by John Arensmeyer – Founder and CEO, Small Business Majority
Any time disaster hits, people want to track and quantify the damage. What was the financial impact of a hurricane, how many jobs were lost because of the financial collapse, how many homes were destroyed by the tornado that just ripped through town?
This government shutdown is no different. It’s a disaster that’s taking money out of people’s pockets, killing jobs and harming small businesses and our fragile economy. And believe me, small business owners are definitely keeping track.
Jana Hirsekorn, owner of Village Pet Pals in Palm Beach, Fla., will lose $1,500 this month and won’t be able to pay her company’s liability insurance, which puts her business at risk.
Barbara Posner, owner of Preferred Staffing Group in Washington, D.C., has furloughed 80 of her 100 employees. One of them, an 8-months-pregnant woman, has to use her paid-time-off now to make ends meet instead of after her baby is born.
And Zach Davis, owner of The Penny Ice Creamery in Santa Cruz, Calif., has 6,000-square-feet of partially demolished space for a new restaurant that he’s in jeopardy of losing his shirt on because he was in the process of securing an SBA-backed loan when the Small Business Administration closed up shop.
These numbers are compelling, but what’s even more compelling are the real people behind them. Lawmakers in Washington are playing politics with people’s livelihoods. Clearly, this is no game to the small business owners and their employees who are suffering because of it.
While these stories illustrate the direct impact small businesses are suffering because of the shutdown, there are other, possibly more insidious, impacts small businesses and the economy will face if the shutdown continues.
First of all, prolonged dysfunction erodes consumer confidence and creates a huge amount of uncertainty that permeates the entire economy and restricts growth — as is clear with the situation Zach Davis finds himself in. Zach is on track to create new jobs. If the shutdown continues and he loses the loan, he loses his ability to make those new hires. The economic ramifications of those missed job opportunities can last well into the coming year and even beyond. Secondly, this is all happening in the fourth quarter — the most important time of the year for countless entrepreneurs. Slackening sales now has serious consequences on profits for the rest of the year and well into 2014.
The third, and most daunting repercussion is the possible consequences of Congress failing to find long-term solutions to the current shutdown and the impending debt ceiling issue — the nation will default on its debt on Oct. 17 if Congress doesn’t pass a bill to raise the ceiling. How many times can people think the government will shut down or the nation will default on its debt before they lose faith in the institutions of government that underpin the economy? A continual state of crisis is bad for consumer, investor and business confidence. Small businesses are finally starting to recover from the Great Recession, but they need economic stability and certainty if they’re going to continue in that resurgence.
The bottom line is Congress needs to come together to find a solution to this problem now and for the long-term. Small Business Majority launched a national sign-on campaign at the behest of small business owners in our network who are fed up with the Congressional dysfunction, asking small business owners to join together and let their representatives in Washington know they want a solution. Hundreds of small businesses across the country have already signed their name. But we need more.
The millions of small business owners and workers who are being impacted need the small business community to speak as one to let Congress know this can’t go on. When all is said and done, small businesses will get creative, many finding a way to keep their doors open. But despite their perseverance and creativity, some simply won’t make it if this continues much longer. For them, and for the future success of our economy, please visitwww.stoptheshutdown.com today and add your voice.