Brian Calley Shares Small Business Outlook at Royal Oak Chamber Luncheon (Crystal A. Proxmire, April 30, 2024) Royal Oak, MI – The Small Business Association of Michigan serves over 32,000 businesses across the state with resources, education, connection, and advocacy to help entrepreneurs, their employers, and their communities thrive. Part of that means sharing wisdom at events like the Royal Oak Chamber of Commerce Small Business Economic Outlook Luncheon held on April 23 at North End Tap Room. SBAM President and CEO Brian Calley was the keynote speaker for the event. Calley has a background in both business and in government, having worked in community banking as well as serving two terms as State Representative and as Lt. Governor of Michigan from 2011-2018. He shared a number of stats concerning the population and workforce in Michigan, as well as new regulations that small business owners should be aware of. Among those changes is the Corporate Transparency Act, which requires business owners to submit information about owners and invested parties to the Federal government in an effort to prevent tax fraud, money laundering, and the financing of terrorism. Businesses created before this year must register by the end of the year. Those created this year must register right away. Those who fail to register could face a two year felony. The MSBA is challenging the requirements in court, arguing that the act violates the Fourth Amendment right against unlawful search and seizure. MSBA has three main arguments, listed on their website: (1) The CTA unlawfully authorizes the search and seizure of the sensitive, personal information belonging to millions of innocent small business owners and employees without any suspicion of wrongdoing; (2) The CTA exceeds the bounds of Congress’ legislative authority; and (3) The CTA is unconstitutionally vague and imposes criminal penalties. Even though there is a court challenge taking place, business owners should still register to make sure they are in compliance with the law, Calley said. Another change in regulation impacting small businesses is the US Department of Labor’s change of independent contractor standards. The US Department of Labor is essentially going back to pre-Trump administration standards for whether someone is working as an employee or as an independent contractor. According to the Department of Labor, “This final rule continues to affirm that a worker is not an independent contractor if they are, as matter of economic reality, economically dependent on an employer for work.” The DOL website explains the factors and other FAQs. This is another situation where failing to comply with the law could be devastating as a business owner could be charged with payroll fraud if they aren’t doing the right things. SBAM also has information on their website to help. Beyond monitoring and alerting members to changes in regulations, the SBAM also keeps up on data related to the economic environment and how it impacts small businesses. Calley shared that the Consumer Price Index is up. He explained that “The rise in cost is very much felt compared to the rise in wages.” At the same time, Michigan is struggling because, simply, “We don’t have enough people.” Calley is on the Board of Growing Michigan Together, an effort launched by Governor Gretchen Whitmer to address the challenge of population decline. The effort looked at the causes of population decline, and ways to reverse the trend. (For a more in depth look at this effort, check out the previous Oakland County Times story.) One factor Calley shared was “domestic migration,” meaning when people move from one state to another. Looking at data by U-Haul truck rentals, Michigan ranks 46th out of 50 for where people are moving to. The top five are Texas, Florida, North Carolina, South Carolina, and Tennessee. The only states with fewer people moving in are New Jersey, Illinois, Massachusetts and California. Another issue is that Michigan has an aging population, with a declining number of births. “This isn’t just a Michigan problem,” Calley said. “It’s a Western world problem. So many countries are in this boat with us.” He said he did not know how to encourage people to have more children. “Some people suggest a tax credit, but I don’t know anyone who says I’d like that tax credit; let’s have a baby,” he said. Another interesting fact is that when people do move to Michigan, it tends to be on the West Side of the state rather than the Metro Detroit area. Also, it seems the Canadians have gotten good at attracting Michiganders away. “Ontario has grown as fast as Texas and Florida,” Calley said, debunking the idea that warm weather is the determining factor. “Canada has mastered capturing people after they get their education here.” The most likely people to leave Michigan are those that are young, and those that are more educated. Population shifts combined with lagging behind in higher education and trades certifications mean that the demand for talent still outpaces supply. Calley shared that in 2014 there were 34 applicants for every 10 job openings. And in 2023 there were 9 applicants for every 10 job openings. Getting into jobs that require college education, and the numbers get even more challenging. “We’re filling 20% of the need,” he said. “This is a dramatic change.” Education is an important factor in workforce development, attracting businesses, and encouraging Michiganders to stay. And that problem may take a while to solve. Looking at the students right now who are in 9th grade, only 1 in 5 of them are likely to get a degree or other credentials eight years from now. Calley explained there are currently 122.2K ninth graders. Of those 103.9K will graduate high school. 67.6K will enroll in college or trade school. And only 24.8K will graduate on a four year timeline. That works out to just 20.3%. In spite of the economic and labor challenges, Calley said “People who run small businesses tend to be optimistic, because we sort of have to be.” The SBAM provides many resources for learning and optimism, including providing a community for business owners specifically (whereas a Chamber of Commerce has owners, independent contractors, management, and employees), advocacy for businesses, and ways to collaboratively save money on businesses expenses. Learn more about SBAM at https://www.sbam.org Also learn more about the Greater Royal Oak Chamber of Commerce at https://www.royaloakchamber.com/
This content was originally published here.
