On January 11, the U.S. Chamber of Commerce released their annual American Growth Agenda for 2017. This agenda outlines policy priorities that the Chamber has put together with the ultimate intention fueling economic growth. This year, they have proposed several prominent changes for the current administration that affect many sectors, including the staffing industry. We have outlined several of these changes below, along with the impact on staffing firms all around the country. [more]
One aspect that the Chamber is focusing on is tax reform. They point out in their agenda that the current tax code is cumbersome and does not promote growth, and are fighting for a simpler and more streamlined approach. No major tax reform had taken place since the 1980s, but with Republicans controlling the White House, House and Senate, a major tax overhaul is likely.
President Donald Trump has proposed to slash the corporate tax rate from 35% to 15-20%, allow companies to immediately expense depreciation on capital spending, and implement a border tax on imports. Business-friendly taxes mean growth opportunities, and the staffing industry is likely to benefit twofold, from companies filling positions as well as their own ability to expand their workforce. However, some are less optimistic about this kind of tax plan, arguing that it didn’t work in the 1980s and is based on false supply-side economics premises. Whatever the case, a major tax overhaul is likely in the next four years and staffing companies should be aware of the implications.
Another hot topic for the American Growth Agenda is healthcare. The Chamber seeks to address the challenge of making quality health care more affordable, accessible and reliable by promoting effective private sector solutions to our health care challenges. For small businesses like staffing companies, providing healthcare can be a challenge. Small business owners face high costs, and under the Affordable Care Act start to incur penalties when they do not provide coverage to 50 employees or more.
The current administration has made it clear that massive healthcare reform is on the horizon, although the replacement timeline is still up in the air. Congressional members are waiting for first official actions from newly-confirmed Secretary of Health and Humans Services, Tom Price. While details of the replacement plan are scarce at this point, staffing firms should stay the course and remain compliant with ACA in the meantime, and expect big changes coming on the horizon.
While business regulations are necessary to ensure workplace safety and protect public health, the current compliance costs of $2 trillion and complexity of rules make for a challenging landscape. The Chamber supports a regulatory system that is fair for everyone, accounts for communities and businesses, evaluates the impact rules will have on jobs and small businesses, and protects economic and personal freedoms.
Donald Trump plans to roll back government regulations, including executive actions on immigration, climate change, the Affordable Care Act and the Dodd-Frank financial regulation law. Dodd-Frank in particular has ramifications for the staffing industry, because current regulations restrict banks from offering much in the way of credit to small businesses. A roll-back on Dodd-Frank could mean easier access to bank capital – although there are always other implicit costs to take in to account for staffing firms.
The American Growth Agenda also supports common sense immigration reform that boosts economic growth, creates jobs, and spurs innovation and entrepreneurship. They call upon the new administration to chart a balanced course that improves security and enforcement while modernizing America’s legal immigration and visa systems.
President Trump has already made some controversial immigration decisions, and more are sure to come. One area that relates to staffing is the H1-B visa program, which brings in skilled workers especially in STEM fields. Under Trump, the H1-B program will be restructured. Demand for high tech workers and tech contractor salaries will rise fast, and many companies will have to drastically change their recruiting strategies. Savvy staffing firms will take advantage of this and move to fill the gap.
It All Comes Down to Growth
The American Growth Agenda promotes policies that fuel economic growth, and staffing firms and other small businesses are likely to benefit from business-friendly reforms if they position themselves right. Advance Partners also believes in growth – it is the core of our business, to partner with staffing firms in order to set them up with the tools to grow. Talk to us today if you are interested in discussing more.