is not considered a workforce activity. However,
entrepreneurs are creating the workforce. Aspiring or current
entrepreneurs should not be forced to make a decision on
whether they will start a business or go into the workforce due
to the lack of affordable quality childcare. I want Congress to
imagine living below the poverty level paying $15,000 a year
per child for childcare while trying to start or scale a
business. Mothers should not have to choose their
entrepreneurial dreams over their children. The American Rescue
Act childcare support ended September 30th threatening for
continued existence of a third of the nation's childcare
centers for quality and more on the 3,000,000 American
children.
I have more to say but thank you.
Chairman WILLIAMS. We will now move to the Member questions
under the 5 minute rule.
I now recognize myself for 5 minutes.
Before I was elected to Congress I served as Secretary of
State of Texas in Governor Rick Perry's administration. The
state wanted to undertake a lot of different infrastructure
projects but we quickly realized we had a problem. We could not
find enough welders in the state to compete with some of the
other projects and that was an eye-opening experience for me
that showed we had some serious workforce issues that still
have not been fixed all these years in Texas.
So we continue to hear similar stories from many small
businesses, especially in the manufacturing industry. Not only
is it hard to find new talent but you have to pay top dollar to
keep the good employees happy.
So Mr. Thompson, can you talk about some of the workforce
issues you have been seeing in rural Texas and how have you
been trying to recruit and retain top talent as lack of workers
held back many of your business expansion plans?
Mr. THOMPSON. That is a good question.
You know, I am actually a welder by trade myself, and these
boys that are trying to get in the welding business right now,
they have no way to get there. Most of them are low-income
families. They cannot get student loans for some of these trade
schools like a kid going to college. And I also think our high
schools, especially in the State of Texas--I cannot speak for
anybody else--I do not think we are pushing enough vocation. We
are just pushing college in the high schools and not helping
these kids learn what is out there, whether it be a welder,
whether it be air conditioning or electrician or anything like
that.
Chairman WILLIAMS. Before I move on to someone else, Mr.
Thompson, can you briefly tell us about some of the regulations
that are hurting your business?
Mr. THOMPSON. I think there's really too many to answer.
But a lot of it has got to do with minority owned. I mean, I
have had one of my major clients tell us that we are going to
probably lose some of the work from them just because we are
not minority owned.
Chairman WILLIAMS. Okay. Mr. Boyle, you own and operate
seven different businesses in different industries as you have
explained. You are the definition of an entrepreneur and you
have to fix problems, you see the marketplace rather than just
sit on the sidelines. So it is my hope that this level of drive
can be installed in more young people across our country. We
have too many umpires and not enough people willing to play the
game.
So Mr. Boyle, what advice would you give to someone who is
looking to take the leap of faith and invest in themselves by
starting their own businesses but might not be sure where to
start?
Mr. BOYLE. I would have to give the advice as to do it.
When I started out I was a junior in college and I did not know
what I was going to do post-grad. And it was a scary work
environment in 2010, locally anyhow. So I would give any advice
to start a new business up is to take the bull by the horns and
get it down, and push through it. There are going to be some
hurdles as with anything else but you could definitely make it
happen.
Chairman WILLIAMS. Well, risk and reward has always been
what this country is about. Take a little risk, get some
reward; right?
Mr. BOYLE. Absolutely.
Chairman WILLIAMS. That a boy.
So let me, just to follow up, can you speak to your
business on how you have been navigating these fuel costs that
go up and down?
Mr. BOYLE. The fuels costs, fuel surcharges, they have
definitely been negatively impacting our clients. I have seen,
we do some aggregate hauling for quarries and I have seen them,
they set the fuel surcharge rate. And I have seen that as high
as 27 percent which I could not imagine being able to operate
with a 27 percent surcharge on aggregate.
Chairman WILLIAMS. Real quick, Mr. Grech, while I have got
the remaining time, in a few words, how can digital tools help
small businesses better succeed in the current economic
environment that we see?
Mr. GRECH. Thank you for the question, Mr. Chairman.
Mr. Thompson was describing the difficulty in finding
skilled workers when it comes to manual labor like welding. And
I basically want to echo that that is exactly what many
businesses are experiencing when it comes to knowledge work.
And I think that there is an incredibly important role that the
federal government has in helping subsidize a future ready
workforce, whether it is a welder, or someone working on
marketing inside of a company. Artificial intelligence tools,
digital advertising, digital marketing in general are areas
that knowledge workers need to understand in order to succeed.
Chairman WILLIAMS. Okay. Thank you.
I now recognize the Ranking Member for 5 minutes of
questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Dr. Lucas, you mentioned the pivotal role of single mothers
in the Baltimore economy despite the significant barriers that
they face. How do you think expiring support for things like
childcare will impact the ability of mothers to run a business
in the coming months?
Ms. LUCAS. That is a good question. It is negatively going
to impact new business creation for mom-owned businesses
specifically because of the lack of affordable--not just
affordable childcare but quality childcare as well. None of us
would be here without our mothers, yet there are very small
services that are geared to supporting moms and businesses and
we have to really reevaluate how would the world actually run
without a mother.
Ms. VELAZQUEZ. The Small Business Administration has made a
concerted effort to expand SBA resource partners to
historically black college and universities. How was your
experience with the Morgan State Women's Business Center?
Ms. LUCAS. That is an amazing question. The Morgan State
Women's Business Center has been an amazing partner with our
coworking space in deploying resources directly to the
communities in Baltimore City and County and the surrounding
areas. We have been able to really offer workshops, educational
resources, and financial resources to really help sustain
minority, women-owned businesses.
Ms. VELAZQUEZ. So you think that efforts such as this one
will close the gap in terms of disparities?
Ms. LUCAS. Absolutely. I think that those services and
resources that are deployed into women's business centers
should definitely increase to continue to support.
Ms. VELAZQUEZ. Thank you.
Mr. Thompson, you expressed your commitment to locally
manufacturing and sourcing your products. What are the broader
benefits of domestic manufacturing, specifically for the
surrounding communities and small businesses?
Mr. THOMPSON. How do I explain this? For like us, we want
to do American. We can go offshore with supply and get it a lot
cheaper but then you lose the quality and then, I am sorry but
I am patriotic. I am an American and I am a Texan and so we try
to help each other. That is just----
Ms. VELAZQUEZ. Thank you.
Mr. THOMPSON.--the American way.
Ms. VELAZQUEZ. Mr. Grech, having worked for and with many
Latino-owned businesses, can you talk about the importance of
entrepreneurship in the immigrant community and how these
businesses benefit the communities they serve.
Mr. THOMPSON. Thank you very much for the question.
I am the son of an immigrant and more than 2/3 of the
people who live in my immediate county are immigrants. Most of
them are from Spanish-speaking countries. And most of them,
many of them are entrepreneurs of need. Essentially, they come
to this country penniless and with no networks and they have to
essentially work to eat. And they are often the best of their
home countries. The most ambitious, the ones with the greatest
drive, and frankly, the biggest get up and go because there is
nothing like leaving everything to start over. And these folks
just need a leg up. They are documented immigrants and future
American citizens. Their children are American citizens. And
they struggle. They struggle so much. And so Miami-Dade County
is funding a number of programs that we run in English and
Spanish and Creole to help give them access to education. One
of the biggest issues that we face is that they do not know
that that training exists. And they were preyed upon by
charlatans that take advantage of their newness and ignorance
of the way things work and where help is available. So there is
a huge role for the SBA and its funders, the organizations it
funds to just spread the word that there is some really good
and valuable training out there to help them.
Ms. VELAZQUEZ. Thank you.
Dr. Lucas, access to healthcare remains a barrier to
entrepreneurship for many people with dreams of starting their
own businesses. How does a universal system benefit small
business owners?
Ms. LUCAS. A universal system allows small businesses to
really access affordable healthcare. I want to be very clear. I
am a professor but that was not a decision just based off of my
expertise, education, and love for education. It was because I
suffer from a health condition that I need affordable
healthcare. And so we have to think about how do we really
provide that to all.
Ms. VELAZQUEZ. Thank you.
I yield back.
Chairman WILLIAMS. I now recognize Ms. Van Duyne from the
great state of Texas for 5 minutes.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
This year we heard countless stories on how this
administration has hampered the ability of small businesses to
grow due to their reckless spending, and quite honestly,
overregulation which is part of the reason why earlier this
year this Committee passed my bill, the Small Business
Regulatory Reduction Act. This bill requires the SBA to ensure
for each fiscal year the cost to the Small Business
Administration's rulemaking is not greater than zero, which
also is requiring the SBA to issue a report on any regulations
issued by other federal agencies that impact small businesses.
I look forward to working with this Committee next session to
ensure that Congress is reigning in the power of out-of-control
regulatory glutton executive branch and I look forward to
continuing the work on this Committee to see that my bill moves
forward and to work to strengthen the small businesses across
the country.
You brought up some excellent points, Mr. Thompson, about
workforce development and the lack of focus on trades. And if
you think about it, in the last couple of years, trades is
really where it is at. Once you have that knowledge, once you
have that experience, you can basically charge anything you
want. And trust me; I have been trying to get some folks to the
house. It is a very, very competitive market and not enough
people are doing it.
Last summer we worked with our high school and our junior
high counselors, our middle school counselors, on getting them
access to businesses that were willing to work with them to
introduce their trades to students. We focused on things like
healthcare. We focused on law enforcement. We focused on
aviation. It was a great experience because the counselors had,
to your point, been really pushing for 4-year degrees and for
kids to take out these massive loans to get a college
education. When we introduced and we worked with some of the
businesses who we had met with in roundtables who had told us
they were having a very difficult time hiring, the introduction
was phenomenal.
Are you doing any of those types of things? Are you working
with some of the middle schools or some of the high schools to
actually introduce what you do so that the students know that
within their very city, their very locale that they have
opportunities once they graduate?
Mr. THOMPSON. Yes, ma'am. We are working with Stephenville
High School. They have come and toured our facility. We have
went and had some roundtable meetings and offered our
expertise.
Part of our problem in our area is there is not enough
people out there to teach some of these vocations because there
is such a demand for it out in the workforce that they would be
crazy to go from $75 an hour to teachers' wages. So you know,
that is something that we need to look at is increasing
teachers. Because without teachers we would be a bunch of
idiots to tell you the truth. So, you know, it is hard. That is
the hard part is getting teachers for it.
Ms. VAN DUYNE. Yeah, that is a good point.
Mr. Grech, are you doing anything with your local middle
schools or high school students?
Mr. GRECH. Yeah. BizHack primarily works with the community
college and university level but, you know, community college
in many ways is sort of the pathway into knowledge work for
many immigrants and poor folk. And Miami-Dade College which
actually where BizHack got its start, that was where I was
teaching in their Entrepreneurship Center, many of those are
folks that are kind of striving for the middle class. And what
we have seen is that the need for workforce development,
whether it is nursing, manual labor, or knowledge work is vast.
And because higher education has gotten so, so expensive, I
really do think there is a needed role for the government to
subsidize some of this training so that we can stay competitive
locally and globally.
Ms. VAN DUYNE. And I know that we have actually been
fighting for that. We have introduced a number of bills that
would do that.
Mr. BOYLE. Yeah. So I am the vice president of our local
school district and I can tell you that we have a great
outreach program with the high school. Many programs allow
students to go to school till about noon and then they end up
coming to the workforce. Our demographic of employees really
are all local. Some of these guys have worked for me since they
were 14 years old. They are now in their mid-20s buying houses.
So we definitely, the outreach to the local schools is always
important and it is always good to do that outreach to build
back up small town American. So yeah, it is probably one of the
most important things that we do.
Ms. VAN DUYNE. I appreciate all of your testimony, and I
yield back.
Chairman WILLIAMS. I now recognize Mr. McGarvey from the
great state of Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman.
Mr. Boyle, I appreciated your comments about your hometown
in Pennsylvania having a great main street. I have got to brag
about my main street in Louisville, Kentucky, where we just
have incredible buildings. We have a great collection of the
cast iron buildings that rivals, you know, New York and
Portland, Oregon, in terms of its beauty and amount of
buildings we have got there. From First Street to Ninth Street
it is incredible. But then you get to Ninth Street and there is
literally a physical barrier. The Ninth Street ramp comes off
the expressway and separates east from west Louisville. Of
course, that is also a mark of segregation in my community and
it separates a largely historically black area from a more
white area. And what you see then through redlining, through
other practices over the years is you see a lack of
opportunity, a lack of grocery stores, a lack of access to
capital for a lot of these small businesses. And that is why I
will say I am thankful for the work that we have done on the
infrastructure law because, you know, my community is going to
get $3,600,000,000 for projects like Reimagine Ninth Street
which I really hope will open up opportunity which will open up
entrepreneurship, which will open up opportunity for economic
growth for everyone in Louisville, not leaving anybody behind.
Dr. Lucas, you stated we continue to expect constituents in
low-income areas to do miracles with very little. I could not
agree more. And I think it is incumbent upon us as policymakers
to recognizes this fact.
So Dr. Lucas, how can the SBA lower barriers to entry and
make resources more accessible to all to receive them,
particularly in areas where our constituents are being asked to
do a whole lot with very little?
Ms. LUCAS. That is a good question and thank you for asking
that.
One of the things that I want to really highlight is that,
you know, when you are implementing literally like tax
incentives for small businesses, small business owners, we
desire to pay living wages; right? However, it is impossible
for many of us with inflation and so it is essential for our
federal government leaders to create policies that will
incentivize small business owners to pay living wage to their
employees. It is also to identify that there is a gap as you
said. There is a world, right, it is two different worlds out
there and we have to really get down to making sure that we are
addressing those needs and being very strategic on how we are
placing capital in the hands of minority and women-owned
businesses. At the end of the day there is a huge gap that has
existed forever just because of the color of their skin or just
because of, you know, them being identified as a woman. And so
we have to really be honest with ourselves and deploy resources
to mitigate that gap.
Mr. MCGARVEY. That is right. Initially, that gap was
provided for in policy. I will state that was a decision and we
have got to do what we can to reverse that.
I will ask you another question, Dr. Boyle--not Dr. Boyle.
I am sorry. Dr. Lucas. I will get to you next, Mr. Boyle. I
promise.
As we get ready to wrap up the year, what are some of the
biggest challenges you notice that small business owners and
aspiring entrepreneurs faced in 2023?
Ms. LUCAS. Great question. Again, access to capital. Access
to social capital. Really being able to implement some of the
information that they are receiving from many of the resources,
like the women's business center or any of the supportive
services that the SBA does. There is a lack of workforce. I
totally agree with that and that comes with many of the other
issues that have not been talked about outside of me addressing
them as far as like childcare. Women are typically the ones
that are working in the workforce but yet we are not really
deploying those affordable resources to help them be in the
actual workforce and support their families.
Mr. MCGARVEY. As one who dropped our youngest off at
preschool before getting on the flight yesterday to Washington
I appreciate that comment.
Mr. Boyle, I will get to you last.
You found a number of successful businesses and, you know,
this Committee does great work because we all know the
importance of entrepreneurship and small business. You get the
last word. Same question. What challenges emerged in 2023 and
what would you like to see?
Mr. BOYLE. I would, definitely going back, you know, 2023
start off pretty good and now I am seeing that the end of the
year that lack of capital. Just like the good doctor here has
just stated. I would like to see some better programs that are
going to be out there to help the small businesses out because
I feel like we are just starting the storm and 2024 is, I
think, going to be a big challenge for small businesses.
Mr. MCGARVEY. Thank you very much.
I yield back.
Chairman WILLIAMS. The gentleman yields back.
And I now recognize Mr. Mann from the great state of Kansas
for 5 minutes.
Mr. MANN. Thank you, Mr. Chairman, for having this
important hearing. Thank you for our witnesses for being here
today.
I am Congressman Tracey Mann and I represent the Big First
District of Kanas, which is 60 primarily rural counties in the
western and central part of Kansas. The Big First is home to
more than 20,000 small businesses and more than 80 percent of
the employees in my district are employed by small businesses
which help drive our economy and define the American dream.
Unfortunately, as this hearing has highlighted, the dream
is becoming farther and farther out of reach for especially our
rural small businesses who continue to face unprecedented long-
term challenges brought on in large part by Washington's
addiction to spending and overregulation. After more than 2
years of near record inflation, high interest rates, regulatory
burdens, and workforce challenges, rural America is hurting.
But we have a saying in Kansas, our state moto, Ad Astra per
Aspera, To the Stars Through Difficulty.
I am proud of the work House Republicans have done on this
Committee to reign in the overregulation, out of control
spending, and inflation-raising policies of the Biden
administration to make it easier for small businesses to expand
and grow their operations. But more importantly, I am proud of
family farmers, aerospace startup entrepreneurs, and every
rural weedkiller and restaurant owner, all the folks in my
district who harness their God-given gifts and entrepreneurial
spirit to produce a better future for their communities and our
country despite and through all these challenges. We can and
must do more for our rural communities in Congress and I am
committed to doing just that.
A few quick questions. First for you, Mr. Thompson, you
specifically mentioned in your testimony the important role
your company plays in rural communities. Can you speak a little
bit more to the broad impact that you see that your company has
on the lives of folks in your rural community?
Mr. THOMPSON. Well, like I said, I live in a town of about
44,000 in our county, and we are probably the fifth largest
company. We have got, of course, Tarlton State being the
biggest. And our employees are our family. I mean, we have got
right at 200 employees. I would say about 150 of them worked
for us for 10 years or longer. We would have probably another
100 if we could get, you know, we supported our athletic
department at Tarlton and at Stephenville High School. And you
know, if we were not there where would they, you know, where
would they work? Because, like I said, I mean, we are the fifth
largest probably.
Mr. MANN. That is tremendous.
Mr. Thompson, what can Congress do to encourage the next
generation of rural entrepreneurs? You know, we need more folks
like you starting and building businesses in our rural
communities. What aught Congress do or think about to have more
rural entrepreneurs?
Mr. THOMPSON. You know, there are a lot of them there in
Stephenville that would like to start their own business but
the problem is, again, education as far as, you know, like
there are four AC companies. There are five electricians. And
they are so backed up and everything. Well, these kids are
actually working for them. They are scared to go out and get it
because, one, the interest rates are crazy. And they cannot
afford it. Not starting out. I mean, you have got to have a
little nest egg to start a company. I do not care who you are.
There is nobody who started a company broke.
Mr. MANN. Yeah. Yeah. That is right.
I appreciate that. I appreciate you bringing up interest
rates, which is my next topic for you, Mr. Grech. I know you
work with thousands of small businesses. Explain to this
Committee the impact of these interest rate increases that we
have seen over the last couple of years and what that really
means for our small businesses, urban and rural.
Mr. GRECH. Absolutely. Thank you for the question.
I just wanted to actually address one of the things that
you had talked about, about what we can do with our rural
workforce. One of the benefits of being in a remote workplace
environment is that folks who live in lower cost of living
locations actually have an incredible advantage when it comes
to being hired as a knowledge worker. So I think another
approach perhaps to rural employment issues, a way that will
allow people to work for companies that are not local and also
make a living or better than living wage is to train them in
disciplines like digital marketing and then try to get them
connected to companies that are maybe not necessarily directly
inside of their community.
Now, to address your question, right now in addition to
high interest rates, small businesses are facing a ton of
headwinds--inflation, supply chain issues, a lack of skilled
staff which we have talked a lot about. And I think there is
just an incredible need and role for this Committee to help.
Because I think 2024 will be another challenging year.
Mr. MANN. Thanks, Mr. Chairman.
Chairman WILLIAMS. Thank you.
I now recognize Ms. Chu from the great state of California
for 5 minutes.
Ms. CHU. Thank you, Mr. Chair.
As we near the end of the first session of the 118th
Congress, I want to acknowledge the hard work of this Committee
to pass 22 bipartisan bills out of markup. And already we have
passed 10 of those bills on the House floor, including my bill,
the Investing in Main Street Act. This bill simply amends an
outdated law to allow financial institutions to invest up to 15
percent, triple the current amount of 5 percent, other capital
and surplus into SBA certified small business investment
companies (SBICs) that specialize in high potential startup
companies that need this capital. This common sense change
would help to close the gap and access to capital which
continues to be a challenge for small businesses. The Investing
in Main Street Act passed the house in January on an
overwhelming bipartisan vote just as it has in the previous
three Congresses. I urge the Senate to finally take up this
important legislation so we can get it signed into law. And
there is a potential of having three times as much capital for
these types of businesses.
And now I would like to ask Dr. Lucas, in 2021, democrats
provided an historic $24,000,000,000 in funding for childcare
as part of the American Rescue Plan. This funding is estimated
to have kept 80 percent of childcare centers in the U.S. afloat
as we continue to recover from the pandemic. But that lifeline
expired in October of this year and democrats in Congress are
pushing to secure President Biden's request of $16,000,000,000
in additional childcare funds.
Dr. Lucas, based on your experience working with mom
entrepreneurs, can you elaborate on how devastating the current
childcare funding cliff is for the small business community,
both for entrepreneurs themselves as well as for their
employees who are parents? What will happen to small businesses
in this country if parents lose access to childcare?
Ms. LUCAS. Thank you for that question.
So many childcare providers actually have already begun to
lay off their workers and raise fees to make up for the loss of
the federal funding. And without affordable care, many women
will be forced to scale back at work or quit all together. We
know that women, especially black women, are the largest
consumer groups. So in other words, we keep the economy
flowing. If you do not invest in us, you are going to see an
economy that is not going to continue to flow. You are going to
see small businesses not continue to be created. And there is
going to be a hinderance overall. And so affordable childcare
is much bigger than what we probably see on the surface. Think
about being a mother or being a woman and deciding whether you
can actually have a child for the first time and/or start your
business. I do not think that any American should have to
choose between the two. That you should have the option to do
both, and you should have the option to do both well.
Ms. CHU. Thank you for that answer.
Well, Dr. Lucas, democrats have been fighting for so long
to finally pass a national paid family leave and medical leave
policy so that parents do not have to choose between earning a
paycheck and caring for their children. As part of the American
Rescue Plan of 2021, Democrats created a temporary paid sick
and family leave tax credit specifically to help businesses
with fewer than 500 employees provide paid leave for their
workers. That program expired in September 2021 but it was
enormously helpful both for employers who claimed the credits
and workers who were able to take off the time they needed to
care for themselves and their families without losing their
jobs or their paychecks.
Dr. Lucas, given your experience working with mom
entrepreneurs, many of them single parents, can you speak to
how important a permanent paid leave policy would be for
helping small businesses attract and retain talented workers,
especially mothers?
Ms. LUCAS. Absolutely. So our labor market is driven by
working mothers; yet, we as a country do not effectively
support the cycle of life by supporting moms in the workforce.
Workers without access to paid leave are more likely than
workers with paid leave to experience the financial and
material hardships, including being more than twice as likely
unable to pay their rent, utilities, and twice as likely to
experience food insecurities.
Ms. CHU. Thank you for that and I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Stauber from the great state of
Minnesota for 5 minutes.
Mr. STAUBER. Thank you, Chairman Williams and Ranking
Member Velazquez for holding this hearing today. And thanks to
our witnesses for taking the time out of your busy schedules to
help us shed light on these important topics.
Since President Biden took office, over 700 regulations
have been passed, costing nearly $440,000,000,000 and adding
more than 236,000,000 hours of paperwork to small businesses.
Over the next decade, compliance with Biden's regulations
will cost Americans more than $1,500,000,000,000. Regulations
such as these are unacceptable as families struggle to make
ends meet between choosing food, medicine, or even purchasing
Christmas gifts for their children. We must do better for the
small businesses in our communities.
As the backbone of our economy, it is no surprise small
businesses bear the majority of this burden. It is clear; this
administration's burdensome regulatory regime has only made
life even more difficult for Main Street America this year.
Small businesses are hurting enough from inflation, supply
chain, and workforce challenges. They do not need the added
burden of federal regulations.
Mr. Thompson, you mentioned in your testimony some of the
issues your small business has faced this year. Can you speak
to the regulations or policies that have affected your business
this year specifically?
Mr. THOMPSON. Well, like I had mentioned, we actually got
involved with the immigration to bring over some people to help
us alleviate the employees. And you know, for some reason all
of a sudden now we have red tape. Like I said, from the time we
started to the time the boys were at our shop was 30 days. It
has been 9 months and I will not say we have got an order for
but we have been working with 60 more men to come over. And
like I said, it has been 9 months. Have not heard anything
because of the red tape.
Mr. STAUBER. On the regulatory side, what sort of
additional costs have you experienced this past year?
Mr. THOMPSON. Most of that has trickled down from our
suppliers. As far as regulations on us it has not been that bad
I will have to admit.
Mr. STAUBER. Supplier, supply chain?
Mr. THOMPSON. Yes.
Mr. STAUBER. What is your increase in cost reference to
supply chain do you think, a good estimate?
Mr. THOMPSON. It was around, the last time I checked it was
around 35 percent.
Mr. STAUBER. Bidenomics coupled with this regulatory agenda
is hurting small businesses. The government should be in the
business of ensuring the economy works for Americans and our
small businesses and does not hamstring our job creators. If we
cannot find a way to help small businesses we must get out of
their way.
One way the federal government seeks to help small
businesses is through the SBA and their training programs.
Mr. Grech, from your experience, is the federal government
and the SBA providing enough training and tools to help small
businesses succeed?
Mr. GRECH. The SBA is filled with dedicated employees who
really have the best interest of the small businesses at heart.
But like any organization, they can do more and they can do
better. Unfortunately, a lot of the training that is being
provided is out of touch with what the cutting edge of
technology is, and there is an incredible opportunity for a
public-private partnership with frankly training academies like
mine that are on the cutting edge to leverage federal funds to
build the workforce of the future. This is imperative. It is
not only required for us to survive in the U.S. economy but to
be competitive globally.
Mr. STAUBER. Do you, in your experience, is a 4-year degree
necessary?
Mr. GRECH. You know, I am the beneficiary of a 4-year
degree and two masters. And the one thing I will say is that
there is no better investment than in educating yourself. And
whether it is a trade school to become a welder or to get a
master's degree to become a tenured professor, the best money
you will ever spend is in educating yourself no matter what
destination you have.
Mr. STAUBER. You have obviously a lot of experience. I
think you alluded to training to meet the demands and needs of
today rather than yesterday and I really appreciate those
comments. You know, we must allow our small businesses to
endure and innovate. It is so important that the federal
government really in many ways get out of your way and let you
succeed and I think it is important.
Mr. Chair, I commend you for holding this hearing. This is
really important.
And I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Gluesenkamp Perez from the great state
of Washington for 5 minutes.
Ms. GLUESENKAMP PEREZ. Thank you, Mr. Chairman. And thank
you to all the witnesses for being here today.
So when I talk to small business owners back home, one of
the things that almost always comes up as a barrier to growth
is access to affordable housing for their workforce.
Mr. Thompson, first, I would also like to congratulate you
on the most magnificent facial hair I have seen in this
Committee hearing. I do not know if anyone----
But in your testimony you mentioned the lack of affordable
housing in your area as a deterrent for candidates. And like
you, I live in a rural community and I hear from small business
owners all the time about one of the biggest challenges to
their growth. So earlier this year I had a constituent from
Ilwaco, Washington come to speak to the Committee for the
hearing on rural entrepreneurship and he talked to the
Committee about how he had to lobby his city council
extensively to be able to get zoning changes to allow him and
his business partner to live in their commercial building
because there was literally no other place for them to live.
And it is a real challenge to get people to move to rural
areas. And even if there is a good job, if you cannot have a
house there, right, you have to figure out where you are going
to live if you are going to take the job. And so that part of
your testimony really resonated for me.
Could you, Mr. Thompson, expand a bit more about how this
lack of affordable housing impacts your business in your
opinion? What could we be doing better to incentivize people to
move and stay in rural communities?
Mr. THOMPSON. As far as, you know, that is like in
Stephenville an average house is renting for about $2,500 a
month. Now, most of my employees on average, and this is on
average, make about $60,000 to $70,000 a year. That is tough.
As far as, you know, back to interest rates, it is kind of hard
to go out there and spend the money to buy a couple of lots and
build a house to rent or to live in when the interest rate is
crazy right now. I mean, I think we will have that problem of
not being able to afford the cost of living in Stephenville
until we get the interest rates down. And like I said, all my
employees make pretty good money but still, it is getting taken
away in other ways, so.
Ms. GLUESENKAMP PEREZ. Yeah, housing stock is a real
problem and you know, we are blessed in my county with a great
building inspector who is a reasonable man but it is a
challenge in so many communities.
Mr. Boyle, your testimony also mentioned barriers to
housing development. Could you elaborate on the challenges you
see facing access to affordable housing and how that impacts
businesses like yours?
Mr. BOYLE. So in our small community we have an old main
street where there is tens, hundreds of thousands of square
feet that are no longer being used. Back in the early 1900s,
probably up to the 1950s or `60s, they were all apartments. Now
they have gone into disrepair. Those buildings are constantly,
you know, for sale and they are getting flipped and then I
think the new buyers realize that they got themselves into a
big project. I think the federal government, you know, could
definitely help us out in bringing more apartments to the
market thus lowering the cost of affordable housing. The
biggest challenge is that federal money is always tied in to
this prevailing wage. And what happens is the prevailing wage
is so expensive that the return on investment on these
properties are so far out that it never gets used. Like I said
before, we have $1,000,000 in Tamaqua for that kind of work. It
does not get used. We have looked at it doing two or three
projects and we have not used it. We have gone out of pocket
for all of our product so far. That is how unattractive those
programs are.
Ms. GLUESENKAMP PEREZ. Thank you so much for your
testimony.
Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Meuser from the great state of
Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you, Chairman Williams, very, very much.
Thank you to our witnesses, particularly to my constituent, Mr.
Boyle. I appreciate it.
So Mr. Boyle, I appreciate your comment earlier where you
talked about paranoia. I spent some time, over 20 years, we
built a small business into a large business. I used to try to
call it healthy paranoia but sometimes it was not all that
healthy. It was kind of unhealthy. But you persevere.
You know, one thing I do know is that government does not
create jobs. Government's role is to create an atmosphere where
you create the jobs. The worst thing that government can do is
affect the opposite. Create atmospheres that make it more
difficult to create jobs. Like a good ump in a baseball game I
sometime analogize it, call the balls and strikes, which is
following laws and the constitution which is our rule book, but
outside of that be as unnoticed as possible. It seems that
government has gotten very noticeable in our economy and
negative affecting small businesses.
Let's take Bidenomics quickly. I mean, from energy to
pending, to the regulations. What, $300,000,000,000 since they
have been in office. Spending of over $6,000,000,000,000,
$7,000,000,000,000. Where is it? I do not know if you all see
it on your streets or in your towns but it has caused inflation
which has done nothing but damage small businesses. Caused
interest rates to go up. We have got pending taxes because the
TCJA that our colleagues on the other side of the aisle, and
certainly in the White House say was some sort of giveaway to
the reach when meanwhile it enormously stimulated small
businesses.
So, as a matter of fact, this year sales for small
businesses may be up in some cases but profits are down. And I
know to some profits is an ugly word but profits are what
income taxes are paid upon. Do you know that the passthrough
businesses income tax levels for the federal government are
down 280, maybe 300,000,000,000? We will see what the final
numbers are. $280,000,000,000 down from one year to the next
causing huge deficits. Right? So here we have the revenue loss
and then throw in because of the interest rates and the
excessive spending our service on our debt since Biden has come
into office is up $320,000,000,000 from 275 to 645, so actually
350. So those two factors combined have added $650,000,000,000
to our deficit this year. Is that not just wonderful? Besides
that Bidenomics is fantastic.
But anyway, Mr. Boyle, what is your biggest challenge? I
know you have been expressing it very well. Is it the
regulations? I think they are. You expressed that in your
opening. Give me an example of what is hurting your business,
what you would like to overcome, and perhaps even what is
stimulating your business besides you and your staff.
Mr. BOYLE. I could tell you going back to the regulations
of the transportation side of the business. Government for some
reason has to duplicate efforts. We have a USDOT number. It is
in its name, US. But yet we have an MC number for interstate
commerce. Why do we need two different numbers? Why do we need
filings? The amount of money that we pay to lawyers and third
parties could provide another job and a half to our towing
company putting another truck on the road and providing more
work for local families. That is one thing that government
needs to clean up is the overregulation. And we are constantly
filing these reports that does anybody actually look at them?
Mr. MEUSER. Well, they do. We have got thousands and
thousands of employees that look at it.
The access to capital issue, how is the access to capital
these days on main street?
Mr. BOYLE. I would say it is starting to dry up. We have
seen on the real estate side of it, we were seeing 20-year
notes with 20 percent down on the acquisition of new
properties. We are now seeing our 15-year notes with 25 percent
down. So now the banks are obviously getting a little nervous
on it and it is taking young entrepreneurs that want to go and
get that capital, now it is going to be harder for them to
attain that.
Mr. MEUSER. Yeah, but more so in community banks and small
businesses.
I have only got 13 seconds left but the Tax Cuts and Jobs
Act, I would love to hear from all of you, perhaps afterwards
or even perhaps submit in writing your thoughts if those
provisions do get phased out.
Go ahead, Mr. Grech.
We are out of time.
Thank you, Mr. Chairman. I yield back. We will talk after.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten from the great state of
Michigan for 5 minutes.
Ms. SCHOLTEN. Fantastic. Thank you so much, Mr. Chair.
Thank you to all of our witnesses for taking the time to come
before us on this really important hearing. It is just so
critical that we take stock of what we have been able to
accomplish and just how much we have yet to do when it comes to
supporting small businesses across the United States of
America.
You know, it is a challenging time in the United States
Congress but I think in this Committee, we pride ourselves on
still being able to move things forward for our small business
owners. I know small businesses are the lifeblood of the
economy in West Michigan and it is so important to me to
support them.
I also want to thank this Committee for passing H.R. 5424,
the Main Street Competes Act. Grateful that this Committee
again came together in a bipartisan fashion to pass meaningful
bipartisan legislation that will help promote the
competitiveness of our nation's small businesses.
My first question is for you, Dr. Lucas. You have been able
to grow a thriving business that supports women entrepreneurs
by incorporating childcare services into your business model.
Of course, great testimony on that here today. As a working mom
myself, I know how important this is.
Back in May during National Small Business Week, I sat down
with many small business owners from my district. While their
businesses were diverse, all of the owners I spoke to shared
how a lack of stable childcare impacted not only them but their
ability to hire and retain employees.
How can Congress help address this unique issue that are
faced by women business owners and male business owners, as
well as their staff who are also working parents?
Ms. LUCAS. Thank you for asking that. I did not get to my
recommendations so I appreciate that.
I think that Congress should bring forth a policy allowing
mom entrepreneurs to access childcare subsidies that will
enable them to receive the assistance that they need for
childcare to start and scale their businesses. And this should
also include alternative childcare options to help bridge the
gap of the lack of quality childcare facilities. So our space,
we do not offer formal childcare but we offer babysitting
services similar to the gym. And so our coworking members are
able to access that resource so if they are working 3 to 6
hours they have 3 to 6 hours of uninterrupted time while their
child is in a supervised play area. Being able to access a
service and a resource like that is invaluable. We know as
moms, I cannot speak upon a dad because I am not one, but as
moms, if we are getting 3 to 6 hours of uninterrupted time we
can literally change the world. And so resources and
alternatives like that is important as well as, you know,
having access to resources for moms who are looking to be
entrepreneurs as a subsidy and not just for the workforce. You
know, workforce subsidy childcare is important. I do think that
it needs to increase, and not just increase on the person that
is getting the subsidy but also the childcare centers. The
problem is also the lack of affordable quality childcare
centers in the United States, period.
Ms. VAN DUYNE. I hear that.
In Kent County we recently had a survey and there is close
to 70,000 spaces of need that are currently being unmet. And
you hit it right on the head. You know, it is not only just a
box to check. Parents are often making that decision whether
they are going to reenter the workforce or not based on the
quality of the place that they can leave their children. So
thank you for that attention to detail.
With such great recommendations I am going to ask you for
some more. Childcare impacts mothers and fathers alike but
specifically, I have a question for you about how we can best
support our women entrepreneurs in particular. The number one
driver of small businesses that got off the ground in the last
5 years, what can we do to increase accessibility of services
and resources for these women entrepreneurs?
Ms. LUCAS. Great question.
One of the recommendations that I have is to ensure that
the women's business centers are funded, you know,
exceptionally funded. The services that these women are
receiving is invaluable and really do help create that
financial stability for their business but also create that
social capital that you actually need that is outside of access
to financial capital. That social capital is invaluable. And as
women owned businesses, whether we want to believe it or not,
more than half of women-owned businesses are mom-owned, I mean,
are moms. And so we are still dealing with that barrier of
balancing our families and our businesses. Sorry.
Ms. VAN DUYNE. Thank you.
I yield back, Mr. Chairman.
Chairman WILLIAMS. Yields back.
I now recognize Mr. Molinaro from the great state of New
York for 5 minutes.
Mr. MOLINARO. Well, based on some of the testimony today
the great state might be the overregulated state of New York we
recognize. But to that said, Mr. Chairman, thanks very much for
the hearing today. And of course, we recognize the benefits and
the challenges facing small businesses. Eighty percent of new
jobs created by existing small businesses across the country.
In Upstate New York, in the 11 counties I represent, workforce
recruitment and retention remains one of the biggest
challenges. Earlier this year Mr. Bruno Schickel from Tompkins
County, New York, from my district came to testify and he spoke
very clearly about the one challenge that he faced even in an
environment overregulated and overtaxed like New York is, has
been workforce recruitment and retention.
Mr. Thompson, I was here for your testimony. I know that
you had some more things to say so I want to add to your
opportunity to do so. Would you share with us specifically some
of the challenges that you and businesses like you face in
recruiting skilled workers, especially as that might relate to
rural communities?
Mr. THOMPSON. Well, like I said earlier, a lot of it has
got to do with, well, there is just not enough skilled people
out there and I think a lot of it has got to do with our
failing the young school kids. Them not being able to even
realize there is such a thing as an electrician. You know, a
lot of people do not realize it. They are young kids. They just
think the lights come on.
Mr. MOLINARO. Do you think there is value earlier on in
public education or K-12 to identify vocational education as
part of the traditional educational path?
Mr. THOMPSON. I think it is very important.
Mr. MOLINARO. And giving those opportunities to young
people early on? My stepdad was a great mechanic, a brilliant
mathematician so long as his head is under the hood of a car.
But the second he had to take a test he probably would not have
done so well. I suspect you think that vocational education
early on might help address at least the desire among some
young people to find a path toward success.
Mr. THOMPSON. Oh, definitely. When I was young,
Stephenville was real big into vocational. You know, we had
building trades where the boys learned how to build houses.
Electrician. All that stuff. And that is who actually builds
the houses in Stephenville now is my generation of the guys
that were in vocational back when I was in high school. That is
your electricians and everything.
Mr. MOLINARO. They are folks that build the houses in
Upstate New York, too, thanks in part to apprenticeship
programs, too, for those once they are out of the K-12
educational path.
Mr. Grech, I think you said it best. Small businesses
recognize they must adapt or die. The SBA and the federal
government obviously play an integral role in facilitating
training programs to help and recruit, recruit and retain
qualified workers. In your testimony you point out that the
Committee should explore how the SBA, and in particular SBDCs,
can demodernize to do a better job.
Could you speak to that a bit more broadly? And be specific
about some of the steps that SBDCs should be required to take
and opportunities they should be required to provide?
Mr. GRECH. Thank you for the question.
I want to share a perspective that has not been talked
about yet which is the past year for my company since the
advent of ChatGPT on November 30, 2022, has been the most
exciting and exhilarating year in small business training in my
company's history. I can watch in real time as small businesses
use these productivity tools to do more, better, faster. My
average training participant is saving tens of thousands of
dollars within 6 weeks of starting our work with them. There
has never been a tool in my lifetime that has the amount of
productivity potential as AI.
That said, it still must be regulated because it has
tremendous downside risks related to job loss, inventing false
narratives, deep takes, and causing a lot of disruption. And so
one of the things that I want to urge this Committee is to
participate in regulating it but with a small business
perspective in mind so that we can continue to reap its
benefits.
The SBDCs and other local training arms of the SBA are
essential partners for unlocking the potential, positive
potential of this tool.
Mr. MOLINARO. I appreciate that. With my time running short
I just want to say that many times here in Washington, and I
heard it coming in, the debate is just give more money to WBDCs
and SBDCs. I do not think they are underfunded. I think they
need to be modernized and there needs to be a demand for
greater efficiency. I did not have a small business but I
served in local government. And local government gets stuck
with more and more regulation, more and more burden and we have
to do more and more with less and less. And we do so by
modernizing, leaning on technology, and empowering the people
who work for us.
Thanks, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Davids from the great state of Kansas
for 5 minutes.
Ms. DAVIDS. Thank you, Chairman. Thank you to the Chairman
and Ranking Member for holding this hearing today. Thank you to
all our witnesses for joining us and sharing both successes and
challenges that you all are dealing with.
I would say first of all there has, of course, been an
impressive rate of small business creation of the last few
years. Entrepreneurs across the country have been stepping up
to the plate. But also still facing some unique challenges,
including affordable housing. So I want to kind of come back to
the affordable housing component. I know Mr. Thompson shared a
bit about that in the written testimony about a lack of
affordable housing, pushing away or restricting prospective
employees. And in the Kansas Third that I represent, Panasonic,
which is of course not a small business, is building this
massive battery factory in one of our smaller towns, De Soto
and it is just outside of Kansas City and what people usually
think of as Kansas City. And again, Panasonic is not a small
business but this new plant is going to generate the
possibility in a landscape for tons of small businesses.
Grocery stores, gas stations, childcare facilities, so many
other things. And I have been having all these conversations
with folks at home about this and about the investments that
are needed and how we prepare for such a big project that
really is going to change kind of the landscape of our region.
And affordable housing comes up in every single conversation.
And I think when we are looking at an area that is mostly
suburban but has a lot of rural parts we want to make sure that
the housing is going up but that it is not too expensive for
folks to be able to afford. And you know, I have been excited
to work with folks on both sides of the aisle, including some
of the folks you guys got to meet today on the Affordable
Housing Credit Improvement Act which is a bipartisan piece of
legislation. It strengthens tax credits for affordable housing
and will boost housing construction nationwide. Just in Kansas,
we need about 6,200 more affordable homes. For probably the
great state of New York that does not maybe sound like very
many but for us it is a lot.
Mr. Thompson, I know that you spoke a little bit about
affordable housing challenges. I wanted to see if other folks
wanted to chime in on whether or not you are seeing the impact
of not whether or not but how are you seeing that play out in
your areas?
Mr. GRECH. Sure. Thank you for the opportunity to speak
about affordable housing. I live in South Florida which has
seen some of the highest percentages of housing as a percentage
of income. We are a very poor large city made up of folks who
are increasingly unable to afford to buy a house. In fact, my
own family cannot afford to purchase a home in the area where
we want to live.
This is obviously a huge issue for small business owners.
Many of the small businesses that BizHack serves are really
subsistence businesses. We are working in our business. It is
our job. And we are scraping by. And so there is absolutely a
role for the government at all levels to provide affordable
housing so that our small business owners and their employees
can afford to live in the communities where we are serving.
Ms. LUCAS. I will go. Affordable housing continues to be an
issue even in cities and counties in Baltimore. And what I will
say is it does hinder the opportunity to have the wealth that
you need in order to invest in an actual business. There are
many ways that you can leverage home ownership, and
unfortunately those that are coming from low income areas that
desire to do that do not have the opportunity because of the
non-affordable housing.
Ms. DAVIDS. Thank you. And----
Mr. GRECH. I am sorry to interrupt. There is one other
affordable housing issue which has not been brought up which is
increasingly our homes are also our workplaces. Home-based
businesses need to market themselves more than storefronts and
main street businesses because otherwise no one will know they
exist. And so one of the things that I am seeing is that in
addition to having an affordable house, think of it as their
workplace and that they need to market themselves so people
know that they exist.
Ms. DAVIDS. Thank you.
I yield back, Chairman.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Hunt from the great state of Texas for
5 minutes.
Mr. HUNT. Thank you, Chairman. Thank you, Ranking Member as
well. I thank the witnesses for being here today. Greatly
appreciate it.
We have had a very good year. Sorry, I am a bit under the
weather so please kind of excuse my voice.
We have had a very good year fighting for the continued
success of our American small businesses. And here in this
Committee we shall be very proud of the work that we have done
thus far.
In the Subcommittee on Rule Development, Energy, and Supply
Chains, which I Chair, we have looked at the importance of
small businesses and the scope of securing domestic energy
production and the long-term goal of American energy
independence for all of our communities in this country.
We are at the doorstep of the next step forward in the
development of America's energy future and our small businesses
are at the front leading the way for that.
The first question is for you, Mr. Thompson. Thank you for
being here, sir. Welcome to D.C.
As a fellow Texan I would like to compliment you on your
dedication to the community. I have been watching from the TV
in my office and having being Made in America a priority and
focusing on building up your business with the focus of your
employees, I really appreciate all you have done in that
capacity.
My question for you is do you believe that your business is
in a stronger pathway financially today than it was before this
current administration? And can you speak to some of the
challenges that you have encountered in your businesses over
the course of the past 2 years to stay competitive?
Mr. THOMPSON. No, I do not believe my business is what it
was 4 years ago. The profits are down. We cannot get employees.
I had a guy the other day ask me how Pal-Con is doing, were we
busy? I said, we are as busy as we can be. And anytime you are
busy as you busy as you can be that is not good. You want to be
busier than you can be. And a lot of the regulations that they
have put on our electric in Texas, you know what happened to us
last winter.
Mr. HUNT. Yes, sir.
Mr. THOMPSON. You know, I just do not own Pal-Con. I own a
ranch and I have got cows and they did rolling blackouts on me.
You know, I had to haul water to my cows because everything
froze because they shut my electricity off.
Mr. HUNT. Right.
Mr. THOMPSON. So you have got farmers and ranchers all over
the state that because of the regulations they have got on
electric sides put is in a bind. And like I said it is not
just, you know, it is the whole state pretty well.
Mr. HUNT. So what you are saying is you have seen an
increase in regulation. That is what hurt your business over
the course of the past 4 years. You could see a demonstrative
difference between the way it was 3 years ago juxtapose to the
way it is right now?
Mr. THOMPSON. Yes.
Mr. HUNT. You could speak to that. And not just for your
business but also for your ranch?
Mr. THOMPSON. Yes.
Mr. HUNT. Where is your ranch located, sir?
Mr. THOMPSON. Bluff Dale, Texas.
Mr. HUNT. Bluffdale. Have you had any encounters with
illegal immigration there or anything like that, has that
impacted your ranch as well?
Mr. THOMPSON. No.
Mr. HUNT. It has not?
Mr. THOMPSON. No.
Mr. HUNT. I ask that question because a lot of people that
live in my district have ranches near the border as well and
they are speaking about finding dead bodies on their ranches
every single day because of the border crisis.
Mr. THOMPSON. Mine is actually up by Stephenville.
Mr. HUNT. It is further. It is by Stephenville so it is
further north?
Mr. THOMPSON. Yeah. So yeah, we are, you know, quite a ways
from the border.
Mr. HUNT. Yes, sir.
My next question is for you Mr. Grech. We are watching with
the increase of the use of AI, I am a millennial. I love it. I
think it is great. I think it makes our lives easier. I think
it makes our lives better. However, we are kind of getting to
the tipping point here to where when is too much going to be a
problem? And how do we regulate the increases of AI without
impeding the progress of what it can potentially be?
Mr. GRECH. Your colleague, Mr. Meuser said it beautifully
that the government----
Mr. HUNT. He is okay. Just joking.
Mr. GRECH.--from the great state of Pennsylvania where I am
a native. The government role is to be invisible. But to create
the rules of the game and the guardrails to protect us, AI has
a lot of risks associated with it. I think we are going to see
in this upcoming presidential election some of the downside
risk of deep fakes and fake news and misinformation and
disinformation. It is a very powerful tool for our rivals
overseas in terms of disruption.
But it is also extraordinary. You know, when I train these
small businesses we have what we call an AI moment when it is
like (finger snap) and you realize that there is a before and
after in your life when it came just through the roof. We call
it 1,000X productivity. Ten times faster, 10 times better, 10
times more. So the balance that we need to do, and we need to
do this in a bipartisan way, is how do we mitigate the risks
and unleash the potential.
Mr. HUNT. And I think this is actually a bipartisan issue
that we could all figure out a way to work together on because
we definitely need to continue to progress in this manner but
we have to be very careful with how we do it.
So thank you for being here. I thank the witnesses so much
for being here. I greatly appreciate it.
I yield back my time.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Thanedar from the great state of
Michigan for 5 minutes.
Mr. THANEDAR. Thank you, Chairman. And thank you for
holding this hearing. Thank all the witnesses for being here
and your wisdom.
I am an immigrant and I came here, got a Ph.D. in
chemistry, got an MBA. I wanted to start my own business and
struggled through getting financing. Struggled through getting
bank loans. And one of the things that helped me was getting a
504 loan from the Small Business Administration. And that is
how I bought my first building to help me grow my business.
So I faced my own challenges as an immigrant coming here as
an adult to start my businesses. Now I live in Detroit and I
represent a city that is 78 percent African American. And I see
many businesses struggle. Small women-owned businesses, black,
brown businesses that struggle with all kinds of things,
whether it is childcare issues, whether it is affordable
housing for their employees, whether it is access to capital.
And small business ownership still remains a struggle and
beyond reach for many black and brown families.
How can we make it better? Dr. Lucas, how can we make this
better, increase the number of people at the bottom of the
economic ladder, low-income families to have their American
dream, to have their dream of owning businesses? And make much
more of a level playing field for all so that we can encourage
entrepreneurship for all?
Ms. LUCAS. Thank you for asking that question. And you kind
of took the words out of my mouth of we need to make sure that
it is an equal, level playing field. It is highly unfair to
struggle as a small business owner because of the color of your
skin and where you are geographically located. There needs to
be more capital infused in various areas in order to see that
level playing field happen. It is not just giving minority-
owned businesses money, but it is also how do we make
affordable housing available? How do we make affordable and
quality childcare available? How do we make those resources,
those educational resources available so that those individuals
do not have to acquire high student loan debt and make the
decision to just go in the workforce when that is not their
American dream.
Mr. THANEDAR. Thank you. Thank you.
How does public transportation figure into it? And also,
other Members of the panel, if you have any thoughts on my
first question.
Mr. GRECH. I am the son of an immigrant. My father came
here from Spain when Spain was a very poor country under the
leadership of a dictator. He does not have a college degree. He
worked as a traveling clothing salesman for most of his career
and he sent his son, you know, I went through public schools
and then I went to Princeton University. And I am a very proud
first generation American.
The number one equalizer to give a quality of opportunity
to immigrant-owned businesses is education. And you are a
beautiful example of that. You have a Ph.D. The key here is
that the federally funded training must come in the different
languages of origins of our immigrant populations and with
different levels of sophistication so that we can meet
entrepreneurs where they are.
What I learned when I taught an 80-year-old how to run ads
on Facebook is that the capabilities of our entrepreneurs are
endless with the right support.
Mr. THANEDAR. Thank you.
And Mr. Chair, I yield back.
Chairman WILLIAMS. The gentleman yields his time.
I now recognize Mr. Crane from the great state of Arizona
for 5 minutes.
Mr. CRANE. Thank you, Mr. Chairman. I appreciate the
opportunity to be here. Thank you to everybody on the panel who
showed up today.
Mr. Thompson, I want to go back to some of the testimony I
heard you giving earlier. You were saying that in the last
couple of years when asked if you were in a better spot today,
that your profits are down, you are as busy as you can be, you
want to be busier than you can be and regulations are
strangling your business, you have got rolling blackouts out
there, can you tell us about any work shortages that you are
having because of some of the regulations?
Mr. THOMPSON. Really, the work shortage is not due to so
much regulations as like I earlier testified that we have had a
couple tell us that because we are a minority--or that we are
not minority owned that we are going to miss out on some
projects?
Mr. CRANE. How does that make you feel, sir?
Mr. THOMPSON. Well, at the end of the day all us Americans
are in this together. I do not know why we cannot just get
along. I do not care what color, creed, or ethnicity you are,
we all got to eat. We got to get along.
Mr. CRANE. Does it seem wrong to you that when we start
talking like that it feels like the federal government starts
picking winners and losers based on skin color and race and
ethnicity?
Mr. THOMPSON. Definitely. Yeah.
This question is for the rest of the panel. How is the rest
of your businesses doing under this economy right now?
Start with you, Mr. Grech.
Mr. GRECH. BizHack Academy is thriving. We are thriving
because the need and the demand for cutting edge training and
marketing has never been greater. This is largely spurred by
the advent of generative AI through ChatGPT and other tools.
And so as a result, we are seeing more participants in our
training than we have ever seen. We ran a series of 11 master
classes on AI for marketing and sales that averaged more than
350 live attendees per session, more than three times what we
had seen prior to that.
Mr. CRANE. Do the rest of you guys down there want to take
that one? How are your businesses fairing right now?
Mr. BOYLE. I would say all our businesses are thriving to
the point that we are making money. We are not making money
that we made the past couple of years and we are seeing that.
We are planning right now for the next year that we are going
to be investing less and less into those businesses and trying
to keep some cash capital reserve back just in case we do come
into a rough patch in the economy.
Mr. CRANE. Thank you.
Ma'am, at the end?
Ms. LUCAS. Well, thank you to services like the Women's
Business Center at Morgan State University. Our business is
actually thriving. I cannot say we started out thriving
because, of course, we are black women-owned business and we
typically do not get the resources and support and financial
capital we need to survive.
Mr. CRANE. Interesting.
You know, I am an entrepreneur myself. I find the best
entrepreneurs that I know regardless of where they come from or
what color their skin is or anything like that, the ones that
tend to be the most successful, they are not focused on where
they started from. They are focused on where they are going and
how to solve problems.
Mr. Grech, you said your father is an immigrant as well. Is
that correct?
Mr. GRECH. Yes, sir.
Mr. CRANE. Do you think your father believes in equal
opportunities or equal outcomes?
Mr. GRECH. My father is an incredible believer in
education. He does not have a college degree, yet he is the
most educated man I know. And what he instilled in me is a love
of books and a love of learning. And I have made a study of
entrepreneurship. I have read every book there is about
entrepreneurship. The one thing is there is no substitute for
lived experience. And so when we train businesses, we always
train them in what we call real life campaigns. Nothing is
theoretical. And so it is this combination of best practices
that you can learn at a university with real world experience
applying these in real life situations is where the real rubber
hits the road and how we get the results that we get with the
companies we train.
Mr. CRANE. Thank you.
Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I would like to thank our witnesses for their testimony
today
And for appearing before us today. And I hope when you
leave here you will see that not everything in Washington is
locked down. We agree on a lot, especially when it comes to
Main Street America.
Without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witnesses to the Chair which will be forwarded to the
witnesses. I ask the witnesses to please respond promptly.
If there is no other further business, without objection
the Committee is adjourned.
[Whereupon, at 12:02 p.m., the Committee was adjourned.]
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