Episode summary
Your Paycheck In 2027: Will You Get A Raise Or Get Laid Off? | Holly Wade
The David Lin Report
· · 40 min · Hosts: David Lin
Summary
Small businesses are still reporting a tight labor market, with inflation and worker availability the two biggest operating pressures in the NFIB survey. The guest said 20% of owners named inflation as their biggest issue, while 25% cited labor availability, and many firms are still having to raise compensation to retain talent rather than because they planned to. She said that gap between planned and actual wage increases has persisted for years and continues to squeeze margins.
The discussion also focused on uncertainty, which the guest said is pushing owners to wait on hiring and capital spending until they have more confidence about sales and policy. She said the index is a leading indicator because its 10 components are mostly forward-looking, but the current reading is only around its 52-year average even as specific industries feel more stress. Construction, manufacturing, and some services are struggling to find qualified applicants, especially for skilled trades like plumbers, electricians, HVAC, and auto repair.
On prices, the guest said higher fuel, tariff, and supply-chain costs are forcing small firms to pass through more expenses, though smaller retailers have less pricing power than big-box chains. She argued AI is being adopted more widely, but mainly as an augmenting tool for marketing, finance, and correspondence rather than a full replacement for workers. She also said taxes, regulation, and the midterm election remain important because they affect the time and cash owners can devote to growth.
Key takeaways
- The guest said 20% of small businesses cite inflation as their biggest problem, while 25% point to labor availability.
- The guest said far more owners are having to raise compensation than planned to, which is pressuring margins.
- The guest said hiring shortages are most acute in construction, manufacturing, and skilled trades such as plumbers, electricians, HVAC, and auto repair.
- The guest said small firms are passing through fuel, tariff, and supply-chain costs, but mom-and-pop retailers have less pricing power than larger competitors.
- The guest said AI is mostly augmenting operations now, not replacing employees, and is being used first in marketing, finance, and back-office tasks.
Notable quotes
“one in five, 20%, say that inflation's their biggest issue in operating their business”
“far more are having to increase compensation than are planning for it”
“they're really trying hard to retain town. That is one of their main objectives in this tight labor market”
“it's more augmenting their current operations versus replacing any of their employees”
How the episode opens
We ask a question, um, what's your single biggest challenge in operating your business? And one in five say that inflation's their biggest issue. And but a quarter of them are saying that labor availability says it's still a very tight labor market. Far more are having to increase compensation than are planning for it. Trying to make sure that they retain talent. It's a very competitive field out there for many of them.
This video is disseminated on behalf of Greenland Mines. When we talk about the US economy, we often focus on Wall Street and big corporations earnings. But small businesses actually account for roughly 44% of private sector GDP and employ more than 62 million Americans.
So, how are these businesses really doing? Will they be raising prices soon because of higher fuel costs? Will wages rise or fall next year?
And are businesses replacing staff with AI? The National Federation of Independent Business, or NFIB, has tracked small business sentiment for over 50 years. Their optimism index is widely followed by economists, hedge fund managers, analysts, even politicians and policy makers alike.
Joining us now is Holly Wade from NFIB. She's the executive director of research, and she's going to answer the most important questions on what small businesses are doing right now and what mainstream is telling us about the economy. Welcome to the show, Holly.
Good to see you.
Thank you for having me. Great to see you, too. — The NFIB optimism index is a really important indicator for economists and traders and investors. It's often used as a leading indicator for consumer sentiment, uh, consumer discretionary spending, and ultimately, um, what businesses are about to do when it comes to hiring, potentially firing, um, and capital allocation. Let's start by talking about the headline number that came in in September.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- small business warning signs
- business optimism decline
- wage growth vs layoffs
- hiring crisis
- ai replacing workers
Companies and tickers mentioned
- GRML
- Greenland Mines
Watch the episode
Watch “Your Paycheck In 2027: Will You Get A Raise Or Get Laid Off? | Holly Wade” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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