Bay Area business says economic uncertainty stalling workforce growth
New data from the National Federation of Independent Business reports that after a hiring spike immediately following the pandemic, the number of businesses that said they intend to hire has dropped steadily, now the lowest since the COVID shutdown. And the number of "unfilled openings" has plunged as well, not because they were filled, but because the businesses decided to do without them.
"We haven't seen these levels since 2020, May of 2020, so there's a lot of hesitancy out there about investing in their business with the current business climate," said Holly Wade, Executive Director of the NFIB Research Center.
That's the situation for Steve Heckeroth. He founded Renewables Inc., a small company in Santa Rosa creating tiny electric remote-control tractors for agriculture. He has eight employees on the payroll, including Jaden Bass.
Bass was hired 2 ½ years ago with zero experience in manufacturing. But with a good work ethic and a lot of on-the-job training, he has become a valuable worker for the company. He said he didn't think he would have gotten the same opportunity with a large company.
"Absolutely, especially today," he said. "I think most of these businesses kind of filter people in ways that I don't think is really fair, necessarily. And I think that working with the small business gives you an opportunity to kind of put yourself forward instead of just an AI screening you."
Heckeroth took a chance on Bass, and it paid off.
But since then, tariffs delivered a big blow for a while, and then the Trump administration removed all incentives for electrified technologies, putting the brakes on innovative ideas like the tractor, and the hiring of new workers at the company.
"We're in a position now where we could go full steam ahead if we could get some investment," Heckeroth said. "But the investors are really gun-shy of doing any investing in any new technology because it's not supported."
Heidi Pickman, with the small business support group, CAMEO Network, said the same thing is happening in small business sectors all across the country.
"The idea is that most small businesses have shorter cash runways and they feel the effects of the economic downturns before the larger businesses," she said. "They're the warning signals. And we've been hearing them for over a year."
The hiring slump really matters right now, because government food benefits now carry a 20-hour per week work requirement. And soon it will apply to MediCalas well, as potentially a million Californians begin looking for work to maintain their coverage. Bob Brownstein advocates for workers' healthcare with a group called Working Partnerships, USA.
"If you're working 15 hours a week and you're trying to find the extra five hours, you're not going to find the extra five hours at Intel or Cisco," he said. "You're going to find them at a small business. If small businesses aren't hiring, you're not going to find those extra hours and you'll be denied health coverage."
Brownstein said he thinks that's the ultimate goal of the work requirements: to get people off the programs rather than putting them to work. In Santa Clara County alone, 55,000 people are expected to lose their food benefits, and 129,000 will likely begin losing their MediCal coverage when its work mandate kicks in on January 1.
