New Member Highlight – Life Remembered
Life Remembered founded by George Stoecklein, Sr. in the 1950s, Life Remembered, formerly CMS East, is one of the largest privately-owned cemetery organizations in the country. Locally they operate Elan Memorial Park a full-service cemetery dedicated to providing solutions for your family’s burial needs – no matter whether you prefer cremation, above-ground, or in-ground burial.
How Big Brands Turn Customer Review into Sales
Source: US Chamber of Commerce
Backpack maker JanSport, underwear brand MeUndies, and La Colombe Coffee Roasters are among the companies tapping tech tools to optimize consumer review content to deliver results.
By: Mark Hamstra , Contributor
Why it matters:
- 98% of consumers read online reviews at least occasionally when browsing online, according to BrightLocal.
- Consumer interaction with online reviews is up 50% since before the pandemic, according to PowerReviews, as consumers adopted more digital shopping habits.
- In turn, brands such as JanSport, MeUndies, and La Colombe Coffee Roasters are weaving positive customer reviews into their marketing messages; offering product samples to solicit reviews; and even leveraging employee reviews to stoke brand equity and drive business.
Product sampling, question-and-answer polls, and more sophisticated analytics have become key tools businesses use to optimize the marketing power of customer reviews.
Major brands such as backpack maker JanSport, underwear brand MeUndies, and La Colombe Coffee Roasters are using these tactics and others to turn their customer reviews into a more powerful form of user-generated content.
A recent survey from BrightLocal found that 43% of consumers said they regularly read online reviews when browsing online for local businesses, for example. That’s up from 19% in 2019 and 26% in 2020. Almost all consumers surveyed — 98% — said they read online reviews at least occasionally.
Research from PowerReviews, meanwhile, shows that consumer interaction with online reviews — including actions such as searching, filtering, and clicking to expand and read an entire review — spiked 89% higher at the start of the pandemic, but has since stabilized, with growth still strong at 50% over pre-pandemic levels.
Meanwhile, the top five factors that improve shopper confidence online all revolve around reviews, according to the Bazaarvoice Shopper Experience Index. These include, in order, the average star rating; the number of reviews; details in reviews that resonate with shoppers’ needs; how recently reviews were written; and the presence of lengthy, detailed reviews.
“The fact that we conduct research online makes it even more important, because we don’t touch and feel [the product], said Zarina Lam Stanford, Chief Marketing Officer at Bazaarvoice, which offers solutions around user-generated content, including reviews. “We read what other people have to say in the reviews or the commentary. The power of word of mouth is paramount.”
JanSport’s product samplings and video tutorials fuel winning customer review campaign
When backpack maker JanSport launched its new Adaptive Collection specially designed for individuals who are mobility challenged earlier this year, it leveraged customer reviews driven by product sampling in order to drive sales. The line included both the Adaptive Backpack and an Adaptive Cross-Body Bag, both of which included specific functionalities such as adjustable loops and anchor straps for securing the backpack to a wheelchair.
The company has long incorporated user-generated content into its marketing efforts, but this campaign called for feedback from a unique customer niche. Working with PowerReviews, JanSport said it wanted to make sure it got the product in front of the right audience.
In November 2022, the brand launched a sampling campaign — providing products to users and soliciting their reviews — and paired it with an online video tutorial, according to a PowerReviews case study.
The effort garnered a 90.2% review completion rate — above the industry average of 85% for such campaigns, according to PowerReviews — and a 4.7-star average rating.
As a result of the campaign’s success, JanSport said it was considering using similar product sampling for all of its new product launches.
Andrew Smith, Vice President of Marketing at PowerReviews, said product sampling is especially effective for new product launches, so that brands can gather reviews from a select group of consumers before the products actually become broadly available to the public. While the consumers who receive advance samples are not required to submit reviews, they generally feel compelled to do so, he said.
“Product sampling is a really good solution for new products,” said Smith. “It’s like the chicken or the egg scenario. What comes first? The reviews or the product? With product sampling, you kind of have the best of both worlds.”
MeUndies leverages reviews from customers and employees to earn consumer trust
Prompting customer reviews by offering incentives — known as inorganic reviews — is another strategy that brands are using to ensure they have a high volume of user-generated content.
MeUndies, which offered a subscription service in which customers receive new underwear each month, took several steps to bolster its product reviews when it introduced a total of 68 new items in 2021, after several years of minimal new-product launches.
The brand began using tools from Bazaarvoice to solicit customer reviews, and also added a “Write a Review” button on its website. It also launched multiple sweepstakes offering customers a chance to win in exchange for reviewing products in certain key categories.
In addition, MeUndies also started collecting reviews from staff members. The company labels its staff reviews with custom badges, so that shoppers can see that a staff member left the review. Customer reviews that were incentivized are also labeled with a special badge, as are reviews left by customers who actually bought the product, which verifies the authenticity of the review.
“Most of our customers read reviews before purchasing, and they expect our reviews to be extensive, cover every detail of the product, and to be recent,” the company said in a Bazaarvoice case study.
Reviews from employees are especially valuable, according to MeUndies, because customers have confidence that the reviewer is knowledgeable about all aspects of the product and service.
Since making the changes to the way it gathers reviews in 2021, MeUndies said it has recorded a 218% increase in approved reviews submitted through email.
Another aspect of MeUndies’ review process is its ability to respond to negative reviews. It works with Bazaarvoice to moderate its reviews and respond online to negative reviews. This gives the company not only an opportunity to provide a more positive experience for the customer, but it also allows other customers to see that the brand is seeking to provide good customer service.
Smith of PowerReviews said his company also moderates reviews to weed out profanity and other inappropriate activity, but he said negative reviews can actually help bolster the credibility of the review content overall.
“If the review is legitimately about the product and is negative, we are big believers that that should absolutely be displayed on the front page,” he said. “We've done a lot of research on this, and what we find is consumers get suspicious if everything is completely positive.”
People like to see a range of about 4.5 to 4.9 stars in a review he said, noting that having all five-star reviews is generally not perceived a genuine.
La Colombe taps analytics to weave key words from five-star reviews into marketing content
Brands are also getting better at incorporating review content into their marketing efforts. Coffee roaster and café operator La Colombe Coffee Roasters, for example, appreciates the positive reviews it receives so much that it has featured them as integral elements of its marketing.
When the company was planning a summer tour to promote its Draft Lattes, for example, it noticed that one reviewer said the mouthfeel was “like being on a cloud.” It designed the webpage for the campaign to feature the review, front and center, the company said in a PowerReviews case study.
The company also uses review content in paid ads and in email campaigns. Emails with content from reviews get more traction that emails that lack review content, La Colombe said.
La Colombe uses tools from PowerReviews to analyze five-star reviews and identify words that are used in multiple reviews so that it can key in on these terms that it knows will resonate with consumers, the company said.
The company has also used a sentiment analytics tool, which leverages natural language processing to read all reviews, and then assign a sentiment score to each product. It then compares these sentiments with those associated with competitors’ products.
Going forward, Smith of PowerReviews said he expects that reviews will become more personalized for individual consumers.
“In the future, brands may be displaying reviews based on certain algorithms around how a consumer has interacted with their site,” he said. “I haven’t really seen it happen yet, but if there’s 1,000 reviews, there’s no way a customer is going to read them all. Using automation to sort them in a way that’s going to resonate with the consumer is where I see the industry going and how I think reviews can become even more impactful than they are already.”
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Government Mandate Not the Solution for a Workforce Shortage
by Chris Berleth, President, Columbia Montour Chamber of Commerce
The "Patient Safety Act" stifles innovation and takes leadership decisions out of the hands of local experts.
Recently, the PA House of Representatives passed House Bill 106, the "Patient Safety Act", which mandates nursing ratios as a measure to address the nursing shortage and quality of care concerns. After conversations with local healthcare leaders, the Chamber is concerned about the impact of unintended consequences that such mandates pose for our communities.
Columbia and Montour Counties are fortunate to have some of the best healthcare resources in the world. Even so, the nationwide nursing shortage (The Bureau of Labor & Statistics Employment projects that nursing is one of the fastest-growing occupations and despite its 7% growth, will still be 1.1 million jobs short of avoiding a full-blown crisis) is exacerbated by the state of Pennsylvania's workforce woes and an aging population who need more healthcare resources. There's no denying that we need more nurses - but a government mandate forcing hospitals to comply with a nursing ratio does more harm than good - it's the equivalent of applying a band-aid to a wound that requires surgical precision. Worse yet, there's no evidence that such a mandate can meet its objectives in improving care - the only state with such a law is California, which passed it two decades ago, and the verdict is still out on whether it's worked.
Here in central Pennsylvania, local healthcare leaders tell us that across campuses in our region, there's a 37% nursing vacancy rate. This huge gap has prompted local leaders to double down on innovative new ways to care for patients and recruit and retain employees. In a recent public update, leadership at Geisinger has shared that some of the approaches that they've taken include the development of new care teams, leveraging the licenses and skillsets of existing staff, embracing new technologies that support nursing efficiencies, and the removal of barriers in the talent pipeline that lead to hiring bottlenecks. One such bottleneck being addressed is the relationship between local educational resources, which have responded whole-heartedly to addressing the issue, and have expanded programs (Luzerne County Community College) and accepted more students than ever (Commonwealth University- Bloomsburg) into nursing programs. They're doing what every business in Pennsylvania needs to do to succeed - assessing the situation on the ground, local leaders are assessing resources and making creative changes - and it's taking time, but it's working.
Many of these improvements are at risk with the final passage of the Patient Safety Act, which locks in an RN-exclusive model of patient care (which contrasts with piloted new care teams that rely on fewer nurses for work that need not necessarily be done by RNs). For an industry that relies heavily on the power of inspections, reviews, third-party assessments, and patient and employee feedback to determine success, the Chamber cannot support a bill that takes a step backward by removing flexible decision-making from the leadership who knows how to best care for patients. This is especially true when that bill also threatens to force those leaders into offering fewer beds and less access as an unintended consequence of compliance. Let's let local leaders lead, and let's foster a multipronged approach to come at this crisis from every angle, rather than a mandate that serves as a shortcut.
Last Week In the Legislature
Source: PA Chamber of Business and Industry
The Pennsylvania Senate returned to Harrisburg last week, extending its focus beyond state budget negotiations as the upper chamber kicked off the official start of the fall session. Having already sent budget-related fiscal code legislation back to the House of Representatives earlier this month, the state Senate reconvened to consider measures related to civil justice reform, data security, and youth social media use. The House will return to session tomorrow.
Here is a rundown of what happened last week in the legislature of relevance to the business community.
Clean Slate Expansion
The Senate Judiciary Committee met last Tuesday to consider House Bill 689. This bipartisan legislation would expand Pennsylvania’s Clean Slate law to provide for the automatic sealing of certain nonviolent drug-related felonies, given the individual in question has remained crime-free for a period of at least 10 years.
Pennsylvanians with old criminal records are often reluctant to join the workforce out of embarrassment or concern that their records will be used against them. The bill encourages employment among this population and has a minimal impact on employers who are already prohibited in most cases from considering criminal history when making employment decisions.
The PA Chamber supported this legislation (CLICK HERE for our memo), which was later amended to include expungements for individuals granted pardons and reported out of committee by a bipartisan 12-2 vote.
Social Media Access/Data Security
The Senate Communications and Technology Committee met last Tuesday morning to review Senate Bill 22. This legislation regulates access and data collection of minors on social media platforms, including provisions requiring parental consent and notification and allowing individuals to request deletion of information obtained as a minor.
The bill initially included a private cause of action and concurrent jurisdiction for local district attorneys, but the PA Chamber worked with our members and legislators on an amendment to remove these provisions. The amendment passed unanimously. As amended in committee, the Pennsylvania Attorney General now has exclusive jurisdiction to bring claims under the proposed legislation, a far preferable approach to enforcement.
Separately, the same committee also considered Senate Bill 824 during its meeting on Tuesday. This legislation updates the Breach of Personal Information Notification Act to require notice to the Pennsylvania Attorney General and provide for credit monitoring for individuals whose data was breached.
The bill was amended in committee to better define the data subject to credit reporting and monitoring as a combination of an individual’s first and last name with a social security number, bank account, driver’s license, or state ID number. The amendment also clarifies that a business may satisfy the credit monitoring requirement by providing notice of monitoring services that are available at no cost.
Both S.B. 22 and S.B. 824 were subsequently reported by the committee unanimously. The PA Chamber will continue to monitor these bills as they move forward.
Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.
Member News – September 27, 2023
The Exchange Calls for Entries
The Exchange calls for entries for their October 16th show "Food for Thought" and their annual "Cash & Carry" will celebrate 10 years this November. Learn more on how to enter your artwork.
Fromm Electric to Celebrate 100 years
Join Fromm Electric on September 28th from 11-1 pm at Fromm's Bloomsburg branch for an outdoor BBQ featuring a catered lunch and amazing giveaways from suppliers such as Milwaukee, Signify, and Eaton. The event is "rain or shine,". Find more details.
Steinbacher, Goodall & Yurchak Now Has Six Locations Throughout Northeast and Central Pennsylvania
Steinbacher, Goodall & Yurchak, an elder law firm with current locations in State College, Wilkes-Barre, Williamsport, Wyalusing and Wysox, Pa., is pleased to announce the opening of a new office, located at 1913 East Pleasant Valley Blvd. in Altoona. Learn more about this new location.
Bluegrass Grammy Winner Coming to Weis Center
The Weis Center for the Performing Arts will welcome bluegrass/roots band Molly Tuttle & Golden Highway on Friday, Sept. 29 at 7:30 p.m. at the Weis Center. Learn More.
Betsy Lockwood of SEDA-COG selected for Appalachian Leadership Institute Fellow
The fifth class of Appalachian Leadership Institute fellows were selected via a competitive application process. Elizabeth Lockwood, Director, Project Development/Grants, Economic Development Program, SEDA-Council of Governments (SEDA-COG), Lewisburg, was one of the 40 selected to participate. Learn more about the Appalachian Leadership Institute.
First Columbia Bank Photography back in 2023
McKonly & Asbury Hosting Cybersecurity Conference
McKonly & Asbury, along with co-hosts CYBIR and PrismWorks Technology, Inc. will hold a IT Risk Management & Cybersecurity Conference on October 3rd. Learn More and register here.
CSIU offers a Community Health Worker Training Program
Community Health Workers (CHWs) are trained public health professionals who know their community and have the heart for helping others and serving their community. Learn more about the program the CSIU is offering here.
Chamber members are hiring
Check out the Job listings page on the Chamber's website for the latest postings. Have a job you would like posted? Reach out to Brenda Flanagan at email@example.com.
PA CareerLink, Columbia Montour hosting Job Fair Oct. 5th
The 2023 Columbia-Montour Fall Job Fair will be held on Thursday, October 5th at the LCBC Church campus, 2421 Columbia Blvd., Bloomsburg, PA. The event will begin at 11:00 a.m. and close at 2:00 p.m. Businesses interested in attending can register here. Space is limited.
MARC posts an invitation to Bid for 2024 Lawn Care
Sealed bids for lawn care at the various properties managed by the Montour Area Recreation Commission (MARC) will be received by MARC at any time until 6:59pm on Monday, October 23, 2023. Get the invitation to bid packet here.
Non-Profit Leadership Series Happening October 4th.
Community Giving Foundation, in partnership with the United Way in our region, is excited to invite you to the next session of the 2023-2024 Nonprofit Leadership Series. The Nonprofit Leadership Series provides free professional development opportunities to nonprofit leaders on a variety of topics. Learn more.
Covered Bridge Festival happening October 5 - 8
The 41st Annual Covered Bridge & Arts Festival will have something for everyone! The Festival is one of the largest craft festivals on the East Coast, and four-day annual attendance is typically near 150,000 visitors. Learn more.
Bloomsburg Theatre Ensembles Improv Nights return this fall
Bloomsburg’s premier improvisational comedy troupe will entertain audiences with hilarious games, ridiculous scenes, and other feats of unscripted comedy. This long-awaited returning program is perfect for fans of “Whose Line Is It Anyway” and Second City. Learn more.
Bloomsburg Children's Museum October Events
Two special events are happening at the Bloomsburg Children's Museum in October. Mom & Son Dinosaur Brunch and Harry Potter Day. Learn more.
Apollo Point Hosting Dogtoberfest
October 13 - October 15 the first ever Dogtoberfest benefit will be held at Apollo Point. Learn more!
NEPIRC Manufacturing Day: October 13
Join NEPIRC on Friday, October 13th to celebrate the many contributions of our region’s manufacturing industry! At Manufacturing Day, you’ll be able to see product demonstrations; learn more about the cool products made right here in our local communities, and more!
Affordable Care Act Refresher - Employer Responsibilities Webinar to be held in October
Join the My Benefit Advisor compliance team for a review of ACA rules and regulations as well as best practices. They will provide key information for our broker partners to share with their Applicable Large Employers (ALEs), employers close to the 50-life threshold, and level/self-funded groups under 50. Click here to register.
Thrivent hosting fellow Chamber Member Cardinal Estate Planning for a workshop
Join Thrivent Financial and Cardinal Estate Planning for an informational estate planning workshop focused on estate planning on October 26th. Learn more about this workshop.
Bloomsburg YMCA looking for Trunks
Bloomsburg YMCA is searching for families, businesses, and organizations to participate in Trunk or Treat! See more details.
Celebration Villa Hosting Fall Festival
October 25th Celebration Villa of Berwick will be hosting a Fall Festival. This event is open to the public! There will be several activities to do such as: pumpkin painting, spooky cookie decorating, a walk through the haunted courtyard, trick or treating, and more!
Luzerne County Community College hosting Fall Career Fair
LCCC will be hosting a fall Trades & Technology Career Fair in November and is looking for businesses to participate. Learn more and register today!
Unleash the Potential of New Managers with Leadership Development
- New leaders must be willing to learn, develop communication skills, and adjust relationships.
- Transparent information sharing establishes trust and repeats important messages.
- Listening is a key communication skill and should be prioritized.
- Treat everyone equally and objectively when making tough decisions.
- Be respectful of team members' perspectives and strive for self-improvement.
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Making the transition from being one of the team to being the boss can be a challenge, and many managers are not sure where to start. As your business grows, it’s normal for some leaders to feel stretched outside their comfort zone. But you don’t want to leave them there. Help new leaders find success, retain your best employees, and develop a positive workplace culture when you emphasize and train around key leadership traits.
A Willingness to Learn
Often new leaders get promoted because they excel technically in their field. However, as managers, the focus shifts from personal performance to team performance. And this change requires leaders to learn the roles of everyone on the team and how they all fit together. New leaders who think they already know everything miss a vital learning opportunity. According to Harvard Business Review, “Managers often fail in their new role, at least initially, because they come to it with misconceptions or myths about what it means to be a boss.” Employees will have more respect for managers who approach them both as a learner and a leader.
Boost Your Communication Skills
A good boss needs to have communication skills that go beyond those of their team members. Clearly delivering ideas and instructions requires written and oral communication skills that may be beyond new managers incoming skill level. It may surprise some leaders that one of their most important communication skills is actually listening so that employees feel heard. Insight Global, an international staffing firm, recommends prioritizing listening, along with these communication essentials:
- Be transparent and establish trust by sharing information on time, with clear expectations.
- Repeat messages that are important to ensure understanding.
- Set clear calls to action with instructions on what, when, and why tasks need to be done.
- Make yourself available for collaboration and ideas.
- Think about the future when communicating to have mutually beneficial conversations.
Review Your Relationships
As employees become leaders, it’s natural for their professional relationships to change. Projecting authority can be challenging when managers have friendly and relaxed relationships with team members. The transition requires some delicacy, and new leaders certainly want to avoid coming on too strong to establish authority. One group of researchers set out to discover the best ways to manage people who are also friends. After surveying 200 male and 200 female first-time managers across 17 countries, they identified these best practices.
- Acknowledge the power shift in relationships sooner rather than later.
- Be honest and open with friends who become direct reports.
- Ensure fairness by treating everyone equally, extending invitations for lunch, etc.
- Don't let emotions get in the way when making tough decisions; use objective data to treat everyone fairly.
- Manage how much information is shared on social media to maintain credibility and respect boundaries.
The Bottom Line
Becoming a successful boss and leader takes practice, but new leaders can develop these skills with the right expectations. Communication, listening, and creating a positive workplace are all important considerations for a new leader. Good leadership always begins with respect for your team members’ perspectives, values, and needs. By taking these principles into account each day and striving towards self-improvement, new leaders will find their hard work and dedication rewarded.
The Columbia Montour Chamber of Commerce is a private non-profit organization that aims to support the growth and development of local businesses and our regional economy. We strive to create content that not only educates but also fosters a sense of connection and collaboration among our readers.
Join us as we explore topics such as economic development, networking opportunities, upcoming events, and success stories from our vibrant community. Our resources provide insights, advice, and news that are relevant to business owners, entrepreneurs, and community members alike.
New Member Highlight – NEPA Vascular Institute
With over 35 years of combined expertise, NEPA Vascular Institute at 1918 W. Front St. in Berwick, offers a wide range of services focused on venous and arterial disease. Recently they added two hyperbaric oxygen therapy chambers to help in the healing process of many types of wounds. This care will enhance the lives of many individuals living with chronic wounds withing Columbia and Montour Counties.
Decommissioning of Telefile Hurts Small Business
Author: Chris Berleth, President, Columbia Montour Chamber of Commerce
As the Chamber remains laser-focused on our five focus areas, we've had the wonderful opportunity to travel across the Chamber's two-county service area to meet with members of all kinds. In the first quarter, we heard overwhelmingly how important the Chamber's continued focus on advocacy is, and that members view the Chamber as a resource for issues that impact the entire business community. We're excited to meet this need, and recently, one surprising issue that has reached our ears is concern over the decommissioning of the telefile tax filing services at the end of 2023 by the PA Department of Revenue.
If you're unfamiliar with tele-file, it's a service of the Department of Revenue designed to make it easier for taxpayers and tax professionals to file taxes over the phone. Now, the department is asking all taxpayers to transition to myPATH, the department’s online filing system available at mypath.pa.gov. On the surface, this seems like a streamlining process designed to cut costs and make the government more efficient. The problem is, we're not ready.
While we ache for efficiencies and ease of services from the Commonwealth, and applaud such measures as Governor Shapiro's development of the Office of Transformation & Opportunity, which exists to solve problems and address bottlenecks that impact the business communities' interaction with the Commonwealth, provide for a coordinated effort to develop the Commonwealth's economic development and innovation strategy, the elimination of tele-file services is a step backward in the short-term.
The infrastructure does not yet exist in rural communities for all businesses - including and especially home-based, small businesses, and family farms - to make use of high-speed, broadband internet. That won't happen until we meet the Governor's goals for "broadband for all", and see the expansion of internet access and affordability across our region. Most alarming to us though is the short-sightedness of the proposed answer to those tax filers who are concerned about the decommissioning coming too early. The response from the state has been, "Well, if you don't have internet, you'll just have to go to the local library to file online."
There's nobody that we're more happy to promote than our local libraries, but solutions like these are not solutions at all, and we should be making it easier, not more difficult, for businesses to file. We shouldn't be adding barriers to the process such as library business hours, or transportation.
To this end, and based on the concern we've heard from businesses and members, like the Columbia County Farm Bureau, we're hoping that Governor Shapiro will see an easy solution: let's align the goals of the Governor's PA Broadband Redevelopment Authority and the billions of dollars invested therein which will see soon translate to near-universal broadband in Pennsylvania, with the decommissioning of tools like telefile.
Let's not make it harder to do business in Pennsylvania.
To this end, the Board of Directors of the Columbia Montour Chamber of Commerce endorsed this letter to Governor Shapiro this morning.
The Implications of a Government Shutdown on Business, the Economy
Source: U.S. Chamber of Commerce
Author: Neil Bradley, EVP, Policy, US Chamber of Commerce
As the odds of a federal government shutdown increase, businesses should be ready. In the below memo to members, U.S. Chamber of Commerce Executive Vice President Neil Bradley provides details about the possible length of a shutdown and the implications for the business community and the economy.
Why it matters: If a shutdown happens, “it is likely to be significant in duration with no clear path for reopening the government,” Bradley explains.
Americans, businesses, and communities will be impacted, as recent shutdowns show:
- National park closures meant lost tourism revenue to local communities, hurting small businesses.
- Federal permits were delayed, stopping energy producers, brewers, and crab fishermen from working.
- Employees of federal contractors were furloughed with many fearing they would not be reimbursed for lost pay.
Looking ahead: Should a shutdown happen, it would likely come to an end when one side relents to public pressure and realizes that a shutdown is a flawed legislative strategy.
Bottom line: A functioning economy requires a functioning government. Congress should continue working to avoid a shutdown.
MEMO to US CHAMBER MEMBERS
Despite the fact that the Biden Administration and Congressional leaders from both parties in the House and Senate want to avoid a government shutdown, there is a substantial consensus that a shutdown will occur at the beginning of the fiscal year on Oct. 1. If a government shutdown does occur, it is likely to be significant in duration with no clear path for reopening the government.
Background on Shutdowns
A government shutdown at the beginning of the fiscal year would mark the fourth shutdown in a decade and the sixth since 1995. In each case, the government was shuttered because a portion of the Congress (always on a partisan basis) refused to support legislation to keep the government open absent some change in spending or policy. In other words, some group of policymakers leverage the “must-pass” legislation to keep the government open to secure their own priorities. While members of both parties have attempted to leverage the necessity of an open and operating government, no one has successfully used a shutdown to change policy in at least the last 25 years.
Each of the previous shutdowns came to an end when the leveraging party relented and supported / allowed for the passage of a bill to reopen the government. This is usually the result of a combination of public pressure and a realization that shutting down the government as a means of leverage is a flawed legislative strategy, and ultimately bad for the American people.
The last government shutdown, from December 2018 to January 2019, was 35 days in length, two-thirds longer than the previous record of 21 days in 1995/96.
It is difficult to predict how long any shutdown would last because the conclusion of the shutdown is largely dependent on when the leveraging party feels the need / ability to support or allow for a reopening of the government.
The history of government shutdowns since 1995 shows a decreasing willingness on the part of the leveraging party to agree to reopen the government. This is important because the best way out of a shutdown is to demonstrate that those wanting to keep the government closed are a small minority within their own party.
As illustrated in the table below, in 1995 and 1996, the votes to reopen the government enjoyed near unanimous support from both parties. Beginning in 2013, the leveraging party, especially in the House, has shown an increasing willingness to oppose reopening:
- In 2013, House Republicans opposed reopening 144 to 87;
- In 2018, House Democrats opposed reopening 144 to 45; and
- In 2019, House Republicans opposed reopening 183 to 6.
At the moment, there is no clear path to reopening the government should a shutdown occur. This is due to the following reasons: the very tight margins in the House, the likely difficulty in securing a majority of the majority to reopen the government, and the threats by supporters of a shutdown to utilize a motion to vacate to attempt to throw the House into chaos.
On the other hand, the increasing need for disaster aid funding combined with the normal build-up of pressure during a shutdown could bring it to a quick end, but those pressures are likely to only change marginally from the conditions present at the outset.
Bottom line: In the current environment, as hard as it may be to avoid a shutdown, it would be even harder to get out of it. This points to an extended shutdown.
Modern Shutdown History
Implications for the Business Community and the Economy
Economists often assert that the macroeconomic impact of a government shutdown is relatively mild. This conclusion is largely based on viewing the economic impact solely through the lens of federal spending in the economy. During a shutdown mandatory spending continues and, while discretionary spending halts, when the government reopens federal employees and agencies are made whole meaning total federal spending is unchanged.
This approach fundamentally misses the microeconomic impacts for the private sector and Americans and communities across the country. Individuals and businesses rely on the discretionary functions of government on a daily basis. From passports and permits to clinical trials and contractors, a well-functioning economy requires a functioning government.
In a 2018 report, the non-partisan Congressional Research Service detailed some of the impacts of past government shutdowns:
- Health. New patients were not accepted into clinical research at the National Institutes of Health (NIH) clinical center; the Centers for Disease Control and Prevention ceased disease surveillance; and hotline calls to NIH concerning diseases were not answered.
- Law Enforcement and Public Safety. Delays occurred in the processing of alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol, Tobacco, and Firearms; work on more than 3,500 bankruptcy cases were suspended; recruitment and testing of federal law enforcement officials were cancelled, including the hiring of 400 border patrol agents; and delinquent child-support cases were delayed.
- Parks, Museums, and Monuments. Closure of 368 National Park Service sites (loss of 7 million visitors) occurred, with loss of tourism revenues to local communities; and closure of national museums and monuments (reportedly with an estimated loss of 2 million visitors) occurred.
- Visas and Passports. Approximately 20,000-30,000 applications by foreigners for visas went unprocessed each day; 200,000 U.S. applications for passports went unprocessed; and U.S. tourist industries and airlines reportedly sustained millions of dollars in losses.
- American Veterans. Multiple services were curtailed, ranging from health and welfare to finance and travel.
- Federal Contractors. Of $18 billion in Washington, DC, area contracts, $3.7 billion (over 20%) were affected adversely by the funding lapse; the National Institute of Standards and Technology (NIST) was unable to issue a new standard for lights and lamps that was scheduled to be effective January 1, 1996, resulting in delayed product delivery and lost sales; and employees of federal contractors were furloughed without pay.
Even the relatively brief 16-day shutdown in 2013 had significant negative impacts on business operations and the economy as detailed in a 2013 report by the Office of Management and Budget:
- The Bureau of Land Management (BLM) was unable to process about 200 Applications for Permit to Drill, delaying energy development on Federal lands in North Dakota, Wyoming, Utah, and other states.
- The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau was unable to issue export certificates for beer, wine, and distilled spirits, more than two million liters of U.S. products were left sitting at ports unable to ship.
- Banks and other lenders could not access government income and Social Security Number verification services. Two weeks into the shutdown, the Internal Revenue Service (IRS) had an inventory of 1.2 million verification requests that could not be processed, potentially delaying approval of mortgages and other loans.
- The Small Business Administration (SBA) was unable to process about 700 applications for $140 million in small business loans, and the Federal Housing Administration (FHA) was unable to process over 500 applications for loans to develop, rehabilitate, or refinance around 80,000 multifamily rental units.
At a U.S. Chamber of Commerce Foundation event during the last shutdown in 2018, the Foundation highlighted some of the real-life consequences:
- Riverview Hotel, a small family-owned business with a history dating back to 1920, relied on a park-service-operated ferry to transport guests to the island. This ferry service came to a halt during the government shutdown, resulting in substantial income losses totaling tens of thousands of dollars and causing permanent employee layoffs. This hotel also had been counting on a small business loan to aid in its recovery from a recent hurricane. The pause in loan approvals and disbursement, coupled with subsequent backlog issues at the Small Business Administration, triggered financial instability for numerous businesses facing similar circumstances.
- Information Technology Coalition, Inc., a government contractor supporting agencies like NASA, DOT, and DOJ, had to furlough nearly 60% of their workforce spanning 25 states. Employees depleted their vacation and sick leave and endured weeks without pay, which was never reimbursed by the government. This situation also poses a threat to our national security as critical agencies operate with reduced staffing levels.
- Even routine tasks such as obtaining permits for new beer labels or new boats were left unanswered for weeks, as exemplified by the experiences of FV Holdings LLC and TapRM. These delays resulted in significant financial losses, amounting to thousands of dollars.
Each of these business stories mirrors the struggles faced by businesses across the country – struggles that would resurface if the government were to shut down again.
Please call us if you wish to discuss this further or if we can be of any assistance as you navigate the impacts of a potential shutdown on your business. Thank you.
As a member of the U.S. Chamber of Commerce, the Columbia Montour Chamber funnels timely and critical information and resources on federal policy and national trends in small business growth to its members, including articles like these.
The Foundation of the Columbia Montour Chamber of Commerce Invests in Local Students’ Futures
Earlier this month, The Foundation for Free Enterprise Education (FFEE) recognized the Foundation of the Columbia Montour Chamber of Commerce for 25 years of investment in students from Columbia and Montour Counties through Pennsylvania Free Enterprise Week (PFEW), an award-winning youth leadership and career development program focused on helping high school students understand and celebrate modern business and develop critical employability skills.
The partnership between the two Foundations is made possible through the Department of Community and Economic Development’s Educational Improvement Tax Credit program (EITC). In this program, approved businesses direct tax-deductible contributions to support local students through Educational Improvement Organizations such as FFEE and the Foundation of the Columbia Montour Chamber of Commerce. Over the past quarter century, the Chamber Foundation has allocated over $82,000 in sponsorships so 182 local students could attend PFEW.
With over 50,000 graduates from across the Commonwealth, Pennsylvania Free Enterprise Week typically serves over 1,600 students a year, and in 2023, 1,640 students took the PFEW journey, including 26 from Central Columbia SHS and one from Columbia-Montour AVTS. The students have all expressed what a great experience PFEW has been for them.
“During the week, I gained skills in confidence, trust, leadership, accountability, and honesty in the work environment. I expanded my skills in teamwork, debate, speech, time management and of course, business management.” – Adam Gross, Central Columbia SHS
The student experience is as follows: PFEW participants are grouped into teams of 16 students and one volunteer Company Advisor who run a manufacturing firm for a simulated three-year period. Making the same decisions modern business owners make and competing against other student companies, they are responsible for two judged oral presentations - a simulated stockholders annual meeting where they must present two-year comparative financial statements and results of their operations, and a marketing presentation where they define their target audience and present a wide variety of advertising collateral. Throughout the week, world-class business and motivational speakers address the students on a wide variety of topics geared toward their professional and personal development. This type of education enhances a student’s school experience, and is a vital component of preparing our young people for successful lives and careers.
Regular contributors to the Foundation of the Columbia Montour Chamber of Commerce’s Pennsylvania Free Enterprise Week scholarships include First Columbia Bank and Trust, First Keystone Community Bank, and PPL.
The Foundation for Free Enterprise Education is so very grateful to the Foundation of the Columbia Montour Chamber of Commerce for providing this powerful educational experience to local students. For more information about all FFEE programs, volunteer opportunities, or how you can help, please contact Foundation for Free Enterprise Education VP of Marketing & Development Scott Lee at (814) 833-9576 ext. 8 or firstname.lastname@example.org. More information can be found on the PFEW website, www.pfew.org.
For more information on the important work of the Foundation of the Colombia Montour Chamber of Commerce, visit https://www.columbiamontourchamber.com/foundation/.