March 10, 2023
By Frank Knapp Jr.
The S.C. Small Business Development Center and the Darla Moore School of Business recently conducted the 2022 Small Business Needs Assessment Survey.
One key finding: “The single largest operational challenge that businesses report facing in 2022 is a difficulty in hiring and retaining staff. Among businesses who reported attempting to hire over the past twelve months, nearly 85 percent reported hiring to be either a major or minor challenge. This is especially prominent among businesses operating in construction, health care, and transportation & warehousing.”
The labor shortage is a serious problem for all businesses, but especially for small businesses that have difficulty competing with big businesses with more financial resources.
It is important to note that the Federal Reserve considers a 5% unemployment rate to be “full” employment and South Carolina has approximately 3.3% unemployment rate.”
There are a number of reasons for those who are unemployed such as geography mismatch, inadequate education or training, lack of transportation, unaffordable/unavailable childcare, and more.
Some of these barriers are simply insurmountable. However, there are two solutions we should focus on that offer the best path forward to solving our labor shortage.
First, there are thousands of formerly incarcerated in our state convicted of non-violent crimes who can put an immediate dent in our labor shortage crisis.
Approximately 650 to 700 inmates are released each month from the South Carolina prison system. Many of these men and women are ready and willing to work but the obstacles of having a prison record along with possibly having no family support system, transportation or even a place to live results in many not being able to get a job.
We do have a few efforts to help these South Carolinians get re-established in our communities, trained and be placement ready. Programs such as Joseph Outreach, REEMERGE, Turn90, and even within our Department of Corrections are trying to make a difference. However, this process is very slow, and we haven’t scratched the surface of this solution.
Our S.C. Legislature should put more of our state resources into tapping this solution to help our small businesses.
Second, our state and the entire country simply need more people.
An analysis of the 2020 Census data by Brookings led to the conclusion that our nation is in an “unprecedented demographic stagnation” with “the smallest decade-long growth rate in America’s history” with a “rate at nearly zero.”
Our national immigration laws need major reform that will allow millions of foreigners who have the skills, education and desire to work to legally come into our country.
The Brookings report concurs saying, “One way to secure more rapid growth of the youth population would be to increase immigration…given our rapidly aging native-born population, immigration will ensure growth — especially among the critical youth and labor force populations.”
Clearly, the solution of immigration reform must be addressed by Congress. But fortunately, U.S. Sen. Lindsey Graham of South Carolina holds the key to getting a bipartisan immigration reform bill passed that will also need to address border security.
The formerly incarcerated and legal immigrants offer the best chance to solve our labor shortage. That is where our attention and efforts need to be.
Knapp is the president/CEO of the S.C. Small Business Chamber of Commerce. He has served on the S.C. Small Business Development Center State Advisory Council since 2012.