Like most other states, Ohio has not been exempted from the impact of inflation. A recent study released by the National Federation of Independent Business (NFIB) unveiled that every small business owner in the state is worried about inflation, supply chain disruptions, and labor shortages.
According to the study, 99% are concerned about the said issues, with nearly half (49%) more troubled about rising prices than any other problem. Ongoing labor issues were identified as the second-largest concern at 35%, while 15% said their primary issue was supply chain problems.
“Ohio entrepreneurs are seeing hiring issues compounded by supply chain issues and on top of that sky-high inflation,” said Roger Geiger, the executive director for NFIB in Ohio. “All these issues combined are dramatically increasing their costs, and these costs cannot, for a number of reasons, all be passed on to consumers.”
Ohio Secretary of State Frank LaRose also released data showing that new business filings in the state fell by 20% from March to April 2022 and 30% from April 2021 to April 2022. In a statement, LaRose lamented that rising inflation had lowered small company optimism to an all-time low.
“We’ve seen working Ohioans continue to pay the price for the current administration’s lack of leadership in reining in record high inflation,” said LaRose, who faces Democrat Chelsea Clark in the November general election. “Now, it’s Ohio small businesses who are left to suffer. The time for political games is over. It’s time for action. My message to Ohio entrepreneurs — I will continue to fight the bureaucratic incompetence in Washington and work with our legislative leaders to ensure the Buckeye State remains the destination state for starting a new business.”
Political games, for sure.
Officials should do everything they can to resolve the problem. However, the options offered to Ohio entrepreneurs may not be as appealing as they think. To remedy the labor deficit, one option could be to increase the number of immigrants legally permitted to work in the United States. Alternatively, the Biden administration may lessen President Donald Trump’s tariffs.
According to reports, American companies importing certain Chinese-made products have paid more than $100 billion in penalties since the tariffs were imposed.
Meanwhile, the Federal Reserve, which has been slow to move under Chairman Jerome Powell, has the actual capacity to combat inflation. Last month, the Federal Reserve raised its benchmark interest rate by half a percentage point. These steps will eventually reduce inflation, but they will raise interest rates and make borrowing more difficult.
LaRose understands that there is no win-win solution to the inflation problem. He is correct in hoping that those in Washington, D.C., who have the power to make a difference, will do so. However, bringing inflation under control would not be easy.
NFIB’s Roger Geiger, meanwhile, believes that now is not the best time to raise business taxes or fees, add any additional government mandates, or create impediments to hiring.
“While small business owners are usually optimistic, this survey shows they are facing significant economic challenges even while not yet fully recovered from the two years of the pandemic. If Ohio’s small business community falters, so will the entire state’s economy,” Geiger said.