[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FROM NOTHING TO SOMETHING: THE STORY OF THE AMERICAN DREAM
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
FEBRUARY 28, 2023
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-002
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
51-185 WASHINGTON : 2023
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JACK ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MORGAN MCGARVEY, Kentucky
MARIE GLUESENKAMP PEREZ, Washington
HILLARY SCHOLTEN, Michigan
SHRI THANEDAR, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 2
WITNESSES
Ms. Zan Prince, Chairman of the Board, First Bank Texas.......... 5
Mr. Drew Davis, Founder and Owner, Crippling Hot Sauce........... 7
Mr. Roy Heim, President, Heim Construction Company............... 8
Ms. Corrine Hendrickson, Owner, Corrine's Little Explorers....... 10
APPENDIX
Prepared Statements:
Ms. Zan Prince, Chairman of the Board, First Bank Texas...... 35
Mr. Drew Davis, Founder and Owner, Crippling Hot Sauce....... 38
Mr. Roy Heim, President, Heim Construction Company........... 39
Ms. Corrine Hendrickson, Owner, Corrine's Little Explorers... 43
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
FROM NOTHING TO SOMETHING: THE STORY OF THE AMERICAN DREAM
----------
TUESDAY, FEBRUARY 28, 2023
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Representatives Williams, Luetkemeyer, Stauber,
Meuser, Van Duyne, Mann, Ellzey, Molinaro, Alford, Bean, Hunt,
LaLota, Velazquez, Mfume, Phillips, Landsman, McGarvey,
Gluesenkamp Perez, Scholten, and Davids.
Chairman WILLIAMS. Opening prayer and pledge. Please bow
your head. Heavenly Father, God of all people, help us, give us
the strength today and energy to make a difference, not only
for our districts, but for this great country. In your name, we
pray, amen.
Would you please join me in the pledge?
Okay. All right. I now call the first hearing of the
Committee on Small Business for the 118th Congress to order.
Without objection, the Chair is authorized to declare a
recess of the Committee at any time.
I now recognize myself for my opening statement.
I want to thank our witnesses for being here today and
understand that all of you have traveled a long way to share
your stories. We are extremely grateful that you chose to give
us your most precious resource, which is your time, to share
your firsthand experiences to inspire others to pursue the
American Dream.
As I have said before, this Committee seeks to be a voice
for main street America in Washington. And the goal today is to
learn more about the current state of small businesses from the
people who know it best: our country's entrepreneurs. And as
job creators, you are the driving force of our nation's
economy, accounting for more than half the payroll of this
entire country. More importantly, you have the backbone of your
local communities, though many of your struggles often go
unnoticed.
I've been carrying on my family business for over 50 years
and I understand the highs and the lows of being your own boss.
America's entrepreneurs have confronted numerous historic
challenges over the past few years. The COVID-19 pandemic, out-
of-control inflation, broken supply chains, high interest
rates, and a national labor shortage. But as the small
businesses have done countless times before, they endure.
Here on this Committee, we will work to create an
environment where businesses can thrive. Small business owners
dedicate their lives and finances to the products and services
they bring to the marketplace. An extra hour of paperwork is
one less hour they can tend to their business. Every inflated
tax is an extra dollar that could have been reinvested back
into the business and their community. Every job vacancy is one
more role a small business owner must cover themselves.
As we listen to these firsthand accounts, we salute the
small businesses who continue to fight and give selflessly back
to their communities. We are eager to enact policy solutions
that will help have a path toward success for both now and
success in the future.
I wanted to have this hearing on the American dream first
so we can celebrate the risk takers here today and across the
country who have worked countless days and nights to make their
dream a reality. I am excited to have all of you here today
with us, and I am very much looking forward to today's hearing.
With that, I want to yield to our distinguished Ranking
Member from New York, Ms. Velazquez.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. I would like to
welcome all of the witnesses for being able to be here and
share your experiences.
I would also like to welcome all of our new Small Business
Committee Members and welcome back those returning from the
117th Congress. The story of the American dream has been the
story of our nation's independent business owners, those who
take the reins of their own destiny, and bring ideas to life in
the marketplace. From the corner store to the tech start-up,
these risk takers embody the ingenuity and determination to
achieve the highest of American ideals. Not only do they serve
as essential economic anchors, providing the foundations of our
communities, they serve as the bedrock of our sprawling
democracy. They help distribute wealth and power, promote
competition, and provide opportunities for individuals to
achieve financial independence.
Over the past 3 years, the COVID-19 pandemic defined the
small business economy and presented numerous hurdles for our
nation's entrepreneurs. Congress recognized these firms as a
top priority and knew that there would be no recovery without a
robust small business economy. In the early days of the
pandemic, we created the Paycheck Protection Program and the
COVID EIDL program, providing small firms with the support
needed to maintain operations and protect jobs. A year later,
we passed the American Rescue Plan, which expanded upon these
programs and created new ones, like the Restaurant
Revitalization Fund. These policies help ensure that main
street will lead the way in our economic recovery.
Now, nearly 4 years after the pandemic struck, we are
seeing the fruits of this historic investment. GDP has returned
to its pre-pandemic trend, up 6.7 percent over the past 2
years. Unemployment is now the lowest it has been since 1969,
with over 12 million jobs created under the Biden-Harris
Administration and over 500,000 created this January alone.
Small business has been driving the robust labor market scene
over this past year. According to the Wall Street Journal,
while large businesses lost nearly 800,000 net jobs since April
2020, small businesses created a net 3.5 million. Most
importantly, more and more Americans are turning to
entrepreneurship. After 40 years of decline, small business
applications shot up, with over 10 million submitted over the
past 2 years. This trend is encouraging, and it signals the
determination and resilience of the American people in the face
of crisis.
This goes to show, when you prioritize building the economy
from the bottom up and the middle out, American entrepreneurs
respond with results.
However, the road to recovery has had its share of bumps,
to say the least. It is no secret that, despite encouraging
trends in recent months, the costs of running a business remain
high. The pandemic, alongside geopolitical conflicts, induced
enormous global economic challenges that have affected
businesses, large and small. Supply chain disruptions and
ongoing labor shortages have created headaches for business
owners across the country.
Additionally, surging energy prices due to the conflict in
Ukraine and the price-gouging by some of our nation's most
profitable businesses, helped push inflation to a 40-year high.
Early retirement during the pandemic and lack of immigration
over the past four years has also decreased the pool of skilled
workers from which small businesses can hire. Democrats tackled
this problem head on by lowering energy costs through the
Inflation Reduction Act and bolstering supply chains with
legislation like the CHIPS and Science Act. Additionally, the
Bipartisan Infrastructure Law made massive strides toward
making government contracting by small minority-owned firms
more attainable.
We have made great progress over the past 2 years, but our
job is far from over. I look forward to working with our
Members on both sides of the aisle to address the challenges
small firms face and ensure they remain the top priority of our
economy.
With that, Mr. Chairman, thank you for holding this
important hearing.
Chairman WILLIAMS. Thank you. Now, I will introduce our
witnesses.
It is my honor today to introduce Zan Prince to today's
hearing. Ms. Prince has had a long and distinguished career in
the Texas banking industry. Since 1990, Ms. Prince has worked
at First Bank Texas, a locally owned business that traces its
founding all the way back to 1880. For 33 years, Ms. Prince has
served the community in which she also calls home, eventually
ascending to her current role as Chairman of the Board in 2015.
In addition to her work at First Bank Texas, Ms. Prince has
been an integral part and active Member of her local community
through her involvement in numerous nonprofits, chambers of
commerce, and the Parker County Health Foundation. Her
extensive career and knowledge in local banking make Ms. Prince
a tremendously well-informed expert today about the issues
facing small businesses and main street communities today.
So, Ms. Prince, thank you for being here today and joining
the Committee, and I am looking forward to today's
conversation.
I now recognize my colleague, Congressman Luetkemeyer, for
1 minute to briefly introduce his constituent, who is appearing
before us today. Congressman.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
Our next witness is Drew Davis, a native of Hillsboro in
Missouri's Third District, Drew is here today as the owner of
Crippling Hot Sauce.
Drew is a unique witness for a couple of reasons, first
being that, as a small business owner, he is still actually in
high school. He is only 17 years old. Drew also has cerebral
palsy, a disability that inspired his brand's name and poses
various challenges for his day-to-day life. But Drew has never
let his circumstances keep him from pursuing his dreams. He set
his mind to starting a business, and Crippling Hot Sauce was
born with a sense of humor.
Crippling Hot Sauce is made from all local products, from
the vegetables to the labels, and Drew's business has continued
to grow, selling thousands of bottles from his website and
retailers across our State. Not only is Crippling Hot Sauce a
local Missouri-made business, but it is also a small business
with a cause. Five percent of the proceeds from every bottle
goes to cerebral palsy research.
I am very proud of this young and determined entrepreneur
that calls the Third District his home and even prouder to
introduce him to this Committee.
Thank you for making the trip, Drew, and thank his parents
for being here as well today and their support for their fine
son's entrepreneurial activity.
I also want to thank the rest of the witnesses for being
here as well.
And with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. Thank you, Mr. Luetkemeyer.
I now recognize my colleague, Congressman Meuser, for 1
minute to briefly introduce his constituent, who is appearing
before us today.
Mr. MEUSER. Thank you, Mr. Chairman.
r next witness is Mr. Roy Heim. Mr. Heim is the founder and
owner of Heim Construction Company, headquartered in
Orwigsburg, Pennsylvania, in the heart of my Congressional
District.
In 1990, Mr. Heim founded his initial business, Roy A. Heim
Construction, hiring just three employees, who still work with
Heim Construction today. After marrying his wife, Deborah, they
founded Heim Construction in 1994. Today, Heim Construction is
a full-service general contracting, design, build, and
construction management firm that builds commercial,
industrial, institutional, and residential facilities. Thanks
to their hard work, Heim Construction has gone from hiring just
a few employees to now serving as the livelihood of 65
dedicated and hardworking Pennsylvanians. Heim helps build
everything from dams and streetscapes to hospitals, surgery
centers, and dormitory for Penn State, and I have seen some of
the work. Heim Construction is also involved in road and
infrastructure projects throughout Pennsylvania. You could say
Mr. Heim's business has literally become a pillar of the
community.
Roy embodies the spirit of the American entrepreneur and
has spent over 30 years building his successful business in
spite of the many challenges small business feels along the
way.
With his diverse set of projects and decades of experience,
Mr. Heim notes firsthand how today's economic headwinds are
impacting small businesses like his across America and will
provide valuable insight into the current state of main street
America.
I want to thank Mr. Heim very much for making the trip here
and to all of our witnesses for testifying before this
Committee, and I look forward to today's conversation.
Appreciate it.
Chairman WILLIAMS. Thank you, Congressman.
Mr. MEUSER. I yield back.
Chairman WILLIAMS. Thank you. I will now recognize the
Ranking Member, Ms. Velazquez, for 1 minute to introduce the
last witness.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Our final witness today is Ms. Corrine Hendrickson. Ms.
Hendrickson has owned and operated Corrine's Little Explorers
Family Child Care Center in New Glarus, Wisconsin, since 2007
and has been a registered, certified mentor, trainer, and
consultant for early childhood educators and business owners
since 2018. She has served on the Wisconsin Early Childhood
Education Board from 2015 through 2021, including serving as
the Board's president in 2020. Additionally, she won the Terri
Lynne National Childcare Teacher Award in 2020 and the
Wisconsin Family Child Care Provider of the Year award in 2017.
She currently serves on the Main Street Alliance leadership
team and as secretary for the Green County Childcare Network
since 2012. She holds a degree in Elementary Education and is
currently pursuing a master in Infant and Early Childhood
Mental Health through UW Madison.
Thank you, Ms. Hendrickson, for joining us, and we look
forward to hearing your testimony.
Welcome.
Chairman WILLIAMS. Thank you, Ranking Member Velazquez.
And we appreciate all of you being here today, all of you
are winners, and thanks for taking time to be here with all of
us today.
So, before recognizing each witness for their testimony, I
would like to remind them that the oral testimony is restricted
to 5 minutes. If you see the light in front of you turn red,
that is a danger sign in front of you. It means your 5 minutes
have concluded, and you should wrap up your testimony. There
are no such restrictions on your written testimony, all of
which will be submitted for the record.
I would now like to recognize Ms. Prince for her 5 minute
opening remarks.
Ms. Prince.
STATEMENTS OF ZAN PRINCE, CHAIRMAN OF THE BOARD, FIRST BANK
TEXAS; DREW DAVIS, FOUNDER AND OWNER, CRIPPLING HOT SAUCE; ROY
HEIM, PRESIDENT, HEIM CONSTRUCTION COMPANY; CORRINE
HENDRICKSON, OWNER, CORRINE'S LITTLE EXPLORERS
STATEMENT OF ZAN PRINCE
Ms. PRINCE. Good morning, Chairman Williams, Ranking Member
Velazquez, and other Members of the Committee, thank you so
much for the opportunity to share our story with you today.
First Bank Texas is a family-owned community bank, the
fulfillment of the American dream of Joe Sharp, a man with a
strong foundation of hard work and an entrepreneurial spirit
from West Texas dry land cotton farmer roots. He was a product
of strong faith, family values, and a public education.
First Bank Texas mission statement is to achieve high
performance through our employees to partner with bank
customers and our community to make this a better place for our
families and businesses while demonstrating a kingdom purpose.
For us, that means we take God-given talents coupled with
American opportunities to make a difference.
Joe Sharp led our family and a group of investors to Baird,
Texas, in 1982 to acquire a very small community bank. That
bank has grown to a billion in assets, with 14 locations. Our
bank is a small business that has grown and prospered despite
ever-increasing regulation and requirements to be fair.
In 1982, bank documents were simple. Over time, we have
added layers of consumer protection that do little to protect
consumers. Fiscal and regulatory policy are important. The 2017
tax cuts, really all tax cuts, benefit both the bank and
customers.
But there are still threats on the horizon. The proposed
CFPB Rule 1071 to collect small business loan data to ensure
fair access to credit by all small business owners
misrepresents the lending market. There are no two small
businesses that are alike. If enacted, the process for lending
to small businesses will be bogged down in technicalities that
ignore creative entrepreneurial plans to establish or grow a
business.
Our organization is grounded in providing access to
products and services without regard to gender or ethnicity.
Please remember that every bank crisis has had adequate laws to
hold those accountable, yet every crisis brings more laws and
rules.
The 2008 response to the financial crisis is a textbook
example. It should have focused on the cause, big banks, but
instead imposed costly regulations on community banks.
We have been blessed to be able to serve our communities in
ways that would have never been considered in 1982. We have an
amazing family of employees that are not only committed to our
customers and communities, but committed to individual growth
through bank-sponsored education and training. Our bank has
weathered all kinds of financial conditions since 1880, and
through those trials, we worked with people to survive the
challenge. Some businesses talk about high touch--we live it.
Community banks provided 42 percent of the PPP loans that
gave direct stimulus to main street, and the bank was honored
to participate in that.
Community banks serve the financial needs of small
businesses who employ almost half of the American workers.
Small businesses and community banks are the backbone of the
community. They need reasonable regulations, fair tax code, and
access to credit to provide products and services to their
customers. We have all experienced ups and downs in the
economy. Today, many businesses struggle with the lack of
labor, increasing expenses, and supply chain issues.
I would like to introduce you to a couple of small
businesses in our community. The first is run by Sherry
Watters. She does hand-painted items on all sorts of things and
sends those not only to customers in Weatherford, but all over
the country. The second business was run by Debra Smith, who
recently retired after building and servicing pools in our area
for decades. She employed as many as 110 people, creating
opportunities for both the company and her employees. Both
ladies have built their businesses on hard work and
entrepreneurial spirit, integrity, and excellence that makes
our community great.
Community banks provide 77 percent of all agricultural
loans and over 50 percent of small business loans. We provide
community partnerships that help schools, charities, and all
the businesses that make our communities thrive. Without
community banks and small businesses, who fills the gap? Who
makes a difference in our community? Who provides that which is
unique to who we are today? I encourage you to focus on an
environment that creates opportunities for these small
businesses and community banks.
The United States is the best place in the world to live
and work. I, like you, are dedicated to preserving that which
makes America great.
Thank you for your service to our country and your time
today. I look forward to your questions.
Chairman WILLIAMS. Thank you, Ms. Prince.
Next, I would like to recognize Mr. Davis for his 5 minute
opening remarks.
STATEMENT OF DREW DAVIS
Mr. DAVIS. Thanks for having me today.
My name is Drew Davis. I own Crippling Hot Sauce. What
originally started as a school project quickly became more than
that. Crippling Hot Sauce was presented as a business project
in my business class in my junior year. I only got an 82
percent. So, like any straight A student would do, I went up
and asked the teacher at the time, why? That is why, when he
said, I thought it was a great idea, just a little unrealistic.
So, instead of getting mad that day, I went home. After 1,200
hours and $3,000 in my own money saved up between Christmas and
other occasions, I launched Crippling Hot Sauce.
I started Crippling Hot Sauce with a mission to help break
the stigma between people with disabilities and the able-bodied
community, and show people that we could do whatever we put our
mind to, same with all of you guys. So, after all of that, we
launched and fast-forward to today, 7 months later, we have
sold more than 16,000 bottles and now more than 96 retail
locations across Missouri.
That being said, many small businesses face challenges.
Because of my age and my situation, I have been forced to adapt
with many challenges, one of those being banks. Because of my
age, even though I had an LLC, it was most difficult to set up
a business account and what you need. I had to call every small
bank in my area just to find one that would set me up a
business account, even with a writer.
Another challenge was manufacturing. Because I only had
$3,000 to my name, finding one with a low enough order quantity
was difficult. I had to call about 15.
The third challenge was just networking, but I have been
fortunate enough to been introduced with a bunch of groups,
such as the Missouri Grocers Association and more.
The fourth challenge, of course, was inflation. Inflation
has affected the grocer industry significantly. For example, it
has forced my bottles up more than 25 percent since I started.
I have been fortunate enough to grow more, so I have just
offset that cost with higher order amounts. But for many small
business owners that are not as fortunate.
That being said, this opportunity has been really great for
me because learning and bringing myself out of this bubble. And
thanks for Google, thank you, because I wouldn't ever been here
without Google and being able to research what I did in such a
short amount of time.
And thanks for this opportunity, guys. I really appreciate
it.
Chairman WILLIAMS. Thank you.
Mr. DAVIS. They call me Sauce Boss.
Chairman WILLIAMS. We appreciate it. Thank you.
I now recognize Mr. Heim for his 5 minute opening remarks.
STATEMENT OF ROY HEIM
Mr. HEIM. Good morning, Chairman Williams, Ranking Member
Velazquez, and Members of the U.S. House Committee on Small
Business.
First of all, this is not my testimony, but I would like to
say congratulations, and great job. I was not a straight A
student, by the way, so you did good. You are better off than
me.
So, thank you for the invitation to testify this morning to
discuss the opportunities--or, excuse me--thank you for the
invitation to testify this morning and for the opportunity to
discuss the American entrepreneurship and how I started and
grew my business. I would also like to thank all of you on the
Committee, all of you Committee Members, for the hard work you
do on behalf of the small business owners like myself.
My name is Roy Heim. I am the president of Heim
Construction Company, headquartered in Orwigsburg,
Pennsylvania, a small rural town in Eastern PA. Also born and
raised there, I am an elected School Board Member and an
appointed Vo-Tech Board Member for the Blue Mountain High
School District in Schuylkill County, PA. I am also a Board
Member of several associations, including the Associated
Builders and Contractors, the Association of General
Contractors, and the Associated Pennsylvania Contractors, which
is heavy highway contractors.
I attended K through twelve and graduated Blue Mountain
High School. During high school, I was also a carpentry student
for four years at the Schuylkill Technology Center, a Vo-Tech
School that I am still involved with through the School Board.
I spent most of my senior year in high school in a co-op
program, where I have gained knowledge on many aspects of my
job in the construction industry.
After high school, I took a job working on infrastructure
projects in Pennsylvania. A few years before, I was given the
opportunity to move to Homer, Alaska, to work on the Bradley
Lake Hydraulic Project. The Project, which is still an active
energy producer, involved in boring a 3.5-mile tunnel with a
diameter of 24 feet and constructing a brand new 610-foot long,
125-foot high, concrete-faced and rock-filled gravity dam, all
at the bottom of a glacier. I spent approximately 2 years on
the project, gaining invaluable experience.
Upon returning home, I worked for a concrete contractor for
approximately 6 months before leaving to start up my own
business as a small general contractor in 1991.
Heim Construction started with two to three employees and
has been growing ever since. Today, Heim Construction is a
construction management, design builds, construction general
contractor, concrete service company that does millions of
dollars of public and private work, including many state,
federal, and federally assisted, funded projects. We have been
in business for 30 years and currently employ approximately 95
wonderful men and women.
Over many years that we have been in business, the number
of federal and state regulatory requirements surrounding the
construction industry has also grown significantly. We spend an
enormous amount of time and money to stay compliant, employing
15 full-time employees in our office who work countless hours
to ensure we remain in compliance with the forever-changing
regulations. Many of these laws and regulations, while well-
intended, make it much more difficult, if not impossible, for
small businesses to comply, complete, and survive, let alone
profit.
Another issue threatening a small business like mine is
tying of state and federal construction funding to special
interests. Today, the merit shop contractors, which would be
non-union labor forces employ more than 88 percent of all
professionalisms in the construction industry. For example,
when the federal government issues Executive Orders or passes
regulations mandating or prioritizing PLAs, which are project
labor agreements, it can tie the federal funds to use of union-
only labor and discriminates against nearly 88 percent of the
contractors whose workers have made a decision not to join a
union. This eliminates a fair and open competition among
contractors, harmful to the construction industry, its workers,
and ultimately taxpayers who pay more because of the limited
resources and competition. That 88 percent is the heart of
small business community in the construction industry that you
are here to protect and help and thrive.
I have a relationship with the unions. I hire them, they
hire me. We do jobs across the state together. There is no
reason to mandate union-only labor when we can compete and work
together with each other.
An additional issue facing a small business like mine is
the Build America, Buy America Acts. While we fully support the
intentions behind the Act to keep jobs and manufacturing in our
country, the recent modification and amendments and legal
decisions and the Executive Branch actions surrounding these
Acts have left even the federal officials confused on how to
get the projects completed and to ensure compliance. The law
fails to consider the limitations on supply chains' ability to
supply all the components needed to construct federal
construction projects. All of us have felt how fragile the
supply chain can be through COVID. The contractor's ability to
fully comply with these Acts will require transitioning from
global supply chain to a U.S.-based one that is not fully
capable of handling the demand. Congress and the Biden
Administration need to act immediately to add flexibility to
the form of exemptions.
And I know I am running out of time, Chairman, but I will
skip over.
So, while these are just some of the implications of each
regulatory obstacle, I have attached a non-exhaustive list of
federal and state regulatory requirements that impact
construction industry jobs created.
So, I want to thank you again for the opportunity to serve
as a witness, and I look forward to answering any of your
questions you may have.
Chairman WILLIAMS. Thank you.
Now, I recognize Ms. Hendrickson for 5 minutes.
STATEMENT OF CORRINE HENDRICKSON
Ms. HENDRICKSON. My name is Corrine Hendrickson, and I have
owned and operated Corrine's Little Explorers Family Child Care
in rural New Glarus, Wisconsin, for about 15 years. I have been
a Member of Main Street Alliance for 2. Thank you for inviting
me to speak to you today about my small business and not only
my American Dream, but the ability of those I work with to
achieve theirs.
The only reason I can be here today is because I was able
to hire a couple of substitutes last year utilizing federal
rescue fund dollars, thereby increasing the wage I could offer
by $3 an hour and a monthly bonus of $250. This allows me to go
to appointments, take classes, and appear before you today
without closing my business, subsequently allowing parents to
work. However, my one substitute finished her Master's in
Social work, and my second one has been offered a full time
manufacturing job that pays substantially more than I can, with
benefits. So she gave her notice. I cannot compete.
I began my American dream wanting to become a teacher.
After I graduated with a teaching license into a 2001 recession
job market, I substitute taught and worked in retail so my
fiance and I could buy a home. It was possible then because we
had one very minimal student loan to pay off with 3 percent
interest that went down if you paid on time, and homes were far
more affordable compared to starting career wages. Compare that
to today, when large corporations and investors have driven
prices up exponentially, increasing our home value this year by
about 15 percent or $50,000.
In summer 2007, when our son was 6 months old, some friends
and I were together for our usual Monday evening dinner while
our volunteer firefighter husbands were at meetings. And the
three of them were very pregnant and unable to find care only
wait lists. I was now the head store manager and offered to
quit and start a family childcare business.
Because of the parents' lack of access to paid family
medical leave, I opened my business only 6 weeks after the
first two were born and 2 days after leaving my retail job. Had
we been renting, my dream most likely would have ended before
it started. Due to liability reasons, most landlords don't
allow family childcare in their rental. Liability insurance is
expensive and becoming more difficult for licensed group and
family childcare businesses. Over the last 2 years, prices have
risen drastically or non-renewal notices are being sent instead
of bills.
Furthermore, childcare as a business plan has a notoriously
low profit margin, so purchasing a home would have been
impossible without any access to capital. On average, parents
pay more than college tuition for one infant or toddler
enrolled in care. Moreover, for 2 or more children, it is more
than their mortgage or rent because fixed costs for food,
liability insurance, rent, utilities, toys and books that need
to be replaced, continuing education, licensing costs, et
cetera, are extremely high for childcare businesses. This
leaves little left for profit or wages. Many of those fixed
costs are increasing due to the lack of enforcement of our
price gouging and anti-monopoly laws enabling corporate
concentration by pushing out competition, lowering quality,
while raising the prices.
Early care and education businesses are the corner for all
other small businesses as key to workforce development and the
economy both today and in the future by caring for and
educating young children while parents work, continue their
education, and pursue their American dreams.
Secondly, my business product is children. We create
tomorrow's workforce and future business owners. The first 5
years of a child's life are when 90 percent of brain
development happens, laying the foundational skills of self
esteem, self awareness, self control, critical thinking,
creativity, collaboration and curiosity by curating, play based
environments that are child centered and teacher supported--all
skills that my fellow small business owners state they need in
our workforce and are lacking. This is detrimental to the
future ingenuity and competitiveness necessary to pursue the
American dream.
By investing in childcare, our rural economy's decline can
be reversed drastically and replace the 90,000 family childcare
businesses lost between 2010 and 2019. Since COVID, investments
to all small businesses and to parents in the form of increased
tax credits and deductions increase the affordability of having
children. Without the PPP, I probably wouldn't still be in
business. Increased investment in childcare due to COVID has
increased wages and viability for childcare businesses.
Significantly raising wages without also raising tuition has
been possible.
Empty classrooms are reopening since our employees are
staying and coming into the field. However, once the federal
ARPA funding runs out, if the state and federal government
refuses to continue investing, I will be raising my rates 25
percent a week per child. This means parents will have to
either receive significant pay raises from their employers,
remove their child from regulated care, or be unable to find
work. If tuition gets too high, more childcare businesses will
close due to lack of enrollment. Additionally, we are still
down about 80,000 employees, leaving exponentially more parents
unable to work since their child is on wait list instead of in
care.
Nationally, the lack of infant and toddler childcare costs
our economy at least 122,000,000,000 annually.
In conclusion, from the perspective of small businesses,
our government is choosing to focus on big business and
corporations ignoring the dire needs of small businesses around
the country, eliminating the opportunity to truly live up to
the American dream.
Thank you.
Chairman WILLIAMS. Thank you.
And I would just like to tell our witnesses, you see people
moving forward and backwards. There is a lot of voting going
on, different committees, so you are going to see people coming
and going.
So let me start out by saying the banking industry is
critical to the health of main street America. Whether it is
getting a loan, starting capital, developing a revolving line
of credit to keep up with expenses, everyone needs a good
relationship with a banker. We saw firsthand how important it
was at the beginning of the COVID-19 pandemic, where businesses
with existing relationships had a much easier time getting
their PPP loans than their counterparts that had not made that
connection.
And as we have heard today, inflation is impacting many
businesses across our country. This has caused the Federal
Reserve to raise interest rates at a pace we haven't seen since
the 1980s.
So my question, Ms. Prince, as a community banker, can you
talk about what you are seeing on the ground as it relates to
the increasing interest rates and the effect they are having on
the businesses you serve?
Ms. PRINCE. Absolutely. Thanks for asking.
Many businesses today that were very profitable, very
viable in the lower interest rate environment are finding
themselves with an interest expense that is probably
unsustainable. And with the focus on additional increases, that
puts people that were on the bubble not really able to get a
loan and to service that loan. So interest rates have had a
huge negative process in our community.
We do lots of construction loans, we do lots of real estate
loans, and those have slowed down substantially with the
increase in cost. Most of those people that are buying a first
mortgage today don't remember the 80s, but an 8 percent, a 7
percent, a 6 percent mortgage is just insurmountable for them.
So interest rates are huge.
Chairman WILLIAMS. Thank you.
Mr. Davis, your passion and drive to be successful should
be an inspiration for all Americans. And too many people see an
obstacle as too big and simply give up without even trying. And
you were brave enough to put yourself in the game rather than
just sit on the sidelines. And before your 18th birthday, you
have already overcome many unique challenges that many seasoned
business owners have never previously had to navigate through
until the last few years. So I hope you keep working with this
so one day you will have too many employees working for you at
the hot sauce company to come before the Small Business
Committee.
Now, there is something I heard that really impressed me in
listening to your story. When you are a business owner and you
make a profit, you do not just sit on that money. You hire an
additional worker, you invest in new equipment, you think of
ways you can give back to the community. And so for some
people, giving back is an afterthought once they have already
built a successful business, but for others, it is ingrained
into the DNA from the start.
So question is, can you share with the Committee how you
give back to the cerebral palsy community through your
business?
Mr. DAVIS. Yes. Five percent of our profits go to the
National Cerebral Palsy Research Foundation. And this is
important because not only will this research go towards ways
to make people better live with cerebral palsy, but since
cerebral palsy is a brain--it is basically a fancy word for
brain damage, the research could also further affect the people
that also have paresthesis and like are paralyzed and not just
the 764,000 people a year that struggle with cerebral palsy.
Through stem cell transplants, as well as other things, I
believe as we further increase profit, that could substantially
help our contributions, which could further speed up the rate
in which we are able to give, which will maybe eventually help
more people into the workforce, which will generate even more
revenue for us, which will help the wonderful economy that the
United States has.
Chairman WILLIAMS. Thank you.
In the brief time the time that I have. Mr. Heim, your
industry has been one of the most impacted by supply chain
disruptions. So can you talk briefly about how the pandemic
shifted your view and where you sourced materials? And do
American businesses currently have the capacity to meet your
needs?
Mr. HEIM. So sure. Thank you.
So I could just tell you about the last project we just
had. It was a 3 year project. We bid the project before the
COVID and COVID came into play. We waited approximately a year
and a half to 2 years just to get air conditioners. There is
still today--if you want to buy an electrical panel, you are
going to wait a year to just find an electrical panel. So today
it is very, very difficult for us to plan to try to understand
how to price. So----
Chairman WILLIAMS. My time is up now. Thank you for that.
With that, I yield back.
And now I recognize the Ranking Member of New York for 5
minutes for questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Ms. Hendrickson, many small businesses like yours are
facing increased costs during this period of high inflation.
One potential source of this inflation is the continued
concentration of market power over the past several decades.
How has the concentration in certain industries affected the
price you pay for basic supplies for your business?
Ms. HENDRICKSON. Thank you.
So for me, as a family child care provider, I am not able
to buy things at scale or go through larger corporations and
things like that to purchase. So I have to go to the store to
get things myself or purchase online.
A few years ago, Office Max and Office Depot were allowed
to merge. Since then, my prices for paper, ink, et cetera, have
gone up exponentially and have not come back down along with
the quality. My paper frequently jams. I have gone through
several printers and things like that, and it is very
frustrating because when I purchase something I want it to be
higher quality. And with that corporate concentration, it gets
rid of competition and takes away that ability for people like
that.
Same thing with companies like Amazon that have taken over.
You now auto reorder. I don't have a lot of time, but I have
noticed those prices have actually gone up more than if I were
to purchase from the original proprietors and.
Ms. VELAZQUEZ. Funds from the American Rescue Plan and
reimbursement from the USDA gave you some much needed breathing
room with respect to hiring staff and higher wages. Can you
speak more about the importance of maintaining those funds in
fixing our country's broken childcare model?
Ms. HENDRICKSON. Yes.
So because childcare has such a low profit margin, we are
only able to charge what parents can pay, unfortunately, which
isn't a whole lot when you are looking at people at the
beginning of their careers. And so we look at the average
market rate really isn't comparative to what it actually costs
to have a childcare business. So we actually are able to use
government supports. Finally, the first time in my entire
career, I have had money that I knew was coming in every single
month, and I was able to take that money and pay my operational
costs, raise my own wage, and also hire people, which has been
a breath of fresh air for all of those families as well.
Ms. VELAZQUEZ. Thank you.
Ms. HENDRICKSON. The USDA food program has increased to one
tier, and if we were to make that permanent through the USDA
Farm Bill, that would help offset cost to parents about $15 a
week. Group centers, unfortunately, aren't always eligible, and
so getting them into that as eligible, no matter what, would
also help offset those costs for those centers so they would be
able to pass those savings on to families or increase the wages
so they can recruit and retain highly qualified staff.
Ms. VELAZQUEZ. Thank you.
Mr. Heim, it is well known that the construction industry
has been having difficulties in finding skilled workers. Has
that been your experience?
Mr. HEIM. Yes, very much so. So, right now, our industry
nationwide is short about 460,000 people. We are all fighting
for people left and right. I have got on the school board and
now work with the technical school board. In our county alone,
we have 197 children on a waiting list to try to get into the
technical school, which only compounds our problems that we
can't grow and we can't get better.
Ms. VELAZQUEZ. Do you think that common sense bipartisan
immigration reform could increase your ability to meet the
current demands for work that you are taking on?
Mr. HEIM. I do.
Ms. VELAZQUEZ. Okay. Thank you.
Mr. Davis, thank you so much for being here. It is an
incredible story of resilience.
Can you talk to us about how this work has helped you to
gain more self confidence to hire other people and then to give
back to our community and your community?
Mr. DAVIS. Yes. So through COVID, I really got reserved and
stopped talking to people. But when I started Crippling Hot
Sauce, it kind of helped me break out of my funk and go out
there and talk to people. And has increased my social skills a
lot. And I have also learned a lot through it, through having
to talk to people and, you know, kind of screwing up on
business pitches. And I just take everything as a learning
experience and say I will get them next time. And if that ever
happens, you know, at least I tried. But I have consistently
gotten better through the last 7 months, and I am just happy to
kind of be that representation in the disabled community,
because not many people have that.
Ms. VELAZQUEZ. Mr. Chairman, I yield back.
Chairman WILLIAMS. Thank you very much. Thank you very
much.
The gentleman from Missouri, Mr. Luetkemeyer, is recognized
for 5 minutes.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
Mr. Davis, thank you so much for your testimony today, and
you are an inspiration to all of us. You know, if I was the
teacher who gave you 82 percent on your business plan, I think
I would have a problem. So did you go back to the teacher and
say, hey, you know, look what we are doing now, and see if he
would reconsider your grade? Or was it too late?
Mr. DAVIS. I mean, they didn't renew his contract for the
next year. I think says something.
Mr. LUETKEMEYER. I think it does too.
Mr. DAVIS. I actually was told that he ended up buying it,
which I thought was kind of funny. And he is like, it is really
good. And I am like----
Mr. LUETKEMEYER. Very good. Well, again, you are an
inspiration to all of us.
You know, everybody has an impetus for starting a business,
and yours was to show that you had a good plan. If you just put
your hard work behind it, look what can happen. And I think
that all of you here this morning have got that same story.
Mr. Heim, your testimony on all the different community
projects and community things that you are involved in is a
testament, I think, to small businesses. Our communities don't
grow unless our small businesses are there and our small
businesses don't grow unless our community is there. And by
participating in the community, you make sure the community
grows so that your business can grow. It is a symbiotic
relationship there that has to be there, otherwise, neither one
happens. And so you are a perfect example of that. So thank you
for your community involvement. Yeah.
Mr. HEIM. May I comment to that?
Mr. LUETKEMEYER. Sure.
Mr. HEIM. So, I didn't list all the stuff I do. I am a
Little League coach and basketball coach and so on. But the one
thing that we do miss is we need leadership with our youth
today. And being in this business, hearing me create, being
around other business leaders, help me get that leadership that
then you can transfer to your community and to the children, I
think that is very important.
Mr. LUETKEMEYER. Very well said. Very well said. Mr. Davis,
I would like to ask you a couple of questions about your
business, your business model. You talked about inflation
affecting it. I know in your written testimony you say you
absorb the price of some of the--or some of the cost of some of
the fluctuations. Do you continue to absorb all of it? Do you
pass some of it on? How are you looking at your business model?
Mr. DAVIS. So considering we are on the premium hot sauce
spectrum, I have just been ordering more to further offset
those costs because with hot sauce, there is a very large
fluctuation on what it can cost. And our goal for the next
couple of years is get as many people to try it as they can.
And since many people are struggling with inflation, we just
want to keep prices down as low as possible to get people to
try and contribute to the cause, no matter the profit margin. I
know I haven't taken anything as far as I wasn't around with
the PPP or anything like that. It has all been my own money,
which has helped because I don't have interest rates following
me.
But I think to add to that, to further help representation
in the disabled community, getting more grants and tax
subsidies towards underprivileged people, I think would
substantially help the economy because the disabled community
is a large part and not many people have access because of cost
that it costs to have a disability.
Mr. LUETKEMEYER. Appreciate that. I think that is extremely
important. One of the things you talk about in your testimony
here is that permitting and licensing process that you had to
go through. Everybody, all small businesses here this morning
going to talk about government rules and regulations. Can you
give us a little idea of the cost? Do you have an idea of what
the cost is or percentage of cost that is in your pricing of
your product for rules and regulations just off the top of your
head?
Mr. DAVIS. Not exactly, but I would estimate it is between
10 percent, because a lot of that is through my manufacturer
and I know a lot of those things are per county. So there is
not, like, a thing that is like you get this for the State of
Missouri and you are good for all counties. Each county has
their own health department. And that really makes it confusing
because you have to have this for this county and that for this
county. And I think if we kind of fast-line the application
process and the licensing process, more people would get into
the grocer industry, which would make it to where there would
be more competition for the big corporations.
Mr. LUETKEMEYER. I am running out of time. I got one more
really important question here. In Missouri, they allow you to
have a personalized license plate. Does your personalized
license plate read Sauce Boss?
Mr. DAVIS. That is a good idea, though.
Mr. LUETKEMEYER. Thank you for your testimony.
Mr. BEAN. [Presiding] Thank you very much. The gentleman
from Minnesota, Mr. Phillips, you are recognized for 5 minutes.
Mr. PHILLIPS. Thank you, Mr. Chairman, and greetings. I
think the world of all of you. I am a business person myself. I
know how tough it is to run a successful business during the
best of times and how tough, tough, tough it is during the
worst of times, which, of course, the past 3 years have been.
And also, I love the mosaic here because it is this great
ecosystem of business. Now you have a lender, a builder, a
product maker, and a service provider. And I want to thank you
for being part of this extraordinary ecosystem.
I do a series at home called ``On the Job with Dean,''
where I visit small businesses every week I am back home, and I
do a 2- or 3-hour shift. I don't get paid, which means I am
being paid what I am worth. And it is probably the most fun and
illuminating part of this entire service.
So my question to each of you is, if you had your Member of
Congress join you at your business for just a day, for an
afternoon, what specifically would you like them to take back
to this Committee about their experience?
Ms. Prince, maybe you can start.
Ms. PRINCE. Sure. Thank you. I think I would invite
Chairman Williams to our loan committee so that he understood
what it takes for the small business to put together a package
and present it to a bank and to go through the entire process.
So, it is not very simple. It used to be, it is not anymore.
But I think it would be eye-opening to see the amount of
information that they have to provide, that the bank has to
require in order to make a sound credit decision going forward.
Mr. PHILLIPS. I appreciate it. Thank you. Mr. Heim?
Mr. HEIM. So, I think I would ask Mr. Meuser to spend the
afternoon and then quite a few evenings going to municipal
meetings, dealing with EPA and DEP and trying to get a permit
approved that could take us up to a year to get done. So, that
process is something that, unless you do it, you really don't
understand it.
Mr. PHILLIPS. Yeah, permitting reform.
Mr. HEIM. Correct.
Mr. PHILLIPS. Yeah, thank you. Mr. Davis?
Mr. DAVIS. I mean, my industry is kind of unique because I
could basically take any of you guys and show you how
complicated some of the paperwork and stuff has to be. And I
think each of you would have the same kind of mindset going out
of it that it is really hard and both on the state and federal
level. Things can be done for any state because, like I said,
there is 50 states and each of them have their own rules and
regulations.
Mr. PHILLIPS. Yeah. Thank you. Ms. Hendrickson?
Ms. HENDRICKSON. I would invite you to start your day with
me at 6:30 in the morning, cleaning and prepping for all of the
children to show up, and then having those few conversations
with parents about what their night was, what I can expect that
day, and then enjoy spending time with the children, but then
also seeing how many different things I am doing at one time,
between diapering and feeding and, you know, navigating between
the children that are playing really well, but then somebody
wants to come in and hasn't quite learned yet how to ask to
play and how important that is. Because even we notice that the
adults sometimes don't know how to ask to play nicely either.
And I think that would be something that would be great to take
back with.
And then, also, then getting them all down--like getting
lunch ready, getting them fed, getting them down for naps.
While they are napping, I do my paperwork and my meetings. And
you could learn how to do the USDA food program and all those
other things that I have to try and keep track of, enter my
receipts and all the things I have to do as my own accountant
because I don't have--there aren't enough accountants out there
that actually understand the implications of family childcare
and all of the different various tax write-offs that we have
that we should be getting. And that leaves a lot of money on
the table.
And then the children start to wake up. And so then we do
bathroom and diapering and everything, and then we go outside
and play. We have done that a few times by now. And then the
parents come and pick up. I let them know how their day was.
The children leave.
I now have to do laundry, dishes, do all kinds of other
things, paperwork. My own children that are 16 and 14 deal with
their things. And then sometimes I am still on meetings and
classes and running meetings, mentoring until about 7, 8:00 at
night, and then you could go home.
Mr. PHILLIPS. Wow. By the way, I have to say, I think my
colleagues can relate to adults that don't play nicely together
sometimes.
With my brief time left, you know, during the pandemic we
passed some legislation to help small businesses. It was
imperfect. There was some fraud, of course. But just quickly,
if I might just add, I know, Mr. Davis, you indicated you
didn't secure a PPP loan because you started your business. Ms.
Hendrickson, did you----
Ms. HENDRICKSON. Yes.
Mr. PHILLIPS.--see any support?
Ms. HENDRICKSON. Yes, I did, actually. I was able to
through my small community bank. They reached out and worked
with me very, very much. And I actually then helped other
people who are unable to access the PPP through their larger
banks because they were not prioritizing them, get that PPP
through my bank.
Mr. PHILLIPS. Terrific.
Ms. HENDRICKSON. So, it was fantastic.
Mr. PHILLIPS. Nr. Heim?
Mr. HEIM. Yes, we did. So, because we do medical work in
the State of Pennsylvania, we were allowed to continue working,
so it did keep us working.
Mr. PHILLIPS. A PPP loan or?
Mr. HEIM. A PPP, right.
Mr. PHILLIPS. Terrific.
Mr. HEIM. And then what we did is there was a few crews
that worked for the Department of DOT, and they could not work,
so we kept them employed and we actually did community work. We
did a ballfield. We went and we did a ballfield over for the
local town, but we did everything we could to keep them working
and make sure they were employed.
Mr. PHILLIPS. Terrific. And my time has expired, but Ms.
Prince, I was going to ask you about how we could have done
that better as someone who clearly----
Mr. BEAN. And, Ms. Prince, let us come back. In fact, I
will pick you up with that question when it comes to my turn--
--
Mr. PHILLIPS. Perfect.
Mr. BEAN.--so stay right there.
Mr. PHILLIPS. Thank you all very much.
Mr. BEAN. Well done.
Mr. PHILLIPS. I yield back.
Mr. BEAN. Mr. Phillips, thank you very much. Let us go to
the gentleman from Pennsylvania, Mr. Meuser, who is recognized
for 5 minutes.
Mr. MEUSER. Thank you very much, Mr. Chairman. Thank you
very much to our witnesses, to my friend Roy Heim, for making
the trip again, and to all of you.
So, yeah, I spent most of my adult life in small business
and growing into, fortunately, a larger business. And all my
customer base for small businesses certainly know the trials
and tribulations that many of you are expressing and all that
you do give along with employing 95 percent, in my district
anyway, or make up 95 percent of the businesses, employ almost
75 percent of those who are employed. In my district over
100,000 people work for small businesses. And yet small
businesses tend to be under the gun from energy costs that have
risen. And many small businesses work with the energy industry,
which hasn't been--particularly natural gas in Northern
Pennsylvania, which hasn't been--which has been kind of under
fire as well, the inflation, the regulations, the interest
rates, the access to capital, the supply chain issues, the
workforce. So we know the issues that you have, this committee
is about trying to find solutions.
So, Mr. Heim, I am going to start with you, if you wouldn't
mind. Well, first of all, what you brought up about all the
giving that small businesses do, that is just so very
important, how main street does pay for the Little Leagues and
are usually the most charitable and involved in communities. So
that should always be noted, that level of continued value-add
or additional value-add. But in your testimony, you submitted
an exhaustive list, or a nonexhaustive list, nearly 50 pages
long with details of regulations that your construction
business contends with.
Now, how long was that list 30 years ago when you began
your business? Was it the same? Was it a lot shorter?
Mr. HEIM. Due to a lot of ignorance and not really
understanding, I couldn't tell you how long ago that--how big
that list was. But, yes, in all honesty, in the last 10 years,
that list has grown quite a bit and became more stringent. So,
there might have been policies in place, but they have gotten
tighter and tighter over the last 10 years.
Mr. MEUSER. If you were trying to start a business to yours
similar today as you did 30 years ago, would it be possible?
How much more difficult would it be today for a small business
to start like yours, because that is the business you know
best, versus when you started 30 years ago?
Mr. HEIM. So, to start the business, probably not that
hard. To be compliant and do it correctly and grow, very
difficult. Very difficult.
Mr. MEUSER. Very difficult.
Mr. HEIM. Because I can tell you, unless you have an
attorney, an accountant, and everything, and spending that 50-
to $100,000 right up front to understand all the rules and
regulations that you must abide by?
Mr. MEUSER. Twice as difficult? Three times more? How much
more difficult today than 30 years ago?
Mr. HEIM. I would say three times more.
Mr. MEUSER. Okay. And that is due to, not taxes, it is due
to bureaucracy and regulations.
Mr. HEIM. Correct.
Mr. MEUSER. Added regulations.
Mr. HEIM. Correct.
Mr. MEUSER. Okay. So what about inflation, the costs that
you have been contending with? If you were doing a project 3
years ago that cost $5 million, what would that project cost
just 3 years later?
Mr. HEIM. So, today, and I can only tell you this to try to
make things simple, if you did a typical office facility today
that 2 years ago might have been $125 a square foot, today you
are looking at $250 a square foot.
Mr. MEUSER. So, perhaps double?
Mr. HEIM. Of course.
Mr. MEUSER. Double in a 3-year period.
Mr. HEIM. A lot of it, you know, it is labor, it is
material, it is, quite frankly, not being able to understand if
you can get the material and people are charging more.
Mr. MEUSER. And, you know, like you, I respect unions. I
respect all workers. I respect all Americans, for that matter.
And you can understand the joining a union doesn't label
anybody anything other than they are part of a union. We
support unions.
But when you are expressing it related to PLAs, should the
requirement be to have an opportunity to bid for a contract, be
that you are a union, that you only employ unions? That
certainly limits the competition, but also excludes you and 88
percent of the workforce, as you stated.
Mr. HEIM. Right. I don't believe the government should put
any impediments in front of anyone to able to procure work. So,
we do Penn DOT work. They want to put a PLA or the federal
government wants to put it. We are all prequalified. We are all
bonded. We all do the work. I work with unions every day. I get
hired by unions. I hire union contractors so we can be fair and
we can work together. And I have a great relationship with
them, but there is no need to single people out.
Mr. MEUSER. Thank you for your testimony. I yield back,
Chairman.
Mr. BEAN. Thank you very much. Let us go to Kentucky where
Mr. McGarvey is standing by. He is recognized for 5 minutes.
Mr. MCGARVEY. Thank you. It is great to see everyone. I
echo the comments of Mr. Phillips. It is great to see so many
people in so many different capacities and to hear your all
stories echo so much of what we saw. I was in the state
legislature in Kentucky when the pandemic started, and so I was
on the ground. And from the people who received PPP loans or
from all the community bankers in Kentucky, we heard, who were
sleeping in their offices to make sure that business had access
to capital, to the people who were trying to build things and
keep things going, to the number of Americans who started new
business as a way to deal with some of the pressures of the
pandemic. It is really great to see all of you here and to hear
your stories.
To make this, if I ask my questions, you know, one of the
things I did yesterday before coming to Washington was drop my
4-year-old off at her childcare facility. And as the parents,
working parents of three young kids, I know how vital
affordable and accessible childcare is for every young family
in this country.
Unfortunately, like a lot of places in the United States,
Kentucky is facing a childcare crisis. And we have a Kentucky
Center for Economic Policy that says that over half of the
Commonwealth of Kentucky is a childcare desert right now. That
means little or no child care is available. Almost half of the
childcare centers have closed their doors over the last decade.
And when parents are able to find child care, I know this
firsthand, it can cost almost as much as a year of tuition at
the University of Louisville.
This is something we have got to get right. In my state,
over 100,000 women alone have left the workforce and not
returned to the workforce because of what we are facing in
child care.
So, my question is for Ms. Hendrickson. You know, we hear a
lot from small business owners about that there aren't enough
qualified workers, that there is a lot of pressures. How can
continued investment in child care and childcare centers by the
federal government help with providing child care with
childcare providers and also help with the labor force as a
whole?
Ms. HENDRICKSON. Well, we are the workforce behind the
workforce. Without us, people can't work. And without us, the
children will not be ready to work. Because, again, that brain
development starts at birth, not when they are five or four or
three or whatever magical age school officially starts. And we
can also meet the diverse needs of our community with the hours
that are needed. So, people who work late at night or second
shift or third shift or weekends, our small businesses are
there for them to help meet those needs.
However, because of the fact that we can only charge so
much, we cannot pay that in wages because that is the piece
that is missing is that wage piece. Our military currently does
fund childcare that way. The rest of the OECD countries fund
childcare at .76 percent of GDP. The United States is second
from the bottom, only above Croatia at .35. If we even get that
up to the average, it would be enough to get childcare off of
the ground. Subsidized, we would have high-quality educators
who can stay in the field. Right now, three out of four people
with a degree in education, early childcare education do not
work in the field. We are highly sought out by other people
because they know we have people skills. They know that we are
educated. They know that we have patience and that we have a
lot of passion. So by funding those core pieces of that wage so
that we can get the wage rates up from about $12 an hour to a
sustainable living wage even, let alone can measure it with our
other very valuable small business owners and employees that
normally are making at least 18-, 20-, $25 an hour with health
care, with paid family medical leave, and with retirement. We
can't even offer any of those things.
My retirement right now is about $3,000 besides what I have
with my husband. And that is because he has a great job. And
so, you know, right there, that investment would make the world
of the difference for us and our people and all of the other
small businesses that rely on us and employers that rely on us
in order to have a workforce.
Mr. MCGARVEY. I really appreciate that you even answered
some of my other questions in that really good response. But I
love how you said the workforce behind the workforce, which is
so important. I think it shows why continued investment and
making sure we have quality, affordable childcare is important
to every small business in this country.
Mr. Davis, I do want to ask you a question. I am a MSSU
alum. I married a Jeff City girl. So, it is great to see you
here. It is great to see your success story.
I also want to point out I got on your website while we
have been sitting here, your sense of humor doesn't stop at the
name of your business. The sauces themselves, Just For the
Parking--Mild Crippling Hot Sauce, Limping Medium, and then
Crippling Agony. It is great to hear your success story.
And as we see individuals with different abilities that are
less likely than their peers to participate in the workforce,
as you noted, they face greater barriers to starting their own
businesses. How can the federal government do a better job of
helping job creators who do have different abilities?
Mr. DAVIS. Yeah, it is just grants and tax credits and
things of that nature because we don't have as great as an
opportunity, a lot of us, to get in the workforce, because as
much as it has gotten better, there still is a lot of workplace
discrimination against people with disabilities and other
underprivileged individuals. And I think that people with
disabilities statistically make less than even women do on
average. That is not necessarily right because a lot of us,
like I said, do have the same intellectual capabilities. And it
is just going back to thinking how they did in the early 1900s
where disabled people were only in the life skills classes and
stuff like that. But it has gotten way better, and I am just
here to help push the envelope even further and show everybody
what can be done in such a situation.
Mr. MCGARVEY. Thank you. And I am out of time, but thank
you all.
Mr. BEAN. Thank you very much, Mr. McGarvey. Let us go to
Texas, where Mr. Ellzey is recognized for 5 minutes.
Mr. ELLZEY. Thank you, Mr. Chairman. Thank you all for
being here today.
And I am going to echo Mr. McGarvey on the sense of humor,
Drew, that you have. And I can only imagine how many times you
have gone up to a place that has some parking and you might see
somebody get out that has got the placard. And I think that
that is a nice shot across the bow, that Just For the Parking
Hot Sauce clearly is from experience.
To your parents, would you raise your hands, please? You
have got to be exceptionally proud of this young man who
doesn't sound like he is 17. He sounds like he is 37, 47. The
wisdom in this young man is vastly beyond his years. You have
to be exceptionally proud, and I guarantee you that that is the
first young man in his class who is going to be a
multimillionaire.
And my hope is, is that at the age of 25, you sold out to
somebody much, much bigger for a billion dollars, and you and
your parents can go do whatever the heck you want or start
another multibillion-dollar company. So thank you for your
stubbornness, for your sense of humor, for the points that you
have made here today.
As you have been talking, I have watched everybody else
around here nod their heads. So you not only speak for your
family, for yourself, for your company, but you speak for many
other people throughout this country. And I see a much bigger,
brighter spotlight for you in the near future, but you got to
get out of high school first. I am sure that is probably part
of the priority. So, thank you for building this business and
thank you for coming to us today.
Ms. Prince, as a fellow Texan, I would just like to ask
you, and it may have been briefly brought up today, as we know,
the CFPB, the funding structure for the CFPB is before the
Supreme Court right now. And it is going to be interesting to
see what happens, if that is struck down, their funding
structure, which, of course, comes from the Federal Reserve
instead of the appropriations process of the United States
Congress, which means there is really no mechanism for
constitutionally the Congress to regulate what the CFPB does.
So, I am curious to see what happens with rule 1071. Of course,
that won't come out until, I think, September of next year. But
how much more time is your company having to spend on meeting
the restrictions or the requirements of 1071 and who does 1071
help?
Ms. PRINCE. So, 1071 hasn't been enacted yet, so we are not
currently collecting the information. But if enacted, we would
be collecting information as though you were doing a real
estate, a home mortgage. We would do all the demographics, the
income, all the different pieces on every small business loan
as though a small business loan can be put in a box and that
all are alike, which just isn't true.
So, if you look at the people here, the demographics, the
needs, the supply chain needs, all the labor needs, all of
those things go into what make a small business unique. And so,
going forward, we would hope that there is no inaction of
CFPB's 1071 rule, which really just creates a whole other layer
of regulation and reporting, such as HMDA for real estate
mortgages.
Mr. ELLZEY. Does it help anybody get a loan?
Ms. PRINCE. It doesn't help anybody get a loan.
Mr. ELLZEY. Okay.
Ms. PRINCE. It may, in fact, hinder people from credit
access because if you are just looking at a statistical
representation of the small business, you are not looking at
their business plan, you are not looking at their creativity,
you are not looking at their passion, you are not looking at a
young man who decided that he would go to multiple small banks,
to multiple manufacturers, to multiple sources before he got
what he wanted and before someone recognized that that young
man had a vision, he had a business plan, and he had something
that would work.
So it is really important that we leave some of the
business decision-making in the hands of loan committees and
the business access, loan access to really people who have an
entrepreneurial spirit and are creative in their plans.
Mr. ELLZEY. Thank you, ma'am. I appreciate what community
banks do. I started out with a big national bank, and I love
that a community bank set up people I know, people who I can
contact. And thank you for your service in providing for our
country's finances.
Ms. PRINCE. Thank you.
Mr. ELLZEY. Real quick, Mr. Heim, thank you for building
America. I don't have any questions for you, but I know this is
a tough business to be in right now.
And finally, Ms. Hendrickson, thank you for being here and
thank you for taking care of the children while the rest of
America works. I know it is a struggle from time to time, and I
hope things turn around very quickly for you and would like to
see how we can help. So, thank you all very much.
I yield back my time, Mr. Chairman.
Mr. BEAN. Thank you. Thank you very much, Mr. Ellzey. We
are in the city of Washington, but now we are going to the
State of Washington, where Ms. Gluesenkamp Perez is standing by
and she is recognized for 5 minutes.
Ms. GLUESENKAMP. Thank you, Mr. Chair. And thank you so
much to all of our witnesses for being here.
Mr. Heim, in your testimony you mentioned your involvement
in trying to get high schoolers in the trades and your early
involvement in high school. You know, and I know I am part of
the generation where all of our best trade schools got turned
into--or trade programs got turned into computer programming
classes instead of the auto shop. I work and own an auto repair
shop myself, work in the trades. And our kids are being told
directly and indirectly that basically you did something wrong
if you ended up working with your hands for a career. And
right, we are seeing the consequences of that. We are short,
what, 350,000 workers in the construction trades alone.
And so my question to you is, what do we do to restore the
prestige and sort of the dignity back to working in the trades
in your perspective?
Mr. HEIM. So, that is great because you are right on
target. Six years ago, I worked with a state rep by the name of
Michael Tobash, myself and a few other people, and we started--
in Pennsylvania, they passed a law where eight teachers can now
get continuing ed credits by going out to industry. Instead of
just doing other stuff, they actually go to industry. And the
results out of that was tremendous. They didn't understand what
the local community, what the local business has done. They
didn't understand how much money the people were making, so on
and so on. So, we have done that.
And I can tell you, our local school, we have done open
houses with industry involved. We have changed the whole
concept of how we teach. And like I said, there is 197
children. Our local school that graduates 240 students, we had
88 eighth graders apply for the ninth grade to go to technical
school.
Now, the unfortunate part about it, because there is no
funding and the school is not big enough, only about 15 percent
of them got in. But that perception, I think, is changing along
with what is going on and when it costs $150 to get your toilet
looked at and it is not fixed yet, that is also making parents,
I think, look at it a little different now.
Ms. GLUESENKAMP. Yeah. Thank you so much.
Ms. Hendrickson, I really appreciate you being here. Thank
you so much for the work you do. I am a mother of an 18-month-
old, so I was on all those wait lists. I live in a childcare
desert. It is about 4 hours of driving every day that my child
goes to daycare. So, thank you for sticking it out. Thank you
for your persistence and to your employees who choose to work
in an underfunded, underpaid job. I would not be here without
folks like you and your team. So I guess my question is, well,
first, could you kind of speak to the challenges of
recruitment? And could you also talk, like, what can we do in
Congress?
Ms. HENDRICKSON. So, the number one challenge is the wage.
We cannot pay anything. Wisconsin was about $10 an hour on
family childcare. We make less than minimum wage by the time
you put our hours in. And so we really need to be able to get
those wages up without pricing parents out. So, we have to have
some sort of system where the money goes directly to the wages.
In Wisconsin, we took our ARPA funding and we actually put
it into two pots. Every single program is eligible every single
month to get money. One part is for operational costs, the
other part goes directly to the teachers. And we fought for
that as a group within our state and worked with our state
licensing agency to make that happen. And that is what we are
continuing to try and do because it really comes down to those
wages.
And we also need some more health care and paid family
medical leave and other things that all of us really small
businesses cannot access because we cannot afford to provide
those things for ourselves or for our employees. And so that
way if we had it more--took our taxes and more equitably
distributed them, we would then be able to help encourage all
of our people to be able to do what they love and not have to
worry about being tied to a different employer because they
need health care.
That is also why a lot of parents actually aren't able to
stay home with their children longer. They have their baby and
they have to drop off after 6 weeks because they don't have any
paid medical leave. That would also help offset some of those
crunches for infant care, especially because if a parent is
able to stay home longer, they don't need care for longer. And
so those spots won't be as filled with those infants and
toddlers, which I am all for health and safety requirements, I
do not want ratios. Imagine having six babies, all of you,
while you are trying to, you know, interact with each of them
and meet their needs.
Ms. GLUESENKAMP. Thank you so much. And finally, Mr. Davis,
I am just so impressed with your entrepreneurship and that
spirit will carry you so far, and I think it is great.
One thing that I have heard from other entrepreneurs is
that people who rely on SSDI or SSI or other federal support
sometimes choose not to take on that risk and, you know, risk
their benefits as they start a business. Do you have thoughts
on that quickly?
Mr. DAVIS. So, I never took SSI. I never really believed in
it just because I want to save it for those that really need it
because I know plenty of people that don't really need it, but
are eligible for it. And those that clearly do need it, need a
very comprehensive proof when it is pretty obvious, which I
think is kind of contradictive. But, yeah, I never really
believed in it. So, my parents did a good job of instilling
that in me at a young age that you could work, so you are going
to work. So, yeah, I had that by them and I thank them for that
every day.
Mr. BEAN. They are giving you the thumbs up behind you,
too, Drew. Thank you very much.
Ms. GLUESENKAMP. Thank you so much. Thank you.
Mr. BEAN. Very good. We are going to Missouri, where Mr.
Alford is recognized for 5 minutes.
Mr. ALFORD. Thank you, Chairman. What an honor to be here
today. Thank you to all of our wonderful witnesses today. Drew,
I think you need your own reality show. That would be some
reality show.
Thank you, Chairman and Ranking Member, for holding this
important hearing today. I am really honored to serve on the
Small Business Committee, especially having been a small
business owner myself in the State of Missouri. Small business,
it really is the fabric of America, businesses that contribute
greatly to the American economy, our way of life. Making
America great is simply reclaiming the hope of the American
Dream for everyone and really setting us on a renewed course of
achievement, prosperity, patriotism, and unity for our country.
Today, as we have all recognized here today, businesses are
plagued by rampant inflation, ongoing supply chain issues,
unwavering workforce shortages, overregulation in a lot of
cases, we have talked about that. And I really believe that our
nation is great because of small businesses. And I am honored
to be here today with this Committee and other Committee
Members to hold the Biden administration accountable, to create
a business-friendly Small Business Administration and once
again unleash the American Dream for all Missourians and for
all Americans. It is so important.
We have a lot of small businesses to be proud of in the
great State of Missouri, in our Fourth District, like the
Stanton Brothers. They are a family farm located in Boone
County. Much like your story, Drew, they started their business
out of a first grade project. They have grown it to a business
producing 42,000 eggs per week on their fifth generation family
farm. So, we are very proud of them. And it is really our job I
see it, Mr. Chairman, as our job of this Committee to work
together so that many more Americans can achieve the American
Dream, just like the Stanton Brothers did and just like you
have done, Drew.
And I want to start with you, Mr. Davis. You are really an
inspiration for us. I don't say that lightly. I thank you for
being here, for representing Missouri and America. I kind of
see it as our job to help you grow. And aside from the things
that you have brought up, the grants and tax subsidies, what
else can we do to make it easier for you to grow your business,
hire more people, and really become a rich part of the fabric
of America?
Mr. DAVIS. So, for the grocer industry, that is one word:
distribution. Getting more connections to the distributors is
huge because you need a distributor in the grocer industry to
really grow. And there is a lot of connections out there, but
not enough for the amount of people there are wanting to launch
these small businesses. And there is a lot of great small
businesses in the grocer industry that hasn't been as fortunate
as I was getting a bunch of the media attention that allowed me
to get some of these connections and distribution. So, it is
more making those well known so that we can have more lower
priced goods for consumers.
Mr. ALFORD. More competition. That would be great. Would
you like a little competition for your hot sauce?
Mr. DAVIS. Mainly it is for those big corporations that
like the price gouging and stuff because that really affects us
small businesses because people look at, you know, the franks
that are made in overseas manufacturing facilities with, you
know, child labor. And they are like, why can I buy franks for
$2.99 and here is a 6.99. So, it would really help us with the
competition and getting more higher quality goods on the
market.
Mr. ALFORD. I want to talk a little bit about supply chain
issues because I know, especially 2 years ago, getting bottles
made was a difficulty. The wine industry faced that. All sorts
of bottling issues going on. Are you facing that now with the
supply chain issues, with bottle caps, labels, that sort of
thing? Talk about that. We got 40 seconds left.
Mr. DAVIS. Yeah, the lead time for those things are more
substantial than ever. I know I tried to put in an order for
one of my flavors for just like 6,000 bottles and they are
like, sorry, we don't have that in our warehouse right now.
And same with plastic caps. I mean, they are like, well, do
you want just black or will you settle on white and black? I am
starting to have to do different colors. It is going to look
like the United States flag, which I love the United States,
but it confuses the consumer. They think it is different
flavors and stuff like that.
Mr. ALFORD. Got 10 seconds left. Where can I sample your
product? Did you bring some today?
Mr. DAVIS. I did.
Mr. ALFORD. All right, let us break it out. It is almost
lunchtime. Thank you so much. I really appreciate you and God
bless you all. I yield back.
Mr. BEAN. Thank you, Mr. Alford. Let us go to Michigan,
where Ms. Scholten just walked in in the nick of time. She is
recognized for 5 minutes.
Ms. SCHOLTEN. Thank you so much. This here. Thank you so
much. Sorry, I thought you were talking to me. Thank you, Mr.
Chair.
First of all, thank you to all of our witnesses. I am glad
he asked the question about where the hot sauce was. I can't
wait to try it myself.
We in Congress can sometimes lose sight of what it is like
on the ground running a small business day to day. And your
perspective is invaluable, helping us craft policy that meets
you where you are and helps you stay competitive. Thank you so
much for taking the time to be here.
These questions are for Mr. Heim. As the Ranking Member on
the Subcommittee on Contracting and Infrastructure, I am
especially interested in how the contracting and subcontracting
dynamics play out in the construction sector in particular. In
your experience, what role do prime contractors play in helping
the subcontractors grow their businesses in particular?
Mr. HEIM. So today, probably more than ever, with the
ability to find tradespeople, we do spend a lot of time
educating, also. So, there is a lot of people that have got
into our industry that necessarily are not educated. They are
tradespeople, they are not business leaders. So, we do spend--
like me personally have spent a lot of time with different
individuals, bringing them in, talking about what a prevailing
wage is, how to comply with prevailing wages, literally how to
look at blueprints. So, there is a lot of gentlemen that can
build stuff out there, but really don't understand how to look
at a blueprint. So, yeah, we do spend a lot of time dealing
with the smaller businesses.
Ms. SCHOLTEN. Mm-hmm. And what would be your number one
recommendation, or one or two recommendations, that you would
have for subcontractors who are eventually interested in
becoming prime contractors?
Mr. HEIM. Recommendations? Get ready, you are going for a
ride. I don't know that I really have any recommendations. I
mean, every individual is a little different. Everyone has a
little different training and thinks a little different. So, it
is almost on an individual basis. I don't know that there is an
overall recommendation I would have.
You know, save your money because there is going to be a
time, right? And really, I guess the number one recommendation
I would have is make a relationship with your bank, make a
relationship with your accountant, have a relationship with
your attorney, be part of affiliations that are part of your
association so you can get educated. I mean, I think that would
be the overall.
Ms. SCHOLTEN. That is great. Thank you. I appreciate that.
Yeah, I yield back.
Mr. BEAN. Thank you so much, Ms. Scholten. Seems it is my
turn. U am Aaron Bean from Florida, and I am pleased to
recognize myself for 5 minutes.
I, too, was a small business owner and I started up some
small business. I also was a banker. So, there is great
excitement when things are happening as they are at the table
right there.
I want to remind you, even some of our largest businesses
started small, both Apple and Google started in family garages.
And if you don't believe me, you can Google that right now.
And Drew Davis, how about this? Do you know the story of
FedEx where Fred Smith actually wrote a term paper? I think he
got a C on the creation of FedEx. And who is laughing now with
that?
Let us go back to Ms. Prince. As a banker myself for many
years and, Mr. Phillips, you didn't get to answer Mr. Phillips'
questions earlier, what are you seeing different now versus
servicing loans as it was with the previous administration? Has
it changed? Is there anything different about banking now than
it used to be?
Ms. PRINCE. So, every day the regulatory requirement
increases or the interpretation of a regulatory requirement is
ever-changing. So, we spend a whole lot of time. Back in the
day when our family first got involved, compliance or
regulatory compliance was probably a part of a person, a part
of a full-time employee. Today it is at least six full-time
employees. It is a whole other group of people within our
organization that are trained compliance officers, trained in
regulations. And we spend a whole lot more money reaching out
to make sure that all of our pieces are in place, not to
provide a safe and sound loan, but to provide a safe and sound
loan that checks all the boxes, that has all the pieces of each
and every regulation, like I said, that is an ever-changing
interpretation.
Mr. BEAN. I gotcha. What do your customers say? I know when
I was there every loan I made to every business that I felt,
you know, a part of the excitement of growing that business and
making sure that they grew and, most importantly, could pay us
back and that they would thrive as well. What are your
customers saying? What is the word on the street at First Texas
State Bank?
Ms. PRINCE. So, our customers are expressing the same
things about supply chains and finding labor and ever-
increasing costs. Our customers are very concerned about
interest rates and they are concerned about the same sort of
regulatory requirements. So, they want to go in, they want to
get a permit, they want to do their job. They want to do their
job right. They want to know that they can predict the cost of
that so that they end up walking away with a profit. And in the
current environment, that is an ever-changing process, also.
Right? If you started in 2019, or we started to build a
building in 2020, the price went up probably 50 or 60 percent
before that building was complete. And most people don't have
that in their business plan.
So, we need a tax environment that is good, but we need a
regulatory environment that is appropriate. We need interest
rates that are reasonable. We need energy. We need the things
that are all the inputs into our businesses so that they can be
profitable and successful.
Mr. BEAN. Thank you very much.
Ms. PRINCE. And I am with you. Every one of those
businesses----
Mr. BEAN. You feel for them.
Ms. PRINCE.--we are attached to them, we have a partnership
with them. We are there to make sure that we weather the storm
with them.
Mr. BEAN. Very good. No, I am with you.
Mr. Heim, I have got a lot of questions, but guess what?
That clock on me is eaten up. You have talked about inflation
kicking your tail, but there is something on your mind right
now. What is it?
Mr. HEIM. So, in dealing with banks for the last 30 years,
the one thing that I really notice is as these regulations grew
and as your conditions grew, right, we lost our relationship
with our bankers. So, what used to be you go out to lunch, they
start to fully understand your business and understand why you
need what you need. Today, I don't think that is there anymore.
I think you are writing on a piece of paper on if they feel
adequate for you to get a loan or not. But it is no longer that
personal relationship.
Mr. BEAN. To that end, there are people like Ms. Prince--
and I thrived on that because the big banks, I was a small
little banker and that was my little secret weapon that I could
develop that relationship. So, she is already nodding, she gets
that. And that is why bankers like Ms. Prince are going to
thrive.
With the last few seconds that I have, let us go back to
Drew Davis. Drew Davis, everybody wants to know you are 17. Are
you a junior? You are a junior now, about to be a senior or you
are a senior?
Mr. HEIM. So, I am a senior running my business out of the
library 5 hours a day because I only have two classes.
Mr. BEAN. No. Well, we are all proud of it. Your folks are
proud. They are beaming tall. But with the last few seconds,
everybody wants to know, what are you doing next? Are you going
to college? Are you going to just go full-time on the hot
sauce? What is next for Drew Davis?
Mr. DAVIS. I mean, I don't really know because every time I
think I know what is next, something else happens. But to that
tune, I think I am going to be traveling a lot next year and
into later this year, just focusing on scaling and getting our
story out there because I think it is an important one. And
just have as many people get Crippling Hot Sauce in their hands
as humanly possible.
Mr. BEAN. Very good. And hopefully, a lot of people are
seeing it today. Let us wrap up with Maryland. Mr. Mfume, you
are recognized for 5 minutes.
Mr. MFUME. Thank you very much, Mr. Chairman. I want to add
my thanks to the others who have commended you for gathering us
for this hearing today. I want to particularly thank the
witnesses for diverse testimony. As Dean Phillips said when he
was here earlier, I think he referred to all of you as a
mosaic, a banker, a construction worker, company, a product
maker, and a service provider.
One of the things about being the caboose is that in the
end, everything that can be said has been said. It is just that
not everybody has said it. So, bear with me for a few minutes
as I go through just really some observations. I don't know if
I have got that many questions.
Mr. Heim, let me just let you know that I heard your
invitation to Representative Meuser, and I see he did not say
yes. So, I am going to commit him to come work with you from
can't-see in the morning to can't-see at night in Pennsylvania.
And when I go on to the floor to vote, I will let him know that
he is expected to follow up. I am doing unto him as he would do
unto me. Trust me.
And one of the things that has been interesting from my
perspective is the fact that so many people, Mr. Chairman, have
talked about children and their children and other children and
providing and also building a future for those children. I keep
hearing the terms three-year-olds and four-year-olds. And that
was a long time ago for me. So, I was particularly happy that
Ms. Prince mentioned and said, does anybody remember the 1980s?
Yes, there are some of us still around who remember that. And
for me, the perspective is interesting. In the 1980s, I was a
freshman on this Committee. Ronald Reagan was president, and I
spent five terms here in this Committee hearing testimony like
this.
My angst is that now, many, many years later, I am still
hearing the same issues, the same problems. And I wonder, is it
a matter of having come a long way or still having a much
longer way to go.
I left this body after five terms on my own, walked out the
door and wanted to go see the rest of the world. And here I am
26 years later, back on this committee hearing this. So, I am
hoping that as we establish, Mr. Chair, a record here that that
record really provides direction so that we can come out of
this fashioning legislation to be able to assist with the
problems that we have heard about today, which are not new, but
seriously should not be allowed to continue and to go on. It is
a good record. I want to thank all of you for adding to it.
I am going to use this. I think I have got 2 minutes here
just to say a couple of things and ask a couple of quick
questions. Ms. Hendrickson, you talked about the increased
costs that you are facing and how, unfortunately, you have got
to continue to pass it on and pass it on to parents. Unlike big
corporations, small businesses don't have teams of lawyers and
tax accountants. And so I am really interested in knowing if
you have some thoughts on the tax code and how it affects you
and a suggestion of something that might be done to make it
more palatable.
Ms. HENDRICKSON. I think just fair taxation in general. All
of us small business owners pay a much larger percent of our
income into a system that then takes that money and it goes to
the larger corporations and goes to those types of things so
that our small businesses have a harder time then and are
paying for those large businesses to buy back stock and things
like that for their shareholders.
Mr. MFUME. So, a greater sense of fairness.
Ms. HENDRICKSON. Yes, definitely. And reinvesting in our
people, especially our rural communities, because everybody is
leaving because main street businesses are leaving. And when
somebody drives through, they do not have a place to stop to
eat because there is nothing left. We can look at it as like
our interstate system. They go around everybody, and the
fastest person who can drive on that the fastest gets----
Mr. MFUME. I see.
Ms. HENDRICKSON.--the most instead of our.
Mr. MFUME. So, you would support tax credits for
reinvestments----
Ms. HENDRICKSON. Yes.
Mr. MFUME.--back into small businesses.
Ms. HENDRICKSON. Yeah.
Mr. MFUME. Good. Mr. Davis, I want to ask you just one or
two quick things. First of all, I want to commend you. I have
got a 17-year-old grandson, so he is on his way to college, and
in 4 years I may send him directly to you so that he might find
a way to get his first job. But I want to commend you seriously
on what you are doing. I don't even remember what I was doing
at 17, but I know I wasn't as accomplished as you are. So thank
you for being here.
Thank you also for the simple eloquence of your example so
that other people who watch this, who may have a disability,
may come to understand that that is not the end of the world
for them. And we have heard on this committee over and over
again, well, why do you need to focus on this group and why do
you need to focus on that group? And we focus too much on women
or we focus too much on minorities or disadvantaged businesses
or veterans. Well, I am going to add to that category that we
ought to find some way to focus also on individuals like
yourself who have overcome a great disability and who are
contributing back to the country. So I want to congratulate you
on that.
I see my time--this time does not last long, ladies and
gentlemen. It is fleeting. Mine has expired and it is starting
to flash in front of me. So, let me just thank you again for
being here for your testimonies.
Drew, I do have a few seconds. Would you go ahead and, for
the record, kind of sum up what your feelings are about this,
particularly from your perspective?
Mr. DAVIS. Yes. So, I believe, like you mentioned, that
from my ownership of Crippling Hot Sauce, millions of dollars,,
of tax dollars could be generated off of just simple grants
from those individuals that aren't as fortunate as I am. I have
been lucky enough to meet a bunch of individuals, and I just
really thank everybody that has been with me along the way. But
I have talked to hundreds of people with disabilities through
my kind of statistical analysis just to see how people respond
off of the name. And I also ask them simple questions. And the
main answer is, man, we would like to do something like you. We
just don't know where to start because there is not
representation and there is not many resources out there.
Mr. MFUME. Thank you. Thank you, Mr. Chairman.
Chairman WILLIAMS. Now we go to Mr. Molinaro for 5 minutes.
Mr. MOLINARO. Thank you, Mr. Chairman. I have some prepared
questions I wanted to get to, but I wanted to echo my
colleagues' comments. Eighty percent of those with disabilities
are unemployed in America. Eighty percent. And Mr. Davis, Drew,
I am going to plant a question your mind and I am going to let
you answer it last.
I have spent a great deal of time in the disabilities
workspace. Creating a pipeline to jobs is so, so challenging.
You are inspiring in your own right. But there are countless
young people and adults living with intellectual, physical, and
developmental disabilities today who would like to enter the
workforce. I would like you to close. I am going to take my
time, but I want you to close with the one thing that you want
them to know about how to be a success. And I say this as the
father of a child with a disability who often needs to be
inspired. And I want her to hear your words before we close
today.
Mr. Chairman, there is little question that small
businesses are the backbone of our local economy. Seventy
percent of new jobs are created by existing small businesses.
During the last 2-1/2 years, small businesses felt the brunt of
the pandemic economic closure and the challenges that we face.
I know many of my colleagues have already asked so many
questions already. I am sorry that I might repeat one or two in
my few moments.
But first to Mr. Heim. I live in a place where access to
workforce, like lots of places in America, is a challenge. But
because it is a more rural part of New York, limited access to
transportation. Daycare is a massive obstacle. Educational
opportunity is limited, and in many cases, of course, New York
leads the nation in out-migration. So, we see more people
leaving other states than any other place in America.
Can you talk briefly? What are the things you have done or
would do to expand access to that workforce?
Mr. HEIM. So, you are asking how do we get them not to
leave?
Mr. MOLINARO. Yes. I mean, I know the answer.
Mr. HEIM. We are in the same shape.
Mr. MOLINARO. Yeah.
Mr. HEIM. Pennsylvania is the same way. So, we are in a
rural area, also. You know, honestly, I believe it starts at
high school. It starts at middle school. We need to retrain the
way kids are thinking. We need to get them to understand that,
you know, doing what we do in our trades or being in
manufacturing is a good thing. There is a lot of money to be
made out there. And in our industry there is something to be
very proud of. When you are done working for the day, you could
step back and you can look at something for the rest of your
life and say, I was part of that and you can take your
grandchildren there and so on. So, it is really educating the
youth, really, and getting a mindset change.
Mr. MOLINARO. Yeah. We often say that our educational
outcomes don't meet our economic needs. And in some ways, the
lack of vocational training, applied sciences, and others not
only diminishes the value of the work, but demoralizes the
individual. And I find that many people trying to enter the
workforce, in particular, lacking access to that kind of
education feel worth less. And, of course, they spent 2 years
listening to governors like mine say that certain people were
essential and certain people were not as if government has any
right to dictate. So I appreciate you pointed that. Did you
want to add to that?
Mr. HEIM. No.
Mr. MOLINARO. Ms. Prince, so, you know, my part of New
York, upstate, rural, massive what we call financial deserts,
banking deserts, access to capital is a major concern. What are
the--what particular steps would make sense to broaden access
to capital, in particular, support and spur innovation? Knowing
that Drew gets the last 60 seconds of my time.
Ms. PRINCE. Okay. So. in our organization, we have 14
locations. Some of those locations are in the metroplex, some
of those locations are in communities as small as 1,500 people.
So, we have made a commitment to those deserts, as you say, to
make sure that they still have access to community bankers who
are focused on their needs and preserving their way of life.
When you think about the people who have left to take--
because they didn't want a construction job, the same thing has
happened across the country in ag jobs. Ag families have lost
generation after generation to the city. And we need those
people back just like we need the construction people back.
Mr. MOLINARO. I appreciate that. Mr. Chairman, I appreciate
the opportunity to Chair the Subcommittee on Innovation
Workforce Development and I appreciate that honor. Drew is a
living example of what we need to do to spur innovation.
Drew, what would you tell those living with disabilities
what they need to do to be a success?
Mr. DAVIS. So, mine would be just to push the envelope.
There is a bunch of technological resources you got out there
from technology. My favorite new one is AI and which I use to
write a lot of my captions because I can't write as fast as a
lot of people can. But it is just to use your resources. Don't
be afraid of them.
And live your life like a story, one page at a time, and
just continue seeing what you could do. If you fail, it is
okay. If you don't, you are a legend.
Mr. MOLINARO. Mr. Chairman, you are a legend. I yield back
my time.
Chairman WILLIAMS. That is a great way to close. And I want
to thank all the witnesses today. You all have really done a
great job. And one thing I want you to take back home, because
everybody looks at Washington, we are a disaster. We are a mess
up here, we know that. But at the same time, I think you can
see today that we do have a lot of things we agree on. And this
was a great hearing today where I think everybody agrees on the
importance of small business and that sort of thing. So I want
to thank all of you for being here.
So, without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witnesses to the Chair, which will be forwarded to the
witnesses. I ask the witnesses to please respond promptly.
And if there is no other further business, without
objection, the Committee is adjourned. Thank you.
[Whereupon, 11:46 a.m., the committee was adjourned.]
A P P E N D I X
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