By Dennis Nixon
AUSTIN, Texas (Texas Insider Report) — For the past year, Texans have suffered along with the rest of the country through the worst global pandemic in the past century. COVID-19 has pummeled the economy, forcing nearly one in five restaurants to permanently close.
A September 2020 report in Fortune noted that six months into the pandemic, nearly 100,000 businesses that had temporarily shuttered for COVID were subsequently closed for good. Unemployment surged, and data suggest that Latino & Black Communities suffered a disproportionate economic impact.
Now, a year or more into the pandemic, we can finally begin to see light at the end of the tunnel.- Vaccine distribution is picking up steam, and efforts to slow the spread of the coronavirus have been increasingly successful.
- Public health indicators are pointing in the right direction, which in turn creates significant optimism for an economic recovery.
- We are at a critical juncture, a moment in time when the decisions we make as a country can determine whether that potential becomes reality, or whether the pandemic leaves a long-term dent in our nation’s prosperity.
Take the “essential business” designation, for example. By and large, it is large corporations that are deemed essential, while mom-and-pop restaurants and retailers were told they could not operate for fear of spreading the coronavirus. Even when mandatory closures were lifted, the health protocols made doing business much costlier.
Though the push for increasing the federal minimum wage to $15 an hour didn’t make it into the final version of Congress’ third stimulus package, the issue is alive and well, with advocates seeking to revive it in future legislation.
Make no mistake: A $15 minimum wage would be the death knell for many small businesses, particularly those in border communities that have been hit hard by the pandemic and the continuing border closures.
Family-owned restaurants, retailers and other small businesses work hard to eke out narrow margins. After a year of mandates capping capacity, stop and go closures, forcing social distancing and other public health-related measures, small businesses are struggling to survive.
More than doubling the minimum wage would be the final straw. It’s a wage hike that national corporations may be able to absorb, but small businesses fighting every day to keep the doors open would have to pass on those additional costs to consumers, who themselves have been hit hard by the economic downturn.Additionally, a national minimum wage of $15 doesn’t account for all the individual state differences – and even differences within the same state – in the cost of living and prevailing wages. One size does not fit all.
The problem is that most politicians at every level don’t have a grasp of the complexities involved in successfully running a business. You can’t merely flip a switch and bring small businesses back to life. These companies serve as the economic backbone of every town across Texas and throughout the nation, and now we need to make a concerted and concentrated push to ensure they can continue to bolster the foundations of our communities.
Yes, we need direct stimulus that supports small businesses – but we also need policies that ensure the viability of those small businesses.
In Texas, our border communities thrive on cross-border commerce. But they’ve been hammered by border closures that have no basis in science. After more than a year, it’s time to re-open our border to normal traffic.
The American people have bailed out major corporations because they’re “too big to fail.” Well, we cannot fathom an America that allows small business to collectively fail or, worse, causes them to fail because of bad policies.
This country was built by enterprising Americans who poured every ounce of their being into their successful enterprises. And to no fault of their own, they’ve endured the toughest economic crash since the Great Depression.It’s time to put politics aside and do what’s right for small business.
Dennis E. Nixon is CEO of International Bank of Commerce in Laredo, and Chairman of the Board of International Bancshares Corp.
