As prepared for delivery
Welcome, ladies and gentlemen.
For those of you who have been to this event before, you may have come expecting lists—lists of economic indicators, lists of accomplishments and priorities, and checklists for the coming year. And believe me, the Chamber has lists! But you’re not going to hear them today.
Because at the outset of this momentous year—2020—the State of American Business is better told in broader strokes, bigger ideas, and real stories of women and men who are leading, growing, and innovating in a unique period of challenge, opportunity, and, yes, uncertainty.
We’ve asked some of them to join us today ... because they are the ones who are out there driving the economy while also dealing with many of the 300 issues that the U.S. Chamber works on every day.
When the Chamber advocates for smart policies and new approaches to address workforce challenges, we’re advocating for John Phillips and the Kentucky-based company he leads, AE Electrical Solutions. He and his company are on the front lines of a worker shortage crisis—and they are confronting it with smart solutions.
When the Chamber fights back against trade uncertainty, we’re fighting for Seth Weiner and the Maryland-based business he founded and runs, Sonic Promos. Like a full third of American businesses, Seth has had to adapt operations to withstand the impact of tariffs.
And when the Chamber promotes and defends free enterprise, we’re defending the system that allowed Charlotte Lee—an immigrant and entrepreneur—to achieve her American Dream. The Virginia-based software company she built from the ground up and the team of people she employs are testaments to what free enterprise makes possible.
Later in the program, they will join a panel discussion with the Chamber’s president, Suzanne Clark, with legendary American entrepreneur Steve Case, and Jacob Hsu, whose company was seeded by Steve’s investment firm, Revolution.
For these leaders, and the 32.6 million other businesses who help power our economy—the State of American Business is uncertain, but positive, growing, and hopeful.
The recession that many feared was looming in 2019 never showed up. And by many measures—unemployment, wages, and the stock market to name just three—the economy is the strongest it has been in years.
But many questions remain at the start of this new decade.
Today, we are at a crossroads, economically, politically, and globally. The debates and the decisions confronting the American business community this year have far-reaching consequences.
We are not merely asking ourselves, what will the economy look like this year or next.
Today, we are asking ... what kind of economy do we want to drive this nation forward?
What challenges across the country beg for our attention?
What is our place in the global economy—are we going to step up, stand still, or pull back?
What kind of future do we want for our children, and theirs?
What is the role of business—and government—in securing that future ... and are we up to the task?
And many are simply wondering this—what can actually get done in a year like 2020?
The short answer is, a lot. A great deal can be accomplished—in the states, in the global arena, in the public debate, and yes, even in Washington. Why? Because it must. We are at a pivotal moment that calls for strong leadership, smart decision-making, and meaningful action.
A Year of Inaction?
Washington is one of the biggest question marks.
In some respects, 2020 will be a year of frantic activity. The high drama of impeachment continues to unfold, and once that gets resolved, we can get back to politics, politics, politics.
If conventional wisdom holds, during this election year it will be difficult to make strides on just about anything else, such as:
The infrastructure deal we desperately need to modernize the physical platform of this economy; The reforms to our immigration system to ensure businesses have the workers they need; Or the 35 bipartisan bills that can help address climate change through innovation and investment.
Does it sound like we can afford to take the year off? Of course not! Inaction is not an option.
So let’s flip the conventional wisdom that nothing gets done in an election year. It’s because it’s an election year that folks will want and need to be productive.
Sound like a pipe dream? Well, just look at what happened at the end of last year, when nothing was supposed to get done. While the drama and the divisions in Washington captured the headlines, Congress was busy making bipartisan progress on a number of significant business priorities.
After the long-slog process of getting the U.S.-Mexico-Canada Agreement through eight rounds of negotiations, and through the Democrat-controlled House, it is now poised for passage in the Republican-controlled Senate.
Congress also passed and the president signed into law:
A permanent, full repeal of the Cadillac Tax, the Health Insurance Tax, and the Medical Device Tax; A seven-year extension to the U.S. Export-Import Bank; New retirement options for small businesses and renewal of critical insurance programs to cover flood and terrorism risks.
I could go on, but I promised no lists.
This tells us there are lawmakers on both sides of the aisle who are committed to doing the nation’s business. At this event last year, we helped lay the groundwork by unveiling our new Congressional Scorecard and calling for bipartisan compromise and legislative leadership—good, old-fashioned governing.
We’re continuing those efforts this year, and we’re off to a strong start. This morning we hosted a dozen Democratic and Republican lawmakers to talk about all the things we want to do together in 2020. These members from the Problem Solvers Caucus are not nearly as pessimistic as the talking heads on cable TV and talk radio.
We need to encourage and support lawmakers who are committed to getting things done and help grow their ranks—on Capitol Hill and in the upcoming elections.
So, no, it’s not going to be a year of inaction. We don’t buy the excuse that nothing can get done in an election year.
We also know that Washington isn’t the sole source of uncertainty. It isn’t the only place that creates challenges or presents opportunities. Just ask the folks who are joining us from watch parties across America, including in Arkansas, Tennessee, Virginia, Montana, and New York. Ask our friends and partners who are tuning in from Mexico and Canada, as well as London and Brussels.
We’re proud to have them here with us today, because the U.S. Chamber isn’t just a Washington organization. We are a national organization, representing the interests of members in every corner of the country through our federation of state and local chamber partners.
We are an international organization, advocating for U.S. businesses globally with our network of 127 American Chambers of Commerce in 117 countries and through our 20 bilateral business councils.
This nationwide and global reach is more important than ever, because many of the big questions, begging meaningful action, will be coming at us from the states, from abroad, and in the debate over the future of our economy and the role of business.
Engaging in the States
Meaningful action this year requires us to pay careful attention to activity at the state level—both in politics and policy.
Some of the shift in action is a result of the federal government failing to set clear guidelines on issues that are best defined through a nationwide standard or policy.
For example, Washington’s inability to make progress on data privacy is resulting in a patchwork of state rules and regulations that will stifle the free flow of goods and services across state borders. Can you imagine effectively running a company when you have 50 different sets of standards to comply with? This would create conflict for businesses, confusion for consumers, and increase costs for everyone.
Look no further than California’s Consumer Privacy Act, which took effect last week. The initial price tag of compliance is $55 billion in California alone, and small businesses will face up-front costs of $50,000 each.
Here’s another big challenge we’re facing in the states: Lawmakers are thumbing their noses at federal laws and regulations they don’t like, such as net neutrality or fiduciary rules for investment advisors.
In another prominent example, some states are abandoning long-standing definitions of who should be considered an independent contractor. Under such proposals, Lyft and Uber drivers would be deemed employees and not independent contractors. The result? The business model that has revolutionized entire sectors of the economy will screech to a halt.
The same is true for the innovation we are seeing in everything from home repair tasks to grocery delivery. At stake is the flexibility and independence that have made “side gigs” or second jobs an important part of how millions of Americans support themselves and their families.
Last week, one of the most aggressive proposals threatening independent contractors went into effect in—you guessed it— California. It is already creating confusion and uncertainty for businesses and workers.
Today, the Chamber is releasing a new report on how aggressive new state regulations of the gig economy will suppress business opportunities and limit consumer choice and services.
Unfortunately, the impact extends far beyond the gig economy. These regulations affect everything from trucking and construction, to information technology and insurance, and even newspaper reporting—with potentially huge effects on our national economy. Clearly, there is more at stake here than just a couple of states adopting bad laws.
This is a national fight, and the Chamber will bring the full weight of our resources and federation of state and local chambers to reform or defeat these proposals.
There’s more trouble brewing in the states—a new generation of class action lawyers is driving an unprecedented wave of lawsuit abuse. Despite previous reforms at the federal level, class action lawsuits have tripled over the past decade. At the encouragement of the class action trial bar, thousands of municipalities are now suing under questionable contingency arrangements.
Most troubling, the public nuisance doctrine has become an effective tool for plaintiff’s lawyers because it makes it easier for them to sue, denies businesses due process rights, and creates sweeping new liabilities for companies—while at the same time harming consumers and costing jobs.
This Pandora’s Box of litigation could put entire industries in the crosshairs of the class action trial bar. For example, automakers and cell phone makers alike could be held responsible for distracted driving incidents.
The Chamber’s Institute for Legal Reform and Litigation Center are fighting back on multiple fronts, including through local partnerships, advocacy, and aggressive political engagement at the state level.
I’ll mention one more urgent priority in states all over the country—addressing a growing skills gap and worker shortages.
According to the Chamber’s new Worker Availability Ratio Index, there are now fewer available workers than open jobs across America—the tightest labor market in decades. We’ve identified 10 states, where every individual who wants to work could find a job tomorrow—and still, more than a quarter of the jobs would remain unfilled. This is just one reason we will be pushing hard for real immigration reform, so businesses can find the workers they need, when and where they need them.
We are also driving solutions at the state and local level to ensure that workers have the right skills for available jobs. One solution is Talent Pipeline Management, or TPM. This employer-led initiative, created by the Chamber Foundation, uses best practices from supply chain management to build partnerships between business and educational institutions. Companies in 29 states are effectively using this approach to ensure they have steady access to skilled workers.
Earlier, I introduced John Phillips, who saw that a lack of qualified electricians was severely limiting the growth of his business. Through our friends at the Kentucky Chamber, he learned about TPM, and began using its principles to partner with local high schools, train young people in skilled trades through apprenticeships, and create a pipeline of talent.
Businesses like John’s aren’t waiting for someone else to solve the problem—they’re leading the charge and getting the job done.
We have a full slate of challenges and opportunities before us in the states that beg our collective attention, leadership, and engagement this year and beyond.
Leading in the World
Meaningful action this year requires us to look even farther out—because the global picture has significant bearing for business.
Engaging with the world is our best strategy for strong national security and lasting prosperity. Even in countries and regions where tensions are rising, the private sector is a stabilizing agent—and business leaders are effective ambassadors for global cooperation.
The United States must retain its role as a champion for free trade, which is a proxy for productive relationships on many fronts. Embracing free trade doesn’t mean ignoring unfair practices aimed at us. It means leading the way in setting the rules and enforcing them, based on the simple propositions that more trade is better than less trade, more customers are better than fewer customers, and expanding markets globally will benefit everyone.
So let’s open more markets for American-made goods and services and create more opportunities for American businesses to grow—remember, 95% of the world’s customers live beyond our shores!
The imminent passage of the U.S.-Mexico-Canada Agreement creates new momentum for the kinds of high-standard trade agreements that will keep us on the leading edge.
We need new negotiated agreements with the UK and EU, Japan, Brazil, and burgeoning markets in Africa. And we must find a way to keep and expand our footing in the booming Asia-Pacific.
Likewise, we need to tear down barriers to trade, and limit the use of tariffs. Let’s not forget, American businesses and consumers pay the tariffs.
Earlier I mentioned Seth Weiner. His company depends on the availability of low-cost imports to survive. Trade tensions with China have forced businesses like his to adapt their business strategies and modify supply chains. They must be quick, nimble, and creative to keep costs down, products flowing, and people employed.
The Chamber has been a strong proponent for progress toward a comprehensive trade deal with China. Both countries deserve credit for reaching a Phase I agreement, which President Trump will sign next week. This will begin to reduce harmful tariffs.
But there’s still a long way to go. Phase II must address Chinese trade and industrial policies that put American businesses at a competitive disadvantage. It is in both nations’ interests to resolve those issues and restore our commercial relationship.
Staying engaged in the world also means remaining committed to the multilateral organizations and trading arrangements that we helped build. If the World Trade Organization didn’t exist, we’d have to create it. Its rules protect American business from unfair treatment and protectionism. Safeguarding this institution and its dispute settlement system should be an urgent international priority. Let’s not shutter the WTO Appellate Body. Such drastic action doesn’t serve America’s interests.
America must be involved, not isolated.
We must set the pace, in an open and collaborative manner, for global engagement—not only in trade, but also in finance, investment, technology, intellectual property, environment, and the rule of law.
Defending Free Enterprise
Finally, meaningful action this year requires business to engage thoughtfully and vigorously in the intensifying debates over the future of our economy and the role of business in our society.
The debates about free enterprise are not merely academic. They are happening across the kitchen tables of hardworking Americans and in diners from Des Moines to Manchester. These debates are playing out on the campaign trail and seeping into the policy arena, with candidates for president calling for:
The federalization of some American businesses;
The elimination of private health insurance;
An outright ban on the energy production that has strengthened our national and economic security;
Major redistributions of wealth to pay for programs that would put the government in charge of more aspects of our lives;
Proposals to silence the voice of American business and limit its lobbying and political engagement.
You know I could go on, but I promised no lists!
The business community must not, and will not, stand on the sidelines of these debates.
While the Chamber never engages in presidential politics, we will praise or criticize proposals by presidential candidates from both parties. We will lead the opposition to the policies that undermine the job creators, that penalize the innovators, and that target the wealth creators and investors that allow Americans to provide for their families and plan for their futures.
Free enterprise has proven to be the greatest driver of opportunity and prosperity ever devised. Now, we’ve never said it’s a perfect system. And the Chamber is working with partners in business and government to address shortcomings so that more Americans can partake in the benefits of a growing economy. Even so, it remains the best system anyone has ever tried.
I don’t expect to make headlines when I say that in the ongoing debate over the future of our economy, the Chamber stands proudly and firmly on the side of free enterprise.
But I will say something that might be considered provocative in our current times.
If we want to create more wealth and opportunity for all Americans, the answer is morebusiness, not less. We need a wakeup call in this country that disincentivizing growth and disparaging corporations is no way to generate collective prosperity.
Those who like to beat up on big business seem to forget that we live in an integrated system. Many small businesses find their contracts with large companies. And many big businesses rely on smaller ones in their supply chains. Their fates are tied.
More businesses, of all types and sizes, are crucial to our economy.
So we should all be troubled that we have 20% fewer startups than we did three decades ago when we were a smaller country. We should all be worried that there are half as many public companies today as in 1996.
The more companies go public, the more investment opportunities become available to everyday Americans—and the better equipped we will be to address critical challenges like income inequality.
When public companies succeed, people’s pensions grow and their retirement accounts get bigger. By empowering workers to invest their hard-earned dollars in the stock market, they will be able to share in the growth of our economy and take charge of their financial futures.
Right now, the majority of workers are missing out.
When I hear politicians talk about this problem, it is all too often followed by a plan for more regulation. But that is exactly the wrong approach.
If we want more start-ups, then we need to make it easier to start a company. If we want more public companies, we need to make it easier to go public and allow more Americans on Main Street to grow their money on Wall Street.
And for our friends on the right and the left who want to break up companies they have deemed “too big,” there is a simple solution—and it’s not more government intervention. It’s more competition.
Let’s commit to reinvigorating the American innovation machine. Today, the Chamber is calling upon all leaders—across the public and private sectors—to set a national goal of getting the startup rate back up over 500,000 a year and pushing through 250 new IPOs a year.
None of the many ways business contributes to society are possible if companies aren’t being created, if they aren’t growing, and if morearen’t going public.
Let’s not forget what this is really about.
It’s about 157 million U.S. jobs—85% of which are generated by the private sector.
It’s about $9.3 trillion in annual salaries and wages and $1.7 trillion in health insurance, retirement, paid leave, and pensions.
It’s about $333 billion in investments in R&D leading to innovations in health care, energy, and technology.
It’s about the $1.3 trillion in tax revenues businesses pour into local, state, and federal government coffers to help pay for schools, roads and bridges, a robust military, and strong social safety net.
Most of all, it’s about people—like Charlotte Lee, who I introduced at the beginning.
In 1998, Charlotte’s parents left their native South Korea to pursue their American Dream. Right here, in the heart of our nation’s capital, they started a successful cookware business, and their kids helped them run it.
Many years later, when Charlotte graduated from college in a tough job market with few prospects for employment, she did exactly what her parents did all those years ago: she created her own opportunities by starting a business.
Today, her company is on the cutting-edge of software design, with clients that include the American Red Cross, National Geographic, and MasterCard.
It was the vibrant American culture of free enterprise that helped her and her parents get their companies off the ground—and create opportunities for others in the process.
Try as they might, critics of free enterprise can’t ignore the evidence: Business is a force for good in our society. That’s why the Chamber will continue to fight vigorously on behalf of businesses that are driving prosperity, creating jobs, and making our world a better place to live.
So, if anyone arrived here today believing that nothing much can be accomplished in an election year—and especially one like 2020—I hope I’ve convinced you otherwise. This can, must, and will be a year of significant action.
Like the 32.6 million small, medium, and large businesses across America, the U.S. Chamber of Commerce doesn’t focus on what can’t be done—we focus on what must be done. We’re about the art of the possible, and the imperative of leadership.
The states are moving. The world is moving. And you better believe, business is moving.
Ladies and gentlemen, the state of American business may be uncertain, but the spirit of American business is undaunted. It is resolute. It is determined. And it is relentlessly focused on leading into an important year, through a pivotal decade, and toward a future that remains as bright as ever.
Thank you very much.