What Donald Trump may mean for suburban business
Despite the shock and awe in some quarters over the election of Donald Trump as our next president, there appears to be less angst within the suburban business community.
The bottom line: a Trump presidency could be good for business.
"The perception is that Trump will do some positive things for the economy," said Getachew Begashaw, an economics professor at Harper College in Palatine.
To wit, Trump has pledged to lower taxes, reduce government regulation, reform health care and repair the nation's aging infrastructure. If he delivers on these promises, it could stimulate the economy, Begashaw said.
"Lowering taxes leaves more money for people to spend and businesses to invest ... Spending more on infrastructure creates jobs," Begashaw said. "You can see business responding to these expectations with the rise in the stock market."
The reaction on Wall Street is one thing. The reaction on Main Street is another.
But suburban business owners generally seem optimistic about a Trump presidency.
"The election, to a lot of people's chagrin, will be good for business," said Patrick Franz, president of Clairmont Ltd., a homebuilder based in Burr Ridge. "Donald Trump is a businessman. He knows the realities of business."
A national survey supports this viewpoint. The National Federation of Independent Business reports that its Small Business Optimism index rose 3.5 points following the election, with business owners expressing hope that the economy will improve and more jobs will be created.
Among the moves Trump hopes to make to benefit business:
• Taxes. Trump wants to shrink taxes for individuals by reducing the current seven tax bracket system to three brackets. He also wants to cut the corporate tax rate to 15 percent. Businesses now pay taxes ranging from 15-35 percent.
• Regulation. Trump wants to scale back on government regulation, including some EPA rules, and some banking reforms put in place during the 2008 financial crisis. Businesses often complain that undue government regulation adds to their costs.
• Health Care. Trump has vowed to "dismantle" the Affordable Care Act, or Obamacare, which companies and individuals blame for rising insurance premiums. He believes measures, such as allowing the sale of insurance across state lines, will lower premiums.
• Infrastructure. Trump wants to repair the nation's aging roads, bridges and airports, which would create new jobs in the short term and improve the nation's transportation system in the long run.
"Federal taxes, regulations, and Obamacare are the three biggest impediments to running a small business in America. Small business owners have high expectations that those problems will be addressed," according to a statement from Juanita Duggan, President and CEO of the National Federation of Independent Business.
Not all suburban business owners are as optimistic about the Trump presidency. Those who are reliant on international trade are particularly nervous because Trump made several campaign promises that stoke protectionist fears:
• Tariffs. Trump said he wants to place tariffs on imports from countries he feels have unfair trade practices, such as China and Mexico.
• Trade Pacts. Trump said he wants to withdraw the U.S. from trade agreements, including the North American Free Trade Agreement and the Trans-Pacific Partnership.
• Wall. Trump has repeatedly pledged to construct a wall along the U.S.-Mexico border and to deport more illegal immigrants.
Matt Eggemeyer is feeling particularly uncomfortable about trade. On Nov. 1, his firm, Keats Manufacturing Co. in Wheeling, opened a small outpost in Queretaro, Mexico. Trump was elected president a week later.
"I feel a little weird about it. But in order to do business in Mexico, we needed to open a facility there. Customers there wouldn't talk to us unless we had a facility there. I felt I had to do what was right for our business," said Eggemeyer, the COO of Keats, a metal stamping company.
The irony to Eggemeyer is that the tiny, four-employee facility has opened up business in Mexico and increased production for the 175 other workers employed by Keats in the United States.
"Because of Mexico, we couldn't be busier in Wheeling," Eggemeyer said.
"I understand what Trump is trying to do. I'd love to see more work stay in the United States. But it's a global economy. The majority of our products are headed to the borders," Eggemeyer said.
One topic on which most suburban businesses agree is the need to stem rising health insurance costs. They welcome Trump's pledge to overhaul the Affordable Care Act.
"I've come to calling it, 'unaffordable access to insurance coverage' instead of 'affordable access to health care,'" said Darice Grzybowski, president of H.I. Mentors, a health care consulting firm based in Westchester.
Premiums are expected to rise an average of 45 percent in 2017 for consumers whom purchase their health care coverage on the government exchange, according to the Illinois Department of Insurance.
Consumers who receive coverage from their employers should see premiums rise by a more palatable 5 percent, according to a survey by the National Business Group on Health.
Given those numbers, Grzybowski believes Trump will overhaul the Affordable Care Act.
"Something has to be done to make it more affordable," she said. "Everybody is on the journey together to get a workable health care plan, not bankrupt the country."
Mary Lou Mastro, CEO of Edward-Elmhurst Health, believes Trump will keep in place some portions of ACA, such as allowing children to stay on their parents policies until age 26, and continuous coverage for pre-existing conditions.
Changes could include allowing the sale of health insurance across state lines, which could create competition and lower costs, and the establishment of health savings accounts to allow consumers a tax-free way to accumulate money for future health care expenses, said Mastro, who oversees hospitals in Elmhurst and Naperville.
"I think it will be more market driven," Mastro said.
But despite Trumps pledge to repeal Obamacare "day one," it could take 18 months to two years for consumers to see changes, she said.
"We're now in the 7th year of Obamacare. We are so entrenched in it, it's going to take some time to unravel," Mastro said.
"No matter what happens, we will continue our focus to deliver higher quality care that is less expensive."
Trump TakeawaysHow suburban companies believe Donald Trump will affect business
Taxes. Trump wants to cut the corporate tax rate to 15 percent. Businesses now pay taxes ranging from 15-35 percent.
Regulation. Trump wants to scale back on government regulation. Businesses often complain that undue government regulation adds to their costs.
Health Care. Trump has vowed to "dismantle" the Affordable Care Act, or Obamacare, which businesses blame for rising insurance premiums.
Infrastructure. Trump wants to repair the nation's aging roads, bridges and airports, which would create new jobs and improve the nation's transportation system.
Trade. Trump said he wants to withdraw the U.S. from trade agreements, including the North American Free Trade Agreement and the Trans-Pacific Partnership.
Tariffs. Trump said he wants to place tariffs on imports from countries he feels have unfair trade practices, such as China and Mexico.
Wall. Trump has repeatedly pledged to construct a wall along the U.S.-Mexico border and to deport more illegal immigrants.