Talk Business Roundtable: Economy On Hold, But Ready To Go

The latest Talk Business roundtable included three state business leaders who discussed the federal government shutdown, workforce challenges, health care reform, and current economic conditions.

Randy Zook, CEO of the Arkansas State Chamber of Commerce; Steve Cousins, VP for Lion Oil Co. and chairman of the Associated Industries of Arkansas; and Mike Callan, Arkansas Oklahoma Gas CEO and chairman of the state chamber joined Talk Business executive editor Roby Brock for a business roundtable discussion on Sunday night’s Fox 16 program.

The federal government shutdown, which took an estimated $24 billion out of the U.S. economy by some estimates, seemed to not phase the state’s business leadership, Zook suggested.

“We’ve seen this movie before. You know, at the 11th hour, we’re going to get a deal,” he said of the current resolution and next year’s debt and deficit debate resurrection.

“I think the most obvious impact is just the sense of frustration that’s been driven by the inability of our political leadership in Washington to get some smart things done,” Zook added. “People are sitting on go in this economy. We’ve got lots of built up demand. We’ve got capacity that’s underutilized. We’ve got jobs that are unfilled. We’ve got all this potential economic activity just waiting for decent fiscal policy out of the federal government and, if and when that happens, I’m optimistic that this economy is going to get back to something like the growth rate that we want in the economy to create the jobs that we want and need to get ourselves back to a healthier situation.”

Callan said for his business, the budget impasse and Washington, D.C. dysfunction is causing uncertainty.

“From our standpoint, it’s that you put things on hold,” Callan said. “You stay in that holding pattern until you can see a little bit of certainty or predictability out there. It’s very tough to make an investment, especially a substantial investment, if you don’t know what the outcome is and you don’t know what the return on that is going to be.”

Cousins said he suspects a showdown will re-emerge in Washington next year when federal lawmakers and the President face the same issues again.

“I think the pattern is going to repeat again in the future. But the political issues of the day are the big problem at first. And then now, after a few weeks of this, the big problem is that things are starting to fall apart for a lot of people and they just have to fix it. They don’t really have an option,” said Cousins.

The business roundtable also discussed health care reform, which has been a looming uncertainty for many businesses due to changes coming from the Affordable Care Act.

Callan said Arkansas Oklahoma Gas offers substantial, and costly, health care benefits, and he’s seeing rising costs.

“It is one of the more expensive benefits that we provide to the employees. We’ll spend anywhere from 9 to 11 thousand dollars per employee per year on healthcare,” he said. “We have seen some increase in cost. I don’t know if we can say the Affordable Care Act is driving that or if it’s just the marketplace at work. What we are seeing is that people are really appreciative of the health care benefits that they have because healthcare has risen so much in the public eye with the Affordable Care Act and the controversy around it.”

Cousins said Lion Oil has shifted some rising premium costs to its employees in recent years, but he sees the current changes as more problematic for smaller businesses, not firms his size.

“I don’t believe it’s a huge problem for companies like ours or like Mike’s that have always provided full medical coverage for all their employees. I think it’s a huge problem for small business,” he said. “I think the uncertainty is the biggest problem there. We haven’t seen a big impact. Now, I will say that over the last 5 to 10 years as medical premiums have increased, we have passed more of that on to our employees. So that’s been a burden, we’ve shared most of it as a corporation, but our employees have shared it too.”

Zook’s State Chamber membership is diverse with Fortune 500 companies and single-employee small businesses. He said the federal health care law’s impact really depends on who you talk to.

“It is so company-specific, it’s just amazing. I mean it’s very difficult to generalize about this,” Zook said. “As Steve mentioned, smaller businesses are more upset about it, especially those that have not been able to, or have not chosen to provide or have not had to provide medical insurance to employees in the past. Now that they are being required to, it makes people look really hard at their whole business model. And people are making rational, smart, business-based decisions and it’s the range of options that they’ve got is very broad and some are doing some of everything. So it’s almost impossible to generalize. I know I’m dodging the question there but that’s basically the answer.”

Other topics discussed during the roundtable included hiring, education, and workforce training.

You can watch their full interview in the video below.