The presidential candidates are discussing a myriad of key issues that could materially impact middle-market businesses, including everything from increasing operating costs to diminishing the local labor pool. As we make our voting decisions, it is critical for us to consider these and other issues and determine how our businesses may be affected.
Following is an overview of my take on four of the hottest issues likely to impact middle-market businesses: healthcare law, immigration, taxes and expenditures, the minimum wage and benefits.
Healthcare law. Some candidates want to eliminate Obamacare, some want to drastically change it, and some want to tweak it — any of which could change the benefits and/or costs for middle-market business owners and their employees. One thing many people agree on is that totally eliminating Obamacare is not an option. Some fundamental questions to consider: How would these scenarios affect your business and your employees? How will the proposed changes affect the costs for those covered, including higher premiums and/or higher taxes? Moreover, can you really take away what has already been given? Unfortunately, with all the rhetoric and one-liners without substantive, detailed proposals, not enough light has been shed on the actual impacts of the proposed changes.
In the spotlight: healthcare law, immigration, taxes and expenditures, the minimum wage and benefits.
Immigration. Candidates have varied views concerning the accessibility of much-needed H-1B visas as well the availability of other types of visas presently available permitting potential employees to immigrate legally. Depending on the outcome of the election and the policies adopted as a result, you might lose some of your existing employees or not be able to bring in new employees — all of which could have a negative effect on your business. H1-B visas and other methods of legal immigration are critical to filling the ongoing void in terms of access to qualified candidates with the right skill sets, which is causing many job openings to remain unfilled and is hurting middle-market businesses.
In addition, the United States is noted as a country that provides an education for the rest of the world. Some candidates might require foreigners who have received an education in the U.S. to leave the country immediately upon graduation. What a waste of our resources! It is important to consider how the loss of this potential employee talent could impact your middle-market business.
Our growing population is one of the main reasons the U.S. has enjoyed continued growth. This population growth has been driven to a large extent by immigration, which has supported the success of our middle-market businesses. We need a sensible immigration policy that allows appropriate people to immigrate to the United States so all businesses will have access to the quality talent they need.
Without a doubt, the outcome of the upcoming presidential election will have a significant impact on South Florida’s economy and middle-market businesses.
Taxes and expenditures. Tax rates are likely to change. Whether we get a major overhaul to the tax system remains to be seen. Some advocate large cuts in government spending while others would expand government spending. Some candidates advocate an increase in taxes while others advocate a reduction. Others argue for a flat tax. Some may support the implementation of programs to encourage companies to bring more money back to the U.S. from out of the country to increase domestic investment or distributions to shareholders. This could help stimulate growth. Depending on what economic school you subscribe to, how you decide to vote and what ultimately happens with our tax rates and government expenditures, our economy could either contract or grow.
Minimum wage and benefits. Some candidates support an increase in the minimum wage and benefits, and an increase in entitlements. Few, however, have provided a realistic estimate of the costs or meaningful proposals on how to realistically pay for any increase. Other candidates advocate a reduction in entitlements, which by some estimates now total approximately 48.7 percent of the federal budget. They believe the growth is unsustainable. The costs on middle-market businesses will continue to increase and could have a negative effect on the economy.
Candidates have different views on wages. Some favor raising the minimum wage, which could lead to increased labor costs and force some business owners to cut jobs. It could end up causing middle-market business owners to deploy more technology to reduce overall costs of labor, and therefore eliminate jobs. This is a very difficult issue to tackle, as it involves a delicate balancing act between a sustainable wage and the labor costs of running a business.
Without a doubt, the outcome of the upcoming presidential election will have a significant impact on South Florida’s economy and middle-market businesses. It is important to invest the time to do your research and closely evaluate, among other things, how each of the candidates, if elected president, would affect your and the country’s bottom line.
James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at firstname.lastname@example.org or via LinkedIn at https://www.linkedin.com/in/jamesscassel. His website is: www.casselsalpeter.com