The Impact of Gas Prices

Departments - Notebook

Recent study identifies that most North American small businesses are experiencing fuel spike woes, but Michigan small businesses as really feeling the hurt.

© nd700 | adobe stock

Call me Captain Obvious, but gas prices are putting a significant dent into 2022 profit margins and the ability of small businesses to bounce back from the business obstacles of the last two to three years. And recent gas price research conducted by Alignable of nearly 6,500 small business owners reflects nearly two thirds (68%) indicate that gas price spikes have had a “very significant’ negative effect on their business recovery.

Alignable, who conducted the research, is an online referral network for small businesses with more than 7 million members across North America. They also track and report on business trends that impact the small business community.

In addition, Alignable’s research found that not only are gas price spikes impacting those businesses that consume a lot of gasoline diesel as a part of doing business, but also those companies that rely on “trucking” to receive or send materials and goods. These added expenses are being passed down to the small business owner, as well.

Another interesting bit of information from Alignable’s research is that while the recent gas price spike affects all small business owners, it seems to impact minority-owned businesses at a bit of a higher rate compared to non-minority owned businesses (74% compared to 66%, respectively).

And it appears that Michigan small businesses are really feeling the hurt, with 78% of owners claiming gas prices are hurting their recovery efforts. According to Alignable, “Michigan is often at or near the top of our list for small business rent delinquency and for states having the hardest time recovering. So, yet again, Michigan is atop another list of small businesses struggling, which must be frustrating for that state’s small business residents.

Many states have at least 60% of small businesses pointing to gas prices as a major stumbling block on their road to recovery, according to the data. These include California (68%), Virginia (65%), North Carolina (64%), Ohio (63%), Pennsylvania (63%), Illinois (62%), and Massachusetts (61%). Some 60% of small businesses in Florida, New York, and Washington State are struggling with gas prices, too.

The state with the lowest incidence of gas spike issues is Colorado, with only 47%.

Our Canadian to the north are having similar issues, according to the research. Overall, 64% of Canadian small businesses said the negative impact of the recent gas price spikes is “very significant,” compared to 68% in the U.S.

AB tops the Canadian chart with 70% of its small businesses struggling with gas prices. Ontario comes in at 64%, and BC at 61%.

© nd700 | adobe stock

How The Other Half Sees It

Your cousins in snow and ice management provide some insight into the challenges at the state and municipal levels.

Here is some interesting data from your cousins in snow and ice management.

Recent research conducted this year by the American Association of State Highway and Transportation Officials finds their segment of the snow and ice industry has been experiencing higher than normal snowplow operator vacancies this winter.

In fact, 84% of research respondents reported they are experiencing higher than normal snowplow operator vacancies. In addition, 81% of vacancies were attributed to a lack of full-time employees, while others were due to problems finding seasonal workers or private contractors.

As result of this shortage, a quarter of those who responded said they’ve adapted by changing their level of service.

Jim Tymon, the association’s director, said in a news release the survey shows the shortage of snowplow drivers makes it more difficult to keep the traveling public safe and allow emergency responders to reach people in need.

What’s to blame for this trend? City and state transportation managers point the finger at tight labor markets, uncompetitive salaries, retirements, and job switches. In addition, officials say they’re competing with private industry to hire drivers with commercial licenses. These drivers have been in high demand and can make much more money driving trucks than they can working for state agencies or private contractors.

A lot of this must sound familiar to those on the commercial side of the industry.

The association’s survey, conducted in January and February, solicited responses from 31 state departments of transportation and 51 public works agencies across the US.

News of the Weird

Name That Plow!

With all due respect to Bill Shakespeare, “A snowplow by any other name would push snow as sweetly.”

This winter, the Minnesota Department of Transportation solicited citizens to name its snowplows and received 22,000 proposals, of which just under 60,000 valid votes decided this year’s finalists.

This year’s big winner -- generating 40,024 votes was Betty Whiteout, a nametag honoring the late actor Betty White, who died just before her 100th birthday earlier this year. Here are other submissions that generated top votes with Minnesotans:

  • Scoop Dogg
  • Plowasaurus Rex
  • Ctrl Salt Delete (like the popular computer shortcut Ctrl+Alt_Delete)
  • Blizzard of Oz
  • No More Mr. Ice Guy
  • Edward Blizzardhands
  • Sir Plows-a-Lot
  • Catch My Drift

This was the second year MnDOT sponsored the Name A Snowplow contest. Last year’s winner was Plowy McPlowFace.

So, we want to know if you happen to have any unique names for your equipment, or if you have any unique name suggestions that are better than was Minnesotans came up with this year. If so, email them to editor Mike Zawacki at mzawacki@ascaonline.org with the subject line: Name That Plow.

A New Perspective on Labor

The “Great Resignation” may not have been so great, according to University of Michigan business faculty.

We’ve all heard about the “Great Resignation” of recent years, with large numbers of people giving up on long-term careers. And many in the snow and ice management industry have dealt with how this apparent trend was impacting their ability to hire key people into their organizations.

However, a recent panel of business faculty at the Ross School of Business at the University of Michigan, claim this employment trend is misunderstood.

© © Boris Zerwann

Research data indicates large numbers of resignations in the last couple of years aren’t due to people giving up on long-term careers, but rather to entry-level workers finding better opportunities, according to Nirupama Rao, assistant professor of business economics and public policy at Michigan Ross.

And while the term “Great Resignation” has become popular, it’s a misnomer, Rao says. “This isn’t a story of widespread quitting of jobs. It’s much more a story of low-wage workers leaving jobs to move to better jobs … We hear a lot about white-collar burnout, but that’s really not the driver of this pattern.”

In addition, general staffing issues impacting business closures and service reductions have been lumped together with the “Great Resignation” concept. COVID and its related exposure and illness issues played a much more significant role on employment issues, according to the panel.

“A labor shortage was really becoming a problem before the pandemic, so in a lot of ways, the situation we’re in now is getting back to where we were before the pandemic,” stated Panelist Gabe Ehrlich, director of the Research Seminar in Quantitative Economics at U-M’s College of Literature, Science, and the Arts. “A big part of it is that the population in the United States is getting older; a lot of people are aging into retirement. That was starting to put a limit on job growth even before the pandemic.”

The panel concluded that ongoing employment issues are fundamentally operational problems with how to staff more effectively and how to better find replacements from the current labor pool.

This is an assessment many Snow Magazine editorial contributors have made over the last year or so when addressing the labor issue’s impact on the professional snow and ice management industry. In fact, Snow Magazine contributor and Greater Detroit-based Brilar COO Mike Voories recently authored the book Complain or Compete: Creating an Unfair Advantage in a Tough Labor Market on establishing more thoughtful and efficient hiring practices. You can find Mike’s book for sale on Amazon.

Re-examining Noncompetes

Recent federal and state levels actions suggest more changes for 2022 pertaining to the enforceability of noncompete agreements and other restrictive covenants.

Still using noncompete agreements with your labor force, or with key members of your leadership staff? Be aware recent actions taken by federal and state legislatures suggest even changes are coming in 2022 pertaining to the enforceability of noncompete agreements and other restrictive covenants.

According to Freeman, Mathis and Gary LLP legal eagle Sean Riley, President Biden issued an executive order in July 2021 encouraging the FTC to curtail the unfair use of noncompete agreements. To date, the FTC hasn’t issued new regulations in that regard, though it did release its draft Strategic Plan for Fiscal Years 2022-2026 in which it listed increase use of provisions to improve worker mobility including restricting the use of non-compete provisions as a goal.

While substantive Federal action remains pending, Riley says several states have taken matters into their own hands, promulgating new laws that significantly restrict the use of noncompete agreements:

Nevada’s recent amendment to the Nevada Unfair Trade Practice Act took effect in October 2021, prohibiting non-competes for hourly employees and prohibiting employers from bringing lawsuits to restrict former employees from providing services to former customers so long as the former employee did not solicit the former customer. Illinois passed a similar bill which went into effect on January 1, 2022, which prohibits non-competes for employees earning less than $75,000 per year and non-solicitation agreements for employees earning less than $45,000 per year.

Colorado has taken a more stringent approach, voiding non-competes and non-solicitation agreements with certain exceptions, and making conduct that could be deemed a threat or other means of intimidation to prevent a former employee from engaging in a lawful occupation as a misdemeanor subject to jail time.

“As new legislation is enacted, employers should evaluate whether and to what extent their non-competition and non-solicitation agreements are enforceable in the jurisdictions in which they operate and whether they have taken appropriate steps in jurisdictions with minimum earnings thresholds,” Riley says.