Health Care Costs, Inflation Continue to Harm Small Businesses

August 15, 2024

Health Care Costs, Inflation Continue to Harm Small Businesses

Two reports issued this week by the nation’s foremost authority on small business issues throw into sharp relief the continuing difficulties Main Street, mom-and-pop enterprises are having with staying open and keeping people employed. The Small Business Problems & Priorities report, which is produced every four years by the National Federation of Independent Business (NFIB), was released August 15 and ranks the 75 issues, or, more accurately, struggles, that small business owners encounter in opening an enterprise and keeping it running. In the same week, on August 13, NFIB also release its monthly Small Business Economic Trends report. Both listed inflation as a major concern, and the Problems & Priorities also showed the cost of health care holding its first-place rank for the 38th consecutive year. NFIB Utah highly recommends everyone holding elective office or running for one to acquaint themselves with the Small Business Problems & Priorities report, which will give them the best education on setting policy affecting the Main Street enterprises of our nation. Highlights from NFIB’s latest Small Business Problems & Priorities report, published every four years since 1982 include:

Unchanged since 1986, the “Cost of Health Insurance” remains the number one chronic issue for small business owners.

The “Cost of Supplies/Inventories” moved up in importance from ranking 12th in 2020 to its current second place ranking – a direct result of historic inflation over the last two years.

“Interest Rates” topped the list by rising 43 positions from a rank of 56th in 2020 to 13th in 2024.

“For the last four years, small business owners have struggled with historic inflation, tax pressures at all levels of government, and uncertainty of what’s going to happen next,” said Holly Wade, Executive Director of the NFIB Research Center. “This survey helps the public understand the issues affecting the small business sector. Small businesses employ more than half of the private sector workforce, and this publication makes clear where lawmakers should focus their attention to strengthen Main Street and every community in which they operate.” Highlights from NFIB’s latest Small Business Economic Trends report, released the second Tuesday of every month, include:

Inflation remains the top issue among small business owners, with 25% reporting it as their single most important problem in operating their business, up four points from June.

Thirty-eight percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from June.

Seasonally adjusted, a net 33% reported raising compensation in July, down five points from June and the lowest reading since April 2021.

“Cost pressures, especially labor costs, continue to plague small business operations, impacting their bottom line,” said NFIB Chief Economist Bill Dunkelberg. “Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.” NFIB research (Jobs Report, SBET, Problems & Priorities) is of NFIB-member, small-business owners and not broken down by state. The average NFIB-member small business has between five and nine employees. Keep up with the latest on Utah small-business news at www.nfib.com/utah. Follow us on Twitter @nfib_ut. ### For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.