The business community has experienced a surge in optimism since President Donald Trump was elected, but those hopes have also been met with a high level of uncertainty.
Trump’s views on economic issues have come as welcome news for a business community who felt overburdened by federal policies, but the president has also sparked uncertainty from business owners awaiting to see how that agenda gets implemented.
“I’ve been impressed by the conflict between the uncertainty that business leaders feel and the optimism that they feel,” William Conerly, the president of the economic advising company Conerly Consulting, told InsideSources. “I’m kind of expecting the uncertainty side to win out, but there is a lot of optimism there.”
The National Federation of Independent Business (NFIB) found in a recent survey that optimism among small business owners has surged since Election Day. Business optimism during the last administration trended below average. The same survey showed uncertainty increased dramatically, as well.
“We think that’s tied to their expectations of policy changes and their uncertainty about whether those changes are going to take place,” NFIB’s Jack Mozloom told InsideSources. “They are optimistic, they like what they see so far from Washington, but promises aren’t worth the paper they’re written on, its time for some action.”
Former President Barack Obama implemented numerous labor regulations in an attempt to protect workers. Critics have contested the regulations actually hurt workers by depressing economic growth and employment opportunities. Trump has looked to decrease the regulatory burden in order to create a more robust economy with job opportunities.
“They like the direction the president is pointing to with his policy pronouncements. They like a lot of the actions he has taken, but they still want to see results,” Mozloom said. “Our members, small business owners, are keenly interested in what’s happening in Washington and they pay close attention, and that affects their outlook, that affects their optimism.”
Business owners are primarily focused on regulations, taxation, and healthcare. The president has been able to rollback some regulations, but healthcare and tax reform remain unresolved. The National Association of Manufacturers (NAM) estimated that total federal regulatory costs reached $2 trillion in 2012 alone.
Trump promising to decrease regulations is welcome news to businesses owners, but it’s not enough. Businesses owners also want to see results. The administration is likely going to be judged by business owners based primarily on the perception it’s working to meet those goals and the ability to actually deliver.
“But there needs to be progress on these things and it needs to be serious,” Mozloom said. “It needs to be quantifiable, and to the extent that they can show small business owners that they really are working on this stuff, and there’s going to be a positive result at the end, I think you’ll see small business optimism remain high, and that’s going to translate naturally into economic growth for the country.”
The National Labor Relations Board (NLRB) is one place the president could institute some major changes. The board works as an independent judicial body for overseeing unions and labor dispute cases. Critics have contested the board overstepped its authority by using case precedent to unilaterally change labor law.
“That has been a huge business community priority since election day,” Michael Layman, vice president for regulatory affairs at the International Franchise Association, told InsideSources. “We’re still anxious for NLRB nominations and confirmations in the days ahead, but overall, as mentioned, franchise business people are much more optimistic than they were a year ago, and a lot of that is due to the new administration.”
Trump named Philip Miscimarra to serve as the chairman of the board April 24. Miscimarra was already a member and serving as the acting chairman. The Senate still needs to approve two more nominations before the administration gains majority control.
Trump has also managed to fill appointments that are critical to his economic agenda. Alexander Acosta being confirmed as labor secretary is one of the more critical appointments for businesses since he will be overseeing national workforce regulations.
The business community also believes the administration will allow for more regulatory clarity. The onslaught of new regulations during the last administration left many business owners in a rapidly changing and complex legal framework. Trump has already started to rein in those regulations.
“I think the biggest reason for optimism among business people is, again, the restoration of more regulatory certainty,” Layman said. “Business people want to know what the rules are so that they can abide by them, and grow their businesses, and create jobs, and serve their communities.”
President Obama entered office during a severe economic downturn roughly a decade ago. The recovery was unusually sluggish and only started to see significant improvements in recent years. Mozloom adds that the sluggish economic growth during the last administration was partially due to the wave of new regulations.
“They can’t engage in business activities if they can’t anticipate the regulatory climate, or the tax climate, or the cost of healthcare,” Mozloom said. “Those are major things they have to consider before they can go out and borrow money to buy a pizza oven, or put in a patio, or extend their driveway.”
Trump is not the only reason his administration has faced uncertainty from the business community. He entered office at a time politics and economics have been changing rapidly both domestically and internationally.
“We live in uncertain times, that’s the reality of the administration, that’s the reality of the world, and I think he’s dealing with that as president,” Alfredo Ortiz, president and CEO of the Job Creators Network. “Everyone has had that experience of being on the job for the first time. There’s a learning pain, there’s growing pains, and I think that’s to be expected from anybody.”
Trump has been able to rollback some major regulations from the last administration. The president reduced offshore drilling restrictions and ordered federal agencies to withdraw two regulations for every new one implemented. He also signed a bill ending a rule that blacklists companies with labor violations from getting federal contracts.
Trump is also looking to overhaul the tax code so that it promotes economic growth. The administration unveiled its tax reform plan last month during a press conference. The president hopes to simplify the tax code while also lowering rates in order to reduce the tax burdens businesses currently face. The plan reflected many of the same ideas that were detailed in a tax blueprint released by congressional leaders last year.
The Job Creators Network released a recent survey which found 60 percent of small business owners believe the president has a good agenda that will be beneficial to their employees and customers. Tax reform was one of the more important issues for business owners surveyed.