Wait…Wait…You hear that…? Shhh, there it goes again. It’s the sound of the Dow Jones Industrial Average riding the rails of that roller coaster we call the economy. Quiet… Don’t make a sudden move or it might drop again. Should we just sit here and hold our collective breaths?
On Friday, June 1, the Dow dropped somewhere in the vicinity of 275 points. The reasons? The monthly jobs report was down — coming in at 69,000 added jobs from a predicted 150,000 new jobs. Chinese production was down. European markets were in flux due to uncertainty in areas such as Spain and Greece. Who says we don’t live in a global economy, right? Many factors converged, creating this downward economic trend. In fact, the fall of the Dow on that Friday had erased all of the year’s cumulative “success,” and we were back to where we started to begin 2012.
Fast-forward a few days and the nation witnessed a recall election in Wisconsin, where current Republican governor, Scott Walker, was pitted against the Democratic challenger, Tom Barrett. The results are in, the ballots have been tallied and Scott Walker was victorious, again. Perhaps the people of Wisconsin were right the first time around. The victory could signify a change in colors for the former blue one. Now Wisconsin might not be that gimme state that the democrats circle on their electorate “big board” every year.
What does all of this mean? In five months the presidential election will determine if President Obama continues on with his vision for the country or if Mitt Romney gets his chance. It might be a bit early to discuss the election, but believe me, you will start to be bombarded with campaign speeches, advertising and all the hoopla that precedes a presidential election.
As the candidates posture to find the “hot buttons” and strategies that can help them win the race, the nation — and world — will continue to be consumed with the most recent job and economic reports. There are other issues that may be in the headlines for a day or so, but the focus usually comes back to the economy.
But lurking behind the scenes are several issues of interest to small businesses that, realistically, won’t resurface until after the presidential election. Those include the expiration of tax cuts, implementation of health care reform and a strategy to address the national debt.
Nevertheless, there are those out there that feel that the country’s toils could be alleviated with a change at the highest office, while others quickly will debate that the country’s problems aren’t a quick fix, we need to stay the course, and it’s just going to take some time to get back on track, economically. And, due to a divided House and Senate, many believe Capitol Hill is the burial ground for constructive policies, which eventually stall out and die.
And that’s where you come in. Whether you are a small business owner or large mechanical contracting company, you should be aware of what is important to you and the viability of your business. It is up to you to do your homework before you cast your ballot. An easy Google search can lead you to either candidate’s policies. I’m not here to tell you for whom to vote. Make sure you are voting for one particular candidate for the right reasons —the one who you think will help your business thrive in the next four-year cycle.
Recently, I had the chance to talk to representatives of some of our industry associations to discuss the issues that affect contractors on a daily basis; to discuss the importance of getting involved and, most importantly, voting.
The PHCC—NA expresses that although exact presidential election issues of interest for individual PHCC members can vary according to political beliefs and personal circumstances, the association lobbies on top priorities established through a Government Relations Committee. Those current key issues include repeal of the estate/death tax, a more workable EPA Lead Renovation, Repair and Painting Rule and consideration by the U.S. Dept. of Energy of PHCC’s input on the proposed workforce guidelines associated with the Weatherization Assistance Program (WAP).
Keith Bienvenu, PHCC—NA president, said, “As important as the views of the President are, much attention must be focused on the tone the current, and the future, Administration will set. The tone an Administration establishes will reflect the direction it intends to take regarding the governing of America (both in terms of opportunities for industry and possible destructive situations as identified by industry).
“In the regulatory arena, one of the greatest threats to small business concerns methods in which policy is developed in this country. A democracy is founded on the ability to allow ‘the people’ to be heard. In the past few years, there has been a steady shift to develop policy by regulators, which has the direct effect of taking the voice away from ‘the people.’ We elect legislators, not regulators. In that sense, issues on Capitol Hill sometimes become almost irrelevant, as federal agencies develop what they believe is in the best interest of the nation without input from elected officials (legislators).”
As an example, PHCC—NA is engaged in a battle with the U.S. Dept. of Energy regarding workforce guidelines for the federal Weatherization Assistance Program (WAP). The program seeks to certify individuals to conduct energy efficiency tasks in a home. Though this on the surface may not seem unreasonable, the standards and specifications are being written by the government with little input from industry experts. Many of the tasks involve plumbing and HVAC — tasks that only a seasoned professional can responsibly perform.
Matt Michel, CEO of the Service Roundtable, has a bit of a contrarian view when it comes to the upcoming election. "While elections, politics and the business cycle are important to any individual contractor, they are not as important as the attitude and effort of the contractor. Do not let what’s happening in Washington dictate your success. Do not let Washington become an excuse for underperformance. The owner of a business can make more of an impact on his or her business than Washington, the state capital and the business cycle combined," says Michel. "Contractors who are aggressively investing in their businesses, who are marketing more, and who are putting out greater effort are not only maintaining their pace, many are accelerating. How can that be? Most of their competition is running scared, trying to conserve their energy, even dropping out of the race until conditions are more favorable," continues Michel.
According to the MCAA, we live in difficult economic times, and the mechanical contracting industry is not an easy way to make a living. We would like to think that our elected representatives understand just how difficult it is to run a business, and approach their legislative responsibilities in the most constructive manner, offering certainty rather than brinksmanship. But we all know that partisanship in Washington has led to a dynamic that most business people struggle to understand.
We can only hope that by participating in the process we can make a difference. Economic growth is the way to restore jobs in the construction industry, and that should be the goal of public policy on both sides of the aisle.
“Our economy can be strengthened when candidates for office are elected who understand both the importance of the construction industry and the challenges of running a business in today’s uncertain business climate,” said a spokesperson for the MCAA.
In Congressional races, MCAA has offered support to candidates who are open to MCAA’s views on:
• Improving construction markets
• Improving cooperative labor/management relations and other association issues
• Improving public contracting practices
• Increasing infrastructure funding
• Davis-Bacon reform
• Fair utility competition
• Fair employment classification criteria
• Reducing estate taxes
• Improving employee safety and health
• Immigration reform
• Pension and healthcare reform
Probably one of the most important issues coming up will be pension reform. MCAA will be working to ensure that the industry’s multiemployer pension funds are protected in a reform bill.
According to the Nexstar Network, the most important facet for its members moving forward is growing consumer confidence and maintaining growth in home improvement spending. Both have increased over the lows in the recession and our members continue to reap the benefits with strong year over year revenue growth in HVAC, plumbing and electrical renovations and repairs.
“We saw what can happen when energy efficiency tax credits were enacted — it created a huge revenue bubble in 2010 in HVAC replacements,” said Jack Tester, president and CEO of Nexstar Network. “Then it created a huge vacuum in early 2011 when they expired. I don’t see any potential legislation on the horizon regardless of who is elected that would unleash that kind of wild swing in consumer spending in our industry. And I personally don’t like those artificial revenue bubbles created by government. The fall-out lasts longer than the benefit in my opinion.”
“These are extremely important times in our nation,” said Bienvenu. “Federal budget spending and national budget policy — and the ways we are going about our spending — are being considered and re-evaluated for the first time in recent memory.”
Contractors are very astute political people. They view life and business with a unique perspective and they draw conclusions on their own without any interference.
“I think that for many Americans the only true misconception regarding the upcoming Presidential election (or any election for that matter) is when they feel that their vote — their participation in the process — can’t or doesn’t make a difference,” continued Bienvenu. “There is nothing more important than involvement, and those who practice or participate always see a return on their investment.”
It may be the right time to start thinking of the policies that hit home for your business. And perhaps active legislative participation could be your next calling.
“I can tell you with confidence that if you make the effort to be an active participant in the legislative and regulatory process, your opinions will be heard, and you’ll see results,” said Bienvenu. “Like anything else, there is true strength in numbers. Many voices carrying the same message have much more influence than just one. The secret is to become educated on issues and to make your voice heard.”
It seems that every four years there is this declaration that “This particular election is the most important in your lifetime.” This one is no different. Whether you believe that or not, is your vote important enough? "For contractors, the right thing is to focus their time, energy, and effort on their business so that they can succeed and prosper regardless of the Oval Office’s occupant and the parties in control of congress," says Michel.