| Garrett Lance, Policy Associate

Small Businesses Using Alternative Methods to Raise Capital

Most small business owners are financing their businesses without the help of loans, despite increased access to capital, according to a report by financial information firm Sageworks. 

Only 23 percent of current small business owners have ever applied for a small business loan, while nearly 77 percent have chosen other means of funding.

Instead, 59 percent of owners used personal savings to start their business and nearly 30 percent didn’t need any funding at all.  Increasingly, non-conventional sources of funding, like crowdfunding, are also removing barriers to capital.

Most business owners – 63 percent – chose not to apply for a loan because they didn’t want to take on debt. Another 24 percent found alternative funding because they didn’t think they would be approved for a loan.

Sageworks Chairman Brain Hamilton thinks this might be a good thing.

“That businesses have greater access to capital is good news,” he said. “But, it’s even better news that they’re being cautious about accepting that capital and debt.”

Posted In: Economic Trends
| Garrett Lance, Policy Associate

President signs bill to strengthen workforce development

On Tuesday, President Obama signed into law legislation that revamps federal training programs to help workers develop the skills they need to compete in the global economy.

The Workforce Innovation and Opportunities Act, which will eliminate duplicate programs and address the “skills gap,” received overwhelming bipartisan support in both the House, with a 415-6 vote, and the Senate, with a 95-3 vote.

While the U.S. faces a 6.1 percent unemployment rate, 4.6 million job openings are not being filled because businesses cannot find qualified applicants, particularly in skills-based jobs.

The act addresses this gap by including the following provisions:

  • Streamlines job training by eliminating 15 duplicate or infeffective programs
  • Applies unifor performance indicators for all federal workforce programs
  • Maintains state-level funding and eliminates the "sequence of services" to allow flexibility in addressing local needs
  • Focus programs to address skills needed for industries with high worker demand
Posted In: Jobs
| Garrett Lance, Policy Associate

House Passes Short-Term Transportation Patch with Bipartisan Support

The House voted Tuesday to provide funding for highway and transit projects through approximately May 2015 in response to a looming shortfall in the Highway Trust Fund. Without action, many transportation construction projects around the country would come to a halt beginning August 1 because federal funding for the states to pay workers and purchase supplies will be cut by nearly a third.

The bill received bipartisan approval, with a vote of 367 to 55. Backers included 186 Democrats and 181 Republicans, while 10 Democrats and 45 Republicans opposed it. The  bill, which President Obama has indicated he will sign if passed by Congress, now moves to the Senate for consideration.

The Highway Trust Fund is the main source of federal funding for repair and construction of roads, bridges, and mass transit. Current projections indicate that the fund will be become insolvent by the end of next month. The bill provides additional funds to sustain HTF spending, which would otherwise be cut by 28 percent on August 1, threatening up to 700,000 jobs.

The bill approves a $10.8 billion transfer to the Highway Trust Fund, to be paid for using customs fees, pension smoothing, and excess money from a fund to repair leaking underground fuel storage tanks. 

While the bill passed this week averts the immediate transportation funding crisis, long-term funding for federal transportation projects remains in jeopardy. Adding to the uncertainty, Congress has failed to pass the standard surface transportation spending authorization legislation in recent years, and since 2009, has instead passed nine short-term bills. The uncertainty has caused many states to delay the start of new projects.

The House plan averts an immediate crisis, but business and community leaders from around the country continue to urge federal officials to develop a long-term funding plan that gives states and localities the certainty they need to make longer-term investments.

Business Forward will continue to keep you informed with new developments on this issue. Learn more about the crisis in transportation funding here

| Shumway Marshall, Digital Director

EPA Administrator Gina McCarthy to Talk with Business Leaders

 Sign up for a conference call with Gina McCarthy

Business leaders from across the country – from manufacturing and restaurant owners to insurance agents and farmers – have said they are experiencing losses due to severe weather. These events are becoming more frequent and increasingly catastrophic because of climate change. Proposals from the Obama Administration, including the new carbon pollution proposal from the EPA, aim to slow climate change.

You’re invited to a conference call on July 24 with Gina McCarthy, Administrator of the Environmental Protection Agency. You’ll participate in a discussion about what the Clean Power Plan means for America’s businesses.  This call will also be an opportunity to share your thoughts and questions directly with Gina McCarthy.

What: Conference call for business leaders with EPA Administrator Gina McCarthy
When: Thursday, July 24 at 4:00 p.m. ET / 1:00 p.m. PT

Listen to the full call:

 
Posted In: Business Forward Events
| Garrett Lance, Policy Associate

Bipartisan Businesses Leaders Urge Congress to Break Immigration Impasse

Three of America’s most influential business leaders, Sheldon Adelson, Warren Buffett, and Bill Gates may disagree on politics, but they do agree on one thing: immigration reform is vital for the growth and competitiveness of the U.S. economy. 

The three businessmen argue in the New York Times that Congress must pass immigration legislation that advances America’s humanity and self-interest, including our economic interests.

“People willing to invest in America and create jobs deserve the opportunity to do so.”

They broadly propose legislation that removes limits on the number of visas given to legal immigrants with a graduate degree in a STEM field, and allows illegal residents to obtain citizenship, after they’ve earned it.

Gates, Buffet and Sheldon believe that partisan politics should not hinder needed reforms that will stimulate the U.S. economy:

"The current stalemate – in which greater pride is attached to thwarting the opposition than to advancing the nation’s interests – is depressing to most Americans and virtually all of its business managers. The impasse certainly depresses the three of us."

Read the full editorial > 

Posted In: Immigration Reform
| Elizabeth Kerr, Director of Communications

Business Leaders Brief VP and DOT Secretary on Need for Transportation Funding

Vice President Joe Biden and U.S. Transportation Secretary Anthony Foxx met with business leaders yesterday to gather input on how investment in the nation’s  transportation infrastructure would affect their companies. The meetings were part of an all-day briefing hosted by the White House Business Council and Business Forward.

“Transportation used to have bipartisan support, but now we’re busy having philosophical discussions about government spending,” said U.S. Transportation Secretary Anthony Foxx. “The business community will have a critical role in standing together to support smart public investments in infrastructure projects.”

More than 40 business leaders, including executives from large manufacturing and shipping companies, expressed concerns that the United States is falling behind other industrialized countries that are investing heavily in transportation infrastructure. While China spends around nine percent of its GDP on infrastructure, the United States only spends around two percent. 

“Infrastructure investment is critically important to our economy's ability to compete successfully in the global marketplace—it is literally the foundation on which the nation's economy functions,” said Leif Wathne, vice president of highways and federal affairs for the American Concrete Pavement Association.

During the discussion, business leaders explained how uncertainty surrounding funding for the Highway Trust Fund, which pays for highway construction and repair projects, harms their ability to begin new projects and hire new workers.

One business leader described how many of his contractors who build bridges and roads find that the starts and stops of public funding add enormous, wasteful costs to projects. He said that some may think that this is business as normal, but it doesn’t have to be. Successful companies don’t work like that.

The reserves in the Highway Trust Fund could fall to critical levels as early as August 1 if Congress doesn’t act, which could dramatically disrupt the movement of goods across the country, increase congestion, stall 100,000 construction projects, and put up to 700,000 jobs at risk.

To view more photos from the event, click here.

Posted In: Business Forward Events

The Bureau of Labor Statistics reported that the economy added 288,000 jobs in June, marking 51 straight months of private sector job growth and five months of job growth over 200,000. The unemployment rate fell from 6.3 percent to 6.1 percent, the lowest rate since September 2008.

On Monday, Business Forward hosted a webinar with Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury, who presented an analysis of the June jobs report.

Among the highlights:

  • Job growth was widespread across sectors. The professional and business services industry, which added 67,000 jobs, had the greatest employment gains followed by retail trade, leisure and hospitality, and health and education services.
  • In 49 of the last 50 months, more job seekers stopped looking than found employment. The retirement of the baby boomers may be contributing to the shrinking labor force, but even then, the labor market is much weaker than the official unemployment rate. 
  • While job gains were strong, much of the growth came from part-time hiring. One-third of these workers were part time for economic reasons, meaning their hours had been cut or they were unable to find full-time work.
  • One listener asked why job growth has been much stronger in some states than others. Dr. Hunt explained that the shale gas boom has driven growth in places like North Dakota, while the housing crash has hurt some states more strongly, such as Arizona. Additionally, states with more manufacturing and construction jobs often have greater fluctuation in job numbers.

Dr. Hunt also touched on the housing market. Fewer young adults are buying houses, instead renting apartments or living with family. Low household formation is holding back the housing market, which may be having an effect on the overall economy and thus, the labor market.

 

For more information, Dr. Hunt’s slides are posted below:

 

Posted In: Jobs

In less than a month, the federal government may not be able to pay for ongoing highway projects, which could dramatically increase congestion and put up to 700,000 jobs at risk.

The Department of Transportation announced last week that reserves in the Highway Trust Fund would fall to critical levels by August 1. At that point, the trust fund will not be able to fully pay for the highway construction and repair projects that have already been approved by the states, and will have to begin cutting back. These cuts could lead to job losses dramatically slow the movement of goods across the country, and cause disruptions in many businesses’ supply chains.

On Wednesday, Business Forward will host a free conference call with Transportation Secretary Anthony Foxx on the status of the Highway Trust Fund and the President’s Grow America Act to provide stable funding for the country’s transportation infrastructure. Register for the call here.

American Businesses Depend on Efficient Highways

Businesses depend on the nation’s road infrastructure for shipping goods, ensuring workers arrive on time, and allowing customers to visit their stores. About 82 percent of the 14.2 trillion tons of goods shipped every year is moved by truck. The country’s road network, especially the Interstate Highway System, is  essential to the smooth operation of business. The efficiency of our nation’s highway system allows America’s businesses to move goods more quickly and cheaply than their international competitors.

The rise of just-in-time logistics, by which businesses are minimizing their inventory costs, has made a functioning transportation network even more important.  (Business Forward detailed the fragility of this cost-saving tactic in its report on manufacturing and severe weather, which you can read here.) Inadequate road infrastructure may increase the frequency of logistics and supply chains disruptions, which have a significant impact on businesses’ bottom line. According to the Texas A&M Transportation Institute, traffic congestion cost the trucking industry $27 billion, which in turn raises shipping prices for American businesses.

Trust Fund Nears Insolvency

The Highway Trust Fund was established in 1956 to ensure steady funding of the nation’s roads and enable long-term planning. The trust fund is supported by user fees, predominately taxes on gasoline and diesel fuel that provide 90 percent of the revenue for the highway account and 80 percent of the revenue for the mass transit account.

However, revenues have not kept pace with spending, and the trust fund is approaching insolvency. Real revenues have declined over the past two decades for two reasons: 1) The gasoline tax of 18.4 cents per gallon has not been increased to match inflation since 1993; and 2) better fuel economy and declining car travel have led to less fuel usage, and therefore less revenue. The Highway Trust Fund needs to maintain approximately $4 billion in reserves to manage cash flows, but DOT expects the balance of the trust fund to fall below that critical level by August 1.

Short-Term Legislation for Long-Term Planning

While the Highway Trust Fund provides a dedicated revenue stream for transportation projects, Congress must still approve the levels of revenue and spending in an authorization bill. In the past, authorization bills covering 4 to 6 years were passed, to give states clear expectations of federal funding for long-term infrastructure investments. But since 2009, Congress has been unable to pass a long-term bill, instead passing nine short-term authorizations.

The current authorization, the Moving Ahead for Progress in the 21st Century Act (MAP-21) passed in July of 2012, only approved two years of spending and will expire on September 30. The new fiscal year for most states began on July 1, without a guarantee that funding will be available in the upcoming months. A new, longer-term bill would provide state DOTs with more certainty, which in turn should help businesses that rely on the road infrastructure.

A new highway bill is an opportunity for lawmakers to reevaluate our existing transportation infrastructure and match the need of businesses and consumers.

Join Secretary Foxx on Wednesday, June 9 in a conversation about how your business is connected to highway legislation and the importance of business input in the process.

Posted In: Jobs
| Shumway Marshall, Digital Director

June Jobs Briefing with the U.S. Treasury Department


The Labor Department's monthly jobs report is out, and the economy added 288,000 jobs in June. The unemployment rate also fell to 6.1 percent, its lowest since September 2008.

What does this mean for the economy and your business? Please join Business Forward for our monthly interactive webinar with Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury.

Can you make it to Monday's webinar?

     

What: Monthly Jobs Briefing Webinar
When: Monday, July 7, at 4 p.m. ET
Where: Your computer 

Participants will have an opportunity to ask questions live during the webinar or ahead of time on Twitter using #AskJobs. 

Posted In: Jobs
| Shumway Marshall, Digital Director

Secretary of Transportation Anthony Foxx to Talk with Business Leaders

Unless Congress acts, by the end of the summer the Federal Highway Trust Fund could be insolvent, putting jobs and critical road projects in many states at risk. If improvements and repairs to America's transportation system are stalled, it will disrupt supply chains and the flow of goods across the country.

You are invited to join a conference call on Wednesday, July 9, at 1:30 p.m. ET to talk with Department of Transportation Secretary Anthony Foxx on how the Administration's proposed GROW America Act will provide stable funding for our country's highways, bridges, transit and rail systems.

What: Conference call for business leaders with Department of Transportation Secretary Anthony Foxx
When: Wednesday, July 7 at 1:30 p.m. ET / 10:30 a.m. PT
Where: A unique dial-in and password will be sent to you when you register

 

*required

There will be time for you to ask questions, and you can submit them in advance by emailing info@businessfwd.org.