Small businesses are the backbone of the American economy. According to Maryam Mohsin, In 2021, 32.5 million small businesses were reported in the U.S., and they provided 1.5 million jobs. This explains why small businesses are essential to U.S. economic growth. Nonetheless, America’s small businesses are facing a very critical moment.
The U.S. is still in the middle of the COVID-19 pandemic, and the domestic economy contracted at an annualized rate of 32.9% in the second quarter of 2020. This was the deepest dive since the Great Depression.
Moreover, there are other challenges that small businesses are facing, such as the minimum wage increases because of inflation rises.
In addition, the American small businesses will need to learn how to deal with the many lawsuits related to the coronavirus pandemic, the emergence of unions disputing the fundamental rights of workers, and substantial transformations in the workplace to include human well-being.
In this Remoto Workforce blog post, we explain how and why America’s small businesses can successfully face this critical moment for the national economy.
The Impact of the COVID-19 on Small Businesses
As the coronavirus disease continues to cause death and human suffering, even with the availability of vaccines, small businesses fear the economic impact.
Indeed, the pandemic has meant a reduction in income for small businesses, which has led to higher prices to guarantee companies’ sustainability.
Today, what prevails among small business owners is undoubtedly pessimism because of increases in inflation, prices, and payrolls, lawsuits, and union demands.
How Can Inflation Rises Impact Wages, Prices, and Costs of Production?
One of the most significant challenges for U.S. businesses is rising payrolls because of inflation and price changes and increasing wages. Typically, an increase in inflation and prices represent additional costs that companies must face.
In other words, when inflation rises, the prices of goods and services also increase, and companies must raise their prices to face production costs. This decreases the purchasing capacity of consumers, which can lead to lower demand for goods and services.
This situation puts the U.S. in check. We recommend you watch this video to learn more about how Biden’s proposition regarding a 15$ federal wage might affect small businesses and the entire economy.
How can you deal with this situation? First, you can analyze current transformations in the U.S. economy and explore how the labor market is developing to expect measures to face inflation, prices, and payroll prices. You can learn more about other measures to face these circumstances here.
In addition, you can learn how to plan your staffing cost to make your business operations more productive and efficient in this blog post.
How to Face Labor Lawsuits?
The COVID-19 pandemic has forced many small businesses to change how they operate. Some companies had to close their doors because of the health crisis, while others pivoted their businesses to survive in these difficult times.
However, the changes that businesses have had to make because of the pandemic have also opened up a new legal area: employers’ lawsuits related to the COVID-19.
Several lawsuits have been filed against businesses, alleging that they did not do enough to protect their employees from the virus.
For example, a group of Walmart workers in Ohio filed a class-action lawsuit against the company, alleging that it did not provide them with adequate personal protective equipment (PPE) or do enough to ensure social distancing in the workplace.
Another lawsuit was filed against Amazon by workers in New York who allege that the company did not provide them with PPE or do enough to ensure social distancing. As a result, the first union emerged in Staten Island to struggle for the fundamental rights of workers.
If you are a small business owner, it is essential to be aware of these lawsuits and take steps to protect your business.