[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] JOBS! JOBS! JOBS! ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON INNOVATION, ENTREPRENEURSHIP, AND WORKFORCE DEVELOPMENT OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS FIRST SESSION __________ HEARING HELD JUNE 30, 2021 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 117-023 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 44-925 WASHINGTON : 2021 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman JARED GOLDEN, Maine JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota MARIE NEWMAN, Illinois CAROLYN BOURDEAUX, Georgia TROY CARTER, Louisiana JUDY CHU, California DWIGHT EVANS, Pennsylvania ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANDY KIM, New Jersey ANGIE CRAIG, Minnesota BLAINE LUETKEMEYER, Missouri, Ranking Member ROGER WILLIAMS, Texas JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania CLAUDIA TENNEY, New York ANDREW GARBARINO, New York YOUNG KIM, California BETH VAN DUYNE, Texas BYRON DONALDS, Florida MARIA SALAZAR, Florida SCOTT FITZGERALD, Wisconsin Melissa Jung, Majority Staff Director Ellen Harrington, Majority Deputy Staff Director David Planning, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Jason Crow.................................................. 1 Hon. Young Kim................................................... 3 WITNESSES Mr. John R. Dearie, President, Center for American Entrepreneurship, Great Falls, VA.............................. 5 Dr. J.D. LaRock, President and Chief Executive Officer, Network for Teaching Entrepreneurship, New York, NY.................... 7 Ms. Denyse Airheart, Business Pathways Director, Mi Casa Resource Center, Denver, CO............................................. 8 Mr. Craig Etkin, President and Chief Executive Officer, Intelligence360, Sugar Land, TX................................ 10 APPENDIX Prepared Statements: Mr. John R. Dearie, President, Center for American Entrepreneurship, Great Falls, VA.......................... 26 Dr. J.D. LaRock, President and Chief Executive Officer, Network for Teaching Entrepreneurship, New York, NY........ 63 Ms. Denyse Airheart, Business Pathways Director, Mi Casa Resource Center, Denver, CO................................ 69 Mr. Craig Etkin, President and Chief Executive Officer, Intelligence360, Sugar Land, TX............................ 70 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Job Creators Network (JCN)................................... 71 Statement of Lamell McMorris................................. 73 JOBS! JOBS! JOBS! ---------- WEDNESDAY, JUNE 30, 2021 House of Representatives, Committee on Small Business, Subcommittee on Innovation, Entrepreneurship, and Workforce Development, Washington, DC. The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 2360, Rayburn House Office Building and via Zoom, Hon. Jason Crow [chairman of the Subcommittee] presiding. Present: Representatives Crow, Davids, Phillips, Newman, Bourdeaux, Houlahan, Garbarino, and Young Kim. Chairman CROW. Without objection, the Chair is authorized to declare a recess at any time. Let me begin by saying that standing House and Committee rules and practice will continue to apply during hybrid proceedings. All members are reminded they are expected to adhere to these standing rules, including decorum. House regulations require members to be visible through a video connection throughout the proceeding, so please keep your cameras on. Also, please remember to remain muted until you are recognized to minimize background noise. If you have to participate in another proceeding, please exit this one and log back in later. In the event a member encounters technical issues that prevent them from being recognized for their questioning, I will move to the next available member of the same party and I will recognize that member at the next appropriate time slot provided they have returned to the proceeding. For those members and staff physically present in the Committee room today we will continue to follow the most recent OAP guidance. Masks are no longer required in our meeting space for members and staff who have been fully vaccinated. All members and staff who have not been fully vaccinated are still required to wear masks and socially distance. I sincerely hope we do all of our parts to protect each other and our staff. The COVID-19 pandemic inflicted a once in a lifetime economic shock on our Nation. The small businesses that make up the foundation of our economy were particular hard hit. Despite government efforts, nearly 200,000 business that closed their doors during the pandemic may never open. These enterprises were more than just storefronts, they were entrepreneurs' livelihoods, they were job creators, and pillars of their communities. As we work towards a full recovery from the pandemic we must fill the void these closures created. Unfortunately, we are amid a decades-long decline in entrepreneurship rates across the country. In 1982, new firms constituted 38 percent of all businesses, but that fell to only 29 percent in 2018. In recent years, the rate at which firms were exiting the market outpaced the rate at which firms entered the market. This decline in entrepreneurship stems from a variety of different factors. Economic crisis like the Great Recession decrease aggregate demand and create a tightened lending environment, hurting business startups. High amounts of student loan debt, fewer employment opportunities, the increasing consolidation of businesses have led to slow entrepreneurship rates among millennials. Millennials are on track to be the least entrepreneurial generation in history with startup rates well below baby boomer and Generation X counterparts. Simply put, we are staring down an entrepreneurship crisis in the country that has the potential to significantly delay our recovery. Moreover, this decline in business startups also can lower productivity, decrease the creation of new technologies, and slow the overall rate of job growth. I think we can all agree that this scenario of economic stagnation is not acceptable. Instead, we need our economy operating at maximum strength and Congress should consider how we can help reverse the decline in entrepreneurship. This will mean examining existing programs and considering new initiatives to produce an ecosystem that is more favorable to entrepreneurs. One such proposal is my bipartisan bill called the Next Generation Entrepreneurship Corps Act, or NextGen. NextGen seeks to accomplish two main objectives: entrepreneurship inclusivity and increased entrepreneurship in distressed regions. The program uses a tried-and-true model based on programs with a track record of positive impacts, like Teach for America and the Peace Corps. The bill would create a national business proposal competition that would select fellows annually to start and run businesses in their communities. The program would reward NextGen fellows with $120,000, 2-year stipend for living and startup expenses as well as health benefits. Fellows would then have access to various resources to help them start and grow their businesses. In addition, the NextGen bill would provide fellows with access to advice and mentorship through SBA resource partners as well as valuable networking opportunities. The program would also give the fellows assistance breaking into the world of Federal contracting. But most importantly, NextGen would allow underserved entrepreneurs to obtain the capital traditional financial institutions so often denied them. As part of the program NextGen fellows would have access to SBA-backed lenders to receive access to credit. Lastly, the program would establish a fund to encourage private investors by providing leverage to those who make an equity investment in a corps member's business. I hope that today's hearing allows us to examine new ideas, like the Next Generation Entrepreneurship Corps Act and others. By revitalizing American entrepreneurship we can transform our economy to be more productive, inclusive, and prosperous. I would now like to yield to the Ranking Member, Mrs. Young Kim, for her opening statement. Mrs. YOUNG KIM. Thank you, Chairman Crow, and good morning to everyone who is joining us in the room and also virtually. I would like to welcome our witnesses, too. Today we turn our attention to a topic that is paramount: small businesses, jobs, and whether the current environment can help the Nation and its millions of small businesses recover from the COVID-19 pandemic. In May, the national unemployment rate was a dismal high point 8 percent, which is virtually unchanged from April and still far higher than before the pandemic when it was a low 3.5 percent. In my home state of California, the May unemployment rate was a stunning 7.9 percent. In my congressional district, San Bernadino County registered 7.3 percent unemployment and Orange County 5.9 percent. Small businesses are still suffering. They are doing their best to regain footing after the COVID-19 pandemic, but they are facing dismal national employment numbers, increasing inflation, labor shortages, and highest costs for their materials. The small business job situation remains extremely challenging. Entrepreneurs are offering higher wages, cash bonuses, or other incentives are still unable to attract workers. In May, almost half of the small business owners surveyed by NFIB, 48 percent, said they are unable to find workers to fill jobs. Moreover, they face a very uncertain future with higher inflation, more regulations, increasing mandates, skyrocketing taxes, and unprecedented job vacancies threatening their recovery. Small businesses are the kindling that light up the American economy, so when they struggle, so does our Nation. According to the Federal Reserve's May 2021 Beige Book, businesses, and particularly small businesses, are continuing to cope with a very difficult economic environment. The negative impact of supply chain and production disruptions, widespread shortages of materials and labor, and delivery delays make it challenging to get products to consumers. Just this month the Port of Los Angeles said ships wait on average about 5 days to get in, adding to the cost of doing businesses for entrepreneurs. In normal times those ships don't have to wait at all. Small firms are plagued by consistently rising costs and more expensive goods used to make their products. So, with a generous enhanced Federal unemployment payments, employment has clearly not show robust numbers and businesses still can't fill open jobs. Although some rates are ending the enhanced unemployment payments, the jobs outlook remains uncertain. Small businesses comprise 95 percent of U.S. companies and they represent half of our Nation's workforce and they are major drivers of new job growth, creating 64 percent of the net new jobs. At a time when these firms are working tirelessly to get back on their feet, the new administration is threatening them with repealing the tax benefits of the Tax Cuts and Jobs Act and other tax increases, and proposing more regulations and red tape. Exactly the wrong environment for our Nation's best job creators. A recent Tax Foundation analysis found the combined effects of tax changes and spending in President Biden's American Jobs Plan would reduce the U.S. goods domestic product in the long run and result in 101,000 fewer U.S. jobs. Imagine that. A jobs plan that would result in fewer jobs. Think about it. Sadly, my home state of California is a case study on what high taxes and burdensome regulations can do to tamper job economic growth. So let us learn from the misguided policies enacted by Sacramento and let us not implement them at the national level. There is no doubt that the outlook for small businesses is more uncertainty. However, small businesses, entrepreneurs, and startups are some of the most innovative and resilient businesses in the Nation. They are often nimble, fast, and they can adapt to any situation. Unfortunately, the current environment is creating headwinds that prevent growth, expansion, and job creation. I look forward to hearing from our witnesses about the ways we can support pro-growth policies that drive our Nation's small businesses forward, not backwards. Thank you, Mr. Chairman. I yield back. Chairman CROW. Thank you, Mrs. Young Kim. The gentlewoman yields back. I would like to take a moment to explain how this hearing will proceed. Each witness will have 5 minutes to provide a statement and each Committee member will have 5 minutes for questions. Please ensure that your microphone is one when you begin speaking and that you return to mute when finished. And with that, I would like to start by introducing our witnesses. Our first witness is Mr. John Dearie. Am I pronouncing that right, Mr. Dearie? Mr. DEARIE. Yes, Mr. Chairman. Chairman CROW. Mr. John Dearie, the founder and president of the Center for American Entrepreneurship. CAE is a nonpartisan research and policy organization whose mission is to improve the policy circumstances of American entrepreneurs and startups. Mr. Dearie is the former acting CEO of the Financial Services Forum and a former officer of the Federal Reserve Bank of New York. Welcome, Mr. Dearie. Our next witness is Dr. J.D. LaRock, the president and CEO of the Network for Teaching Entrepreneurship, a global nonprofit organization that provides high-quality entrepreneurship education to middle and high school students from under-resourced communities as well as programs for college students and adults. Previously, Dr. LaRock served as the president and CEO of the Massachusetts Commonwealth Corporation, where he chaired Governor Baker's Commission on Digital Innovation and Lifelong Learning. He also served as senior education advisor to Senator Ted Kennedy. Welcome, Dr. LaRock. Our third witness is Ms. Denyse Airheart, the director of Business Pathways and Mi Casa Resource Center. She oversees-- and that is in my district, so a special place in my heart from Mi Casa. She oversees the strategic advancement of the Business Pathways Department, which supports entrepreneurs through all stages of business development, helping them explore, launch, and grow their business through bilingual training, consulting, access to capital, and wholistic support services. She previously worked with the city of Maricopa, Arizona, as the director of economic development. Welcome, Ms. Airheart. I will now yield to the Ranking Member, Mrs. Young Kim, to introduce our final witness. Mrs. YOUNG KIM. Thank you, Mr. Chairman. Our final witness is Craig Etkin, president and CEO of Intelligence360 in Sugar Land, Texas. Intelligence360 is a business-to-business news aggregation company for top companies across the Nation. Mr. Etkin has almost 30 years of experience in information products, software, and technology. He manages the operations of Intelligence360, including product engineering, marketing, and business development. Prior to founding Intelligence360, Mr. Etkin was a member of the applications team at LexisNexis. And before that, he assisted in implementing new web capabilities for Dow Jones and Company. He also was instrumental in the rollout of the Wall Street Journal Interactive Edition, Barron's Online, and Dow Jones Interactive, and supported risk management solutions for Dun & Bradstreet. Welcome, Mr. Etkin. We look forward to your testimony and thank you for taking time out of your busy day running your small business to talk with us. I would also like to welcome the other witnesses and look forward to hearing your testimony. Chairman CROW. Thank you, Mrs. Young Kim. And welcome, Mr. Etkin, as well. Mr. Dearie, we will begin with you. You are now recognized for 5 minutes. STATEMENTS OF JOHN R. DEARIE, PRESIDENT, CENTER FOR AMERICAN ENTREPRENEURSHIP; J.D. LAROCK, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NETWORK FOR TEACHING ENTREPRENEURSHIP: DENYSE AIRHEART, BUSINESS PATHWAYS DIRECTOR, MI CASA RESOURCE CENTER; CRAIG ETKIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, INTELLIGENCE360 STATEMENT OF JOHN R. DEARIE Mr. DEARIE. Thank you, Chairman Crow and Ranking Member Young Kim and Members of the Subcommittee. I appreciate the opportunity to be here today. Despite strong job creation in recent months, the focus of today's hearing remains urgently important. Even if the Bureau of Labor Statistics reports on Friday that a million new jobs have been created in June, as some economists have forecast, U.S. payrolls will still be down almost 7 million from pre- COVID levels and as many as 10 million jobs short of what total employment would have been had the pandemic not happened, which is why I appreciate the opportunity to express CAE's strong support for the Next Generation Entrepreneurship Corps Act cosponsored by you, Mr. Chairman, and Troy Balderson in the House, along with Senators Chris Coons and Tim Scott in the Senate. The Act will encourage entrepreneurship and job creation in underserved areas across the country among diverse background entrepreneurs, who will receive startup capital, mentoring, and other support to help them start new businesses in distressed and low-income areas. As members of this Subcommittee are no doubt aware, research in recent years has shown that new businesses, or startups, are responsible for most net new job creation. Existing companies also create jobs, of course, but they also shed jobs, as many as a million a year in aggregate, as they become more efficient, incorporate capital and technology, and increasingly focus on what they do best. By stark contrast, new businesses create an average of about 3 million jobs each year. Startups also contribute to job creation more generally as a powerful driver of economic growth. Thanks to the work of American economist Robert Solow, who won the Nobel Prize for this insight, we know that economic growth is driven principally by gains and productivity driven by innovation. The great significance of Solow's work is that it not only identified the nature of economic growth, but also identified its principal source. That is because economists have long understood that innovation, particularly major or disruptive innovation, comes disproportionately from new businesses. Unfortunately, as scholars at the Kauffman Foundation, the Brookings Institution, and elsewhere have documented, entrepreneurship in America is struggling. Between 2009 and 2019, the number of new businesses launched in America each year dropped by about 100,000 below the historical trend, meaning that over that decade the United States experienced a startup deficit of about a million fewer new firms over that period. Just as alarming as you mentioned, Chairman Crow, economists Bob Litan and Ian Hathaway have shown that rates of entrepreneurship, that is the fraction of all businesses in the United States that are new, has fallen near a four-decade low. To find out why, my colleagues and I get out of Washington on a regular basis and conduct roundtables with entrepreneurs in towns and cities across the country. Here is some of what they tell us. ``We have the jobs and we need to fill them in order to survive, but we can't find enough people who have the skills that we need.'' ``Our immigration polices exacerbate that problem because they undermine our ability to attract and retain the world's best and most innovation talent.'' ``Limited access to portable and affordable healthcare, a lack of affordable childcare, record student debt, and retirement savings uncertainty make entrepreneurship especially risky.'' ``Access to sufficient startup capital is a constant challenge.'' ``Regulatory burden, complexity, and uncertainty distracts entrepreneurs from focusing on their businesses, increasing the chances of mistakes or even failure.'' And a number of aspects of our tax code ``are unsupportive of, or even hostile to, startups and their investors.'' In conclusion, Chairman Crow, thriving entrepreneurship is the essential pathway to faster economic growth and job creation, and revitalizing American entrepreneurship requires changes in public policy. Fortunately, we have a very good sense of what needs to be done. Research conducted in recent years, together with input from entrepreneurs by way of roundtables of the sort that I mentioned, has produced a uniquely credible pro- entrepreneurship agenda that, if enacted, would dramatically enhance the circumstances for new business formation, survival, and growth, which, as you pointed out, is so important, particularly in the post-COVID recovery period. That agenda is provided as the appendix to my written testimony. The Next Generation Entrepreneurship Corps Act is an important part of that agenda and is an excellent example of the kind of pro-entrepreneurship policy that America needs and deserves now more than ever. Thank you. Chairman CROW. Thank you, Mr. Dearie. Mr. LaRock, you are now recognized for 5 minutes. STATEMENT OF J.D. LAROCK Mr. LAROCK. Thank you, Chairman Crow, Ranking Member Young Kim, and Members of the Committee. I am honored to share what we at the Network for Teaching Entrepreneurship, NFTE, have learned from providing entrepreneurship education in 14 countries and 25 states, including 47,000 students this year. NFTE was founded on the belief that entrepreneurship education ignites passion and opens doors for student in under- resourced communities. Our model features engaging curriculum taught mostly in public schools, buttressed by community mentors and volunteers. Our programs culminate in pitch competitions where students compete for seed funding to launch their businesses. We believe in inclusive capitalism and NFTE alumni have built brands, launched scores of businesses, and created thousands of jobs. Through the Next Generation Entrepreneurship Corps Act our Nation can provide future entrepreneurs even more equitable access to the productive tools of capitalism. To underscore the importance of the act I would like to discuss three issues. First, the barriers that entrepreneurs from underrepresented communities face are systemic and require robust intervention. Second, access to sustained mentorship bolsters entrepreneurship in ways that financial resources alone cannot. Finally, inclusive entrepreneurship is a vital component right now to our Nation's economic and social recovery from COVID-19. First, the barriers. According to the Department of Commerce our minority-owned businesses are more likely to be denied credit and even when they do receive loans, pay higher interest rates. CNBC recently reported that 80 percent of Black-owned businesses fail within the first 18 months. That is significantly more than the 30 percent of all small businesses that close by their second year. Our education and workforce development systems are starting to break down these barriers by addressing the first systemic inequality, access to learning about entrepreneurship itself. States like Florida and Texas, national philanthropies like American Student Assistance are now supporting widespread opportunities for entrepreneurship education as well as programs that start students early on a process of career discovery. We have seen the difference that this makes. NFTE alumna Mary Blackford first realized in high school that she could use entrepreneurship to make systemic change. Now, just down the road from us in Ward 7, she is building Market 7. This 7,000 square-foot market will establish space for a community grocer and neighborhood micro entrepreneurs to discuss food access and create employment opportunities. Mary is the very example of the kind of emerging entrepreneur that the Next Generation Entrepreneurship Corps Act seeks to identify and support. Next, the value of mentorship. At NFTE corporate volunteers from companies like Citi, Santander, Intuit, PayPal, SAP, Microsoft, and Ernst & Young, EY, which recently launched the Entrepreneurs Access Network to help Black, Latino, and women entrepreneurs, all provide essential mentorship to our high school and middle school students. Similarly, the mentorship proposed in the Next Generation Entrepreneurship Corps Act will remove barriers and accelerate achievements. NFTE alumnus Andres Cardona was attending high school in Miami and considering dropping out to help his mother pay the bills, when a NFTE force helped him realize that he could start his own business while staying in school. A decade later, his Elite Basketball Academy is thriving with 20 employees and multiple sites, generating seven-figure revenue annually. Mentorship was an essential part of his journey and Andres still meets with his mentor regularly. Finally, the importance of entrepreneurship to post-COVID economic recovery. As you know, the pandemic vitiated minority- owned businesses. CNBC reported that between February and April 2020, Black-owned businesses declined by 41 percent compared to a 17 percent decline among White-owned businesses. Black-, Latino-, and Asian-owned businesses all experienced outsized closures and declines in cash balances, according to the Fed. Simply put, as we come out of COVID our economy cannot recover fully without entrepreneurship. And there is a legislative vehicle that provides a timely opportunity to help. The Next Generation Entrepreneurship Corps Act should be included in the American Jobs Plan to accelerate post-COVID recovery through entrepreneurship. In closing, entrepreneurship is inextricably woven into the American dream. When I think about what that means, I think about NFTE students at Nicolas Junior High School in Fullerton, California, getting encouragement from their EY mentors while they compete in one of our global entrepreneurship competitions. I think about Robert Refkin, CEO of Compass, the real estate company. He got his first exposure to entrepreneurship through a NFTE summer camp. Compass recently made its IPO and raised 450 million, and Robert is now on track to be the next and youngest Black billionaire. Finally, I think about the thousands of young adults who, with Congress' support, will become the inaugural cohort of the Next Generation Entrepreneur Corps. The American dream belongs to all of us and entrepreneurship also belongs to all of us. Thank you. Chairman CROW. Thank you, Dr. LaRock. Ms. Airheart, you are now recognized for 5 minutes. STATEMENT OF DENYSE AIRHEART Ms. AIRHEART. Thank you, Chairman Crow and Ranking Member Young Kim. It is my distinct honor to be in attendance today virtually and to be able to speak on behalf of the small business community that we are so privileged to work with at Mi Casa Resource Center. I would like to share a little history about the agency I work for because I believe it gives insight and credibility to my testimony. In the late 1970s, Mi Casa began offering job training programs for women to help them break into higher-paying jobs. Recognizing self employment as another viable route to economic stability, Mi Casa expanded in the mid-1980s to include bilingual business development services to nurture the entrepreneurial spirit of low-income female and minority businesses. As Mi Casa has grown and developed we have recognized the need for programs to advance economic self-sufficiency for the entire family. In 2016, our mission evolved to reflect an expanded target population to advance the economic success of families with limited opportunities. As you shared, Chairman Crow---- Chairman CROW. Ms. Airheart, if I could stop you for one second. Ms. AIRHEART. Yes. Chairman CROW. We are having a hard time hearing you. We have tried to turn it up on our end, but I think you might need to speak up slightly or get closer to your microphone, if possible. Ms. AIRHEART. Sure. Is this a little bit better? Chairman CROW. It is a little bit better, yes. Ms. AIRHEART. Okay, okay. The Women's Business Center at Mi Casa Resource Center supports entrepreneurs through all the stages of business development, helping them plan, launch, manage, and grow their business through bilingual consulting, long-term training, as well as business-related workshops and resources. In 2020, when we collectively experienced a global pandemic, we had to double down on our services and work even harder to meet the needs of the highly vulnerable community. We were able to help over 1,800 businesses, 45 new businesses were launched, over $2.7 million in capital were obtained with over a million of that being COVID relief, 27 new jobs were created, and 311 jobs were retained. Additionally, 24 patents were issued through the pro bono patent program, which is a partnership with the USPTO. So, I stand before you to say that the Next Generation Entrepreneurship Corps Act has the ability to be a catalyst for distressed communities. At Mi Casa what we have seen is the systemic issues that have been shared earlier today and what we do is we work hand-in-hand with these individuals to remove barriers to success. A program like NextGen has the ability to ignite economic development within distressed communities that continue to see brain drain, which is talent leaving a local community. Ultimately, NextGen would be instrumental in creating places where underserved entrepreneurs can reinvest, hire local, make a local, national, and hopefully in some cases a global change. Thank you again for the opportunity to speak on behalf of women-owned, minority-owned businesses from the Denver metro area. Chairman CROW. Thank you, Ms. Airheart. We appreciate it. And I think the issue was on our end actually. We turned the volume up in the room, so I appreciate you bearing with us. Ms. AIRHEART. No problem. Chairman CROW. And I think we are fixing it on our end. Thank you. Mr. Etkin, you are now recognized for 5 minutes. STATEMENT OF CRAIG ETKIN Mr. ETKIN. Thank you, Chairman Crow, Ranking Member Young Kim, and distinguished members of the Committee. My name is Craig Etkin. I am the president and CEO at Intelligence360, a sales intelligence company that provides real-time data to clients to uncover new business opportunities. In short, we help other businesses succeed. In 2018, I graduated from the SBA Leaders Initiative and I would like to take a moment to recognize the extraordinary job the team at SBA in Houston does under the leadership of Tim Jeffcoat, SBA district director, and the work for Yusef Muhammad, southwest regional vice president at SCORE. According to the SBA website, since its inception in 2008, the SBA Emerging Leaders Initiative has trained over 5,000 small business owners like myself, created over 6,500 jobs, generating over $300 million in new financing, and securing over $3 billion in government contracts. According to SBA's resource partner Interise, in 2018, Emerging Leaders alumni businesses saw an average revenue growth of 36 percent, Latino-owned businesses saw 64 percent average growth, and minority-owned businesses saw 43 percent average growth. In addition, minority-owned businesses operating in lower- income communities saw 77 percent revenue growth and 60 percent of new employees were hired locally. It is from that perspective that I offer my testimony today. While the yearlong health emergency and associated lockdowns impacted everyone, some were more hurt and continue to be than others. Small businesses took the brunt of the pandemic. It is not a surprise considering small businesses typically operate under tight profit margins and are more vulnerable to fluctuating economic conditions, as well as changed in consumer behavior. The coronavirus triggered extremes in both cases. Small businesses are the backbone of the U.S. economy and are absorbing an outsized proportion of the direct and indirect impacts of the coronavirus. Policymakers in Washington should do what they can, not only to shore up current job creators, but encourage a new wave of entrepreneurialism more broadly. There are many existing successful programs through SBA's Office of Entrepreneurial Development, SBDCs, WBCs, and the Office of Entrepreneurship Education, SCORE, Learning Center, and the Emerging Leaders Initiative. Congress through the American Rescue Plan has already allocated $100 million to the Community Navigator Pilot Program for targeted outreach for small business in underserved communities. Rather than what is outlined in H.R. 1126, why not promote access to capital to these small businesses through the SBA Microloan Program rather than a stipend? Getting a microloan can be a great first step in creating credit history and building financial relationships needed to sustain and grow a business long term. Access to education and mentorship is available through SCORE, the Learning Center, and advanced training in the Emerging Leaders Initiative. Through Community Navigators connecting with new entrepreneurs through trusted community relationships, and utilizing existing programs at SBA, it is my belief we will see not just several hundred, but thousands of new businesses and new jobs created. Thank you for reviewing my testimony. Chairman CROW. Thank you, Mr. Etkin. I am going to begin by recognizing myself for 5 minutes and I would like to start with Ms. Airheart. Ms. Airheart, our community has areas that have been underserved for a very long time, and Mi Casa in particular and your work in particular works to prompt and invigorate entrepreneurship in some of the more underserved folks and populations. I would love your view as to what you view as the primary barrier as you are working with prospective entrepreneurs, what is the primary barrier they face in starting their businesses. Ms. AIRHEART. Thank you, Chairman Crow. What we see historically are systemic issues within the community. It really is--you know, for a lot of the Latinx population, whose families are working together, trying to stay together, and ultimately, there is that lack of leadership, mentorship. Through program like Mi Casa we work closely, very similarly as the other programs were designed and were talked about today, to really shepherd individuals through leadership training, business plan development, you know, presenting different opportunities to access to capital. But ultimately, I think it is just the lack of seeing individuals like themselves be leaders in their own community. So I think that is why this act, this bill really has the opportunity to ignite and really develop these distressed communities in a way that has not been done before. Chairman CROW. Thank you. And I know we have spoken before the support ecosystem in a community. Can you kind of just expand on some of the prior conversations about what an ecosystem means for our community and how that lack of an ecosystem can be overcome? Ms. AIRHEART. Sure. The support of the ecosystem, you know, can be modeled in multiple different ways. At Mi Casa we do that by peer-to-peer connection and then we take that, depending on where they are in their business, we then connect them to mentors within the community. Ultimately, what you see when these local business owners are successful is the stickiness. Right? They are able to hire locally, reinvest locally, keep their talent in their businesses, so, you know, it really builds upon the steppingstones that are created. And ultimately, what you are looking for is for these entrepreneurs and these small businesses to not necessarily leave these distressed communities, but turnaround and reinvest into them. Therefore, the ecosystem is strengthening that local economy. Chairman CROW. Thank you, Ms. Airheart. Mr. Dearie, I wonder if you might talk or expand on the issue of access to capital and why access to SBA lending vehicles is in some ways better than access to other traditional financial institutional lenders and what barriers might exist with those traditional lenders or commercial lenders and why the SBA vehicles in particular, in some circumstances, are more beneficial for entrepreneurs. Mr. DEARIE. Sure. The SBA plays a critical role, but particularly with regard to bank capital for new and small businesses. I am a former bank supervisor at the New York Fed and I can make a very good argument that banks are not the ideal source of capital for startups. Startups are inherently risky. Half fail by their fifth year. And we don't want, as much as we want to be supportive of startups, we don't want to damage the balance sheets of the nation's banks in pursuit of other national priorities. We got into trouble doing that in the housing crisis, of course. The great service, the SBA bridges that gap between depositories and new and small businesses by assuming some of the risk. And that assumption of risk becomes critical to enable bank capital to be a source of capital for startups in particular. Of course, other sources of capital, you know, from investors instead of depository institutions, are also critical for startups and are sort of uniquely appropriate in light of the risk profile of startups. And these sources are angel capital, venture capital, equity capital, where the investors bear the risks and if the startup fails, they take the hit instead of a bank or a depository. Chairman CROW. Thank you, Mr. Dearie. My time has expired, so I would now like to yield to the Ranking Member of the Committee, Mrs. Young Kim, the gentlewoman from California. Mrs. YOUNG KIM. Thank you, Mr. Crow. You know, I have heard from my employers in my district that not only are they having difficulty finding workers, but they are having finding the workers for the right positions and right workers for the right job. And I think, Mr. Dearie, you also listed that in your testimony as one of the top issues you and your colleagues have been hearing from small businesses as you conducted many roundtable discussions. So, for the entire panel would you be able to elaborate how we can increase worker skills and transition workers to new skills? Mr. DEARIE. Sure. You are quite right, there is a lot of attention paid, and rightly so, to access to capital. But access to appropriately skilled talent is just as important for a startup. You can't turn your idea, you can't turn your dream into a successful business without the staff, the employees that have the skills that you need. And we hear that at virtually every roundtable that we do. As I said, we have the jobs, we need to fill them to survive, we can't find enough folks that have the skills that we need. That is really an indictment of the U.S. educational system. We are simply not producing enough people that have the skills that 21st century businesses need, including new and small businesses. The bull's-eye of that, if you will, is STEM, science, technology, engineering, and mathematics. There has been a great deal of discussion about how do we address that. Certainly, it is a very complex question that has a complex answer. But certainly, I am of the view, and we hear this from startups, that a great under-used asset in this country is the Nation's community college system. There are 1,200 community colleges across the country. They are typically the first experience of higher education for immigrants, for example. They are great sources for people to be able to upskill, to get stackable credentials to, you know, lifelong learning. So, among the many things that can be done to fix that problem, I think leveraging the community college system is critical. Also, we need a more active conversation between the business community in this country and educators, so that businesses can tell educators, you know, here are the skills that we need. And if you are willing to amend your curriculum to teach those skills, we will hire those people. There is not enough communication, in our view, going on between the business community and the educational community. Mrs. YOUNG KIM. Thanks for mentioning that. That is why I introduced the Innovations in Informal STEM Learning Act and, hopefully, that will prepare our next generation of workers for the right jobs. So, I want to thank you for mentioning that. And I do want to pose the next question to all the panel. Small businesses create a majority of the net new jobs, but they are facing increasing costs, inflation, price pressures, taxes. So, I think you would agree that these pressures, they are keeping them from expanding and adding jobs. So, I would like to ask the panel what price pressures would you like to see eliminated? Dr. LaRock, you want to start? Mr. LAROCK. Thank you, Ranking Member Young Kim. You know, one factor I would point to is just the proliferation of regulation and the impact that that can have on startup entrepreneurs in particular. At NFTE, we work with many, many graduates of our program who try to launch and sustain actual businesses. And more than taxes, more than other policy issues, the regulatory burden that they face and the administrative burden is something that comes up a lot for our learners, in particular because these--many of our alumni are really trying to go it on their own as many entrepreneurs do. If I could just double back on to your previous question, I would like to underscore a couple of points that Mr. Dearie made in response to your question. A real opportunity for our education system is to do much more to expose young learners to the types of jobs and careers that exist. That is why the efforts of national philanthropies like American Student Assistance are so important and why we get a lot of traction at NFTE with career and technical education leaders because they understand that you don't have to be a welder or an electrician or an auto repair technician. You can have an auto repair shop. You can have an electrician business. And so we find homes in those types of schools where educators are making the connection between entrepreneurship, the broader economy, and personal self-fulfillment in doing of one's job. Lastly, and briefly, I would also like to underscore the particular opportunity now to help community colleges fully embrace entrepreneurship education in the way that we see four- year public and mostly private higher education doing. The gaps that exist between community college entrepreneurship opportunities and what we see at other parts of higher ed sustain some of the inequities that we see in the system. Chairman CROW. The gentlewoman's time has expired. The gentlewoman from Georgia, Ms. Bourdeaux, is now recognized for 5 minutes. Ms. BOURDEAUX. Thank you so much, Chairman Crow and Ranking Member Young Kim. And thank you to all the witnesses for joining us today. I want to start off with one of the issues that was raised by Mr. Dearie and elaborated on some in this testimony, which is about the rates of entrepreneurship declining, the concurrent decline in productivity. And I am just curious if you could elaborate more on, you know, why this is happening and are there certain sectors where we are really--we have seen this decline more rapidly over time? Mr. DEARIE. Sure. Thank you for the question. Alarmingly, the research that is--I will speak to your question as to particular sectors first, if I might. Alarmingly, the research that has been done on the decline of the share of all businesses that are new, you know, sort of an interesting gauge of the entrepreneurialness of the U.S. economy, if you will, indicates that the decline is pervasive. It is happening, and I am referring specifically to the very famous Brookings paper by Bob Litan and Ian Hathaway, who documented this decline in ways that had not been done before. They found it is happening in all 50 states. It is happening in all but a handful of 360 metro areas that they examined. And it is happening across every industry sector. So, it is pervasive. In terms of why it is happening, that is exactly the question that I asked in my own professional transition from financial supervision. When I found out about all this I got terribly interested in it and I went and I asked Bob Litan and Ian Hathaway and other people who had done the research why is this happening? And they said we don't know. We have certain, you know, ideas and theories, suspicions, but fundamentally we don't understand it. And it was with that in mind that I set out on the first road trip of doing roundtables with entrepreneurs around the country, asking them quite simply what is in your way? What is going on? Why is this happening? I wrote a book about that called ``Where the Jobs Are'' and it was as a follow-up to that book that I decided to launch CAE, to work with people like you to fix that. So, if you look through our agenda that is the appendix to my written testimony, it is chockful of specific ideas grouped in all of the subject categories that we hear from entrepreneurs at roundtable that my colleagues and I continue to do on a regular basis. Ms. BOURDEAUX. Okay. So, we have got some reading to do on that. Thank you on that. I just, you know, it does occur to me that, you know, prior generations, like my grandparents' generation, everybody had a small business, you know. It was just part of the fabric of their lives. And now so much of our business is consolidated, you know. It is the Walmarts, it is the Targets, you know, and it is just very, very hard for people to get up and going. Just another huge issue, my district is very, very diverse and this is for Mrs. Airheart. I wish we could duplicate your program all over the country. It sounds like a fabulous program. I just wanted to check in with you as you work with women- and minority-owned businesses, are there things that we could be doing or the Small Business Administration could be doing to help with the minority-owned businesses, help entrepreneurs from communities of color be able to access programs better or know the resources that are available to them? Ms. AIRHEART. Thank you for the question. Absolutely, I think there is always more that we can do. One of my mentors always said we have to educate the educated. We have to create an awareness of what exists in the community and how to access it. I am incredibly honored and privileged to work for Mi Casa Resource Center. I know that the individuals that walk through our doors feel like they are walking through a university, a local community college, and, therefore, they are leveling up-- we are leveling up their experience, their access, and their connectivity to other resources within the community. So, I think that the experience overall is so incredibly important. Funding for programs like the Women's Business Center or other programs that support entrepreneurship in distressed communities that focus on the BIPOC population is critical because these are the individuals that have the interest, the desire. This is--these are the new builders of the new America. And I think that we just really have to continue to support programs like the Women's Business Centers and other programs that the SBA has supported in the past. Ms. BOURDEAUX. Okay, thank you very much. I yield back the balance of my time. Chairman CROW. The gentlewoman yields back. I now would like to recognize the gentleman from New York, Mr. Garbarino. Also a fellow fanatic of apprenticeships as I am, so you are recognized for 5 minutes, Mr. Garbarino. Mr. GARBARINO. Thank you, Chairman. Yeah, big fan of apprenticeships. I don't think everybody should go to college. I think there is a lot of people, like you said, Mr. LaRock, that you can become a plumber and then, all of a sudden, run a plumbing business. And, you know, one of my good friends from high school did that and he now has--he makes a lot more money than I do, I will tell you that, so. Mr. Etkin, I have a question. The Biden administration released America's Jobs Plan in March, which focused on not just regular infrastructure, but other things as well, and not brick-and-mortar infrastructure. Right now we are in negotiations for doing just a brick-and-mortar infrastructure bill. How do you think prioritizing--would prioritizing true infrastructure projects over non-infrastructure spending help increase job creation and hiring? Mr. ETKIN. Well, thank you for the question. My grandfather was a plumber, so he never went to college and ran a very successful business. You know, we really need to focus in this country on rebuilding. There is a lot of need in infrastructure here domestically. And the initiatives to focus on roads and bridges and airports and really rebuilding our inner cities I think is a great first step in driving new entrepreneurial innovation. There are a lot of initiatives that I can't necessarily speak to from a policy perspective, but I know that when companies can rely on their safe neighborhoods and their roads and bridges to get to work are sound, they have the ability to hire and run a business from a good foundation in their neighborhoods. So, I wish I could answer the question beyond the brick-and-mortar. There are a lot of spending initiatives that I see that a lot of people are looking at going why? I mean, the numbers are staggering to small business owners to hear coming out of Washington in the trillions of dollars. And quite frankly, I think it is perpetuating an environment of fear right now in small business owners. They are concerned about inflation. They are concerned about hiring. A lot of their new costs are going into labor. They are having to attract workers back in from sitting at home. Small restaurants, I work with hundreds of entrepreneurs across the country, mostly in B to B, but some in B to C that are having real problems bringing workers back and staffing up. And I think that is due a lot to an environment of fear. I mean, we literally have moved from a health crisis to a crisis of fear in small business. Business owners are unsure of their future. They are unsure of being able to reopen fully. And I think a lot of that has been perpetuated by a lot of rhetoric coming from politicians from all levels of government. People are scared. They need to get back on their own feet. They need to hire and get back to work. And there are a lot of things being thrown up as roadblocks to doing that. And so, unfortunately, you see we are in a position where companies are struggling and they are struggling to get back to normal. And bringing employees back to work is, you know, I think a big part of the way they need to move forward. And---- Mr. GARBARINO. So, Mr. Etkin, I just want to comment on that because I actually met with the new CO of the Chamber of Commerce yesterday. We had a meeting with her and part of the discussion was how about half of Americans, 49 percent, lost their jobs during the pandemic reported they are not active at all or not very active in searching for employment. I had spoken to businesses in my district that are searching for jobs. They want people to come back to work, they just can't find the workers. But it sounds like you are saying, you know, it might not just be solely the person not wanting to come back to work. It might--you know, the employers might be a little hesitant in brining people back. Is that what you are saying or did I mishear you? Mr. ETKIN. No, that is absolutely right and especially in areas where lockdowns are still--I mean, you see people waiting in lines just to go into a grocery store. I travel around the country. I mean, we opened in Texas very early. I think it was a good idea. It was scorned by many in the political circles across the country, you know, as a bad policy decision. But I see the benefits of, you know, opening business back up again. So, not only do you see a hesitancy from business owners about an uncertain path forward, but also a climate of fear with going back to work. Mr. GARBARINO. Thank you. I yield back. Chairman CROW. Thank you. The gentleman yields back. Now I will recognize the gentleman from Minnesota, also a serial entrepreneur, Mr. Phillips, for 5 minutes. Mr. PHILLIPS. Thank you, Mr. Chairman. And I would argue that nothing is more American and wonderfully politically unifying than entrepreneurship, so thank you for holding this meeting today to our Ranking Member and Chair and to our wonderful witnesses. In my experience, to become an entrepreneur you need inspiration, preparation, human capital, and financial capital. Those are the four legs of the stool. And on the subject of financial capital, I think we are all aware that only three urban areas in the entire country, both East and West Coasts, Silicon Valley, Boston, and New York City, currently account for 80 percent--80 percent--of all venture capital investment. So, on a subject that our Chairman already referenced, Mr. Dearie, what role can Congress play very specifically to better encourage a more equitable distribution of startup capital to parts of the country that right now are starved for it? Mr. DEARIE. Thank you for the question. It is an enormously important issue. It is one that we hear at every single roundtable that we do around the country. There is simply not an equitable distribution of venture capital across the country. Just to give you a quick example, it is just one that I know off the top of my head. I am sorry it is not your state, but it is a nearby state. At a roundtable in Michigan, we were told by entrepreneurs and investors there that the state of Michigan has access to or gets about 1 percent of total venture capital in the country, and 50 percent of that 1 percent is in Ann Arbor. And so the rest of the state gets--has to share the 50 percent of the 1 percent that they get. We have been involved in, as you know--I believe that you were a House cosponsor of this piece of legislation and we thank you for that--there is a bill that was introduced and led by Senator Klobuchar in the Senate along with Tim Kaine and Angus King, Ro Khanna, yourself, Tim Ryan, and Terri Sewell, if I remember correctly off the top of my head, in the House. And what that bill is, called the New Business Preservation Act, and what that bill did, it borrowed from a very interesting experience that happened in Israel. In the late '90s, at that time practically 100 percent of venture capital was in the United States. It was an American phenomenon. Israel had lots and lots of new businesses stemming from the fact that when the Soviet Union collapsed in the late--in early '90s, a lot of folks immigrated to Israel and a lot of those folks were engineers and scientists. A lot of them started businesses. So, there was a lot of entrepreneurship and no venture capital. And the way the Israeli government tried to address that is they offered a one-to-one match of public taxpayer funds with private capital to lure American venture capitalists over to Israel to look around and consider investing in Israeli startups. It was enormously successful. We have the same problem except it is inside the country. We have 80 percent of venture capital in three cities. And so the bill would do exactly that, it would create a problem administered by Treasury to offer a one-to-one match of public dollars for venture capital invested in promising startups in heartland states. I think it would be enormously impactful. Everybody we talked to about it around the country is enthusiastic, both startups, entrepreneurs, and investors. Mr. PHILLIPS. I appreciate that. And perhaps we can even weave that into the Chairman's legislation, too. Mr. DEARIE. That would be great. Mr. PHILLIPS. Inspire potential entrepreneurs. Mr. LaRock, I got to say I love NFTE's entire model. And I was really lucky, I grew up in a family of entrepreneurs. I was exposed to it at a young age. And perhaps equally importantly I remember Business Day in elementary school, which really inspired me and introduced me to the notion of becoming an entrepreneur myself. So, in the spirit of rowing further upstream than we typically do, what specific steps can Congress take to inspire young people, at least introduce them to the notion of becoming entrepreneurs? Mr. LAROCK. Thank you, Congressman, and I appreciate the kudos to our organization. Honestly, I think the foundation, the foundational concepts of the NextGen bill are what is needed. The reason that we at NFTE are supporting the bill is because it reflects so much of what we have seen work with our own model. That is number one. The second is I really do think that our education system, and not just career and technical education schools, but academic, comprehensive high schools and middle schools need to start embedding career exploration and career-oriented education, including entrepreneurship, starting as early as the fifth grade, but most certainly by middle school. Again, innovative philanthropies like American Student Assistance are putting some funding into this and that is great, but it is a drop in the bucket of what is needed. And when Congress has the opportunity to review the Perkins Act, ESEA, WIOA, which has some allowable activities for youth, I would encourage Congress to take new opportunities to devote more funding for youth entrepreneurship, at least more flexibility. Mr. PHILLIPS. Love it. And I might just, as I close, perhaps we should consider changing our name to the Small Business and Entrepreneurship Committee. That would send a nice message to the country. And with that I yield back, Mr. Chair. Chairman CROW. Thank you. The gentleman yields back. The gentlelady from Illinois, Ms. Newman, is now recognized for 5 minutes. Ms. NEWMAN. Well, thank you, Mr. Chair, and thank you, Ranking Member, for putting together this great discussion this morning. And I will echo Mr. Phillips' great idea. I think that is a wonderful idea, so I am on board for that. So, thank you all. Thank you to our guests today. This has been more validating, and I mean this in the best compliment, more validating than illuminating because this is what I hear in my district, that I think Mr. Dearie started out sharing what some of the challenges are for our small businesses moving forward coming out of the pandemic and as we work through our recovery and our economy. You know, and it is what I hear, is that, you know, that we don't have enough skilled workers. Therefore, we need more workforce training. Right? That our small businesses don't have enough access to capital. That childcare is a huge problem. We have lost 70 percent of our childcare structures in this Nation as a result of the pandemic, and we have to support that. There has been denial of credit, particularly in Black and Brown communities of business. And then our immigration policies don't allow us to bring wonderful folks in to do the work that is needed, whether it is currently skilled workforce training and/or other. So, I think we all know what we have all been through, Econ 101, that the only way the economy grows is when we have more people being productive. So, our immigration policies right now are a little bit challenging. We need to move forward and be in the 21st century around that. And then lastly, mentorship is a problem. So, really a long list. Right? So, I am going to challenge Mr. Dearie and Dr. LaRock to give me your top three. And the reason I ask you for your top three amongst those is that I would say we are trying to build legislation that prioritizes the biggest problems. And so if you can prioritize among that list of things that Mr. Dearie shared to address, that Congress can address, that would be super helpful. So, with that I will turn it over to Mr. Dearie if you wouldn't mind answering. Mr. DEARIE. Sure. These kinds of questions are very hard. You know, your top answer, your top three, but I understand the spirit behind the question. Reflecting the conversations we have had here today, I mean, if I were forced to pick three I would say, first of all, entrepreneurship in America today remains an overwhelmingly White and male phenomenon. We have been talking today about how important entrepreneurship is as a pathway to economic development and job creation. It is also a pathway to economic empowerment and financial empowerment for the entrepreneurs themselves. And so I would make a priority, a policy priority, make American entrepreneurship more inclusive. And that is exactly why we at CAE at an enormous fan of the NextGen Act because the specific intent of that is to promote entrepreneurship in underserved areas and among underrepresented aspects of our population. We need more women entrepreneurs who are active. We need more Black and Brown entrepreneurs who are active. And so I would make that at the top of the list. The other two, you know, we have talked about the--as Representative Phillips just referred to, if there were two other things that entrepreneurs need aside from their great ideas it is capital and access to properly skilled people. So, pursuing all ideas and all options in terms of expanding access to capital, and there are lots of ideas in the appendix to my testimony. And then also in terms of, as Congresswoman Young Kim put her finger on, the upskilling and the workforce training, the lifelong learning to make sure that entrepreneurs have access to the people that they need to turn their dreams into productive businesses. Ms. NEWMAN. Thank you. And Dr. LaRock, if you wouldn't mind adding to adding to Mr. Dearie's comments. Mr. LAROCK. Thank you, Congresswoman. I associate myself with Mr. Dearie's comments and just go back to, you know, the three things that I highlighted in my testimony. Focusing any effort on the disparities that exist and really building in equity as a design principle I think is vitally important, number one. Second, mentorship, an explicit component around mentorship is vitally important. Because what we have learned working with our NFTE entrepreneurs who have gone on to start and sustain businesses is that all of their success still doesn't make up in many cases for a lifetime of not having the social capital that they weren't born into. And government policy can't recreate that, those opportunities easily, but they can stitch together communities of interest, like minority communities and the business community. We do it in a private sector, nonprofit way at NFTE and I think it can be done through policy as well. And then finally, I just underscore what we already talked about regarding opportunities to promote equity and entrepreneurship in the education system as well, particularly in the K-12 education system, but community college as well. Ms. NEWMAN. Well, thank you both for your comments. Thank you for being here today and I yield back. Chairman CROW. Thank you. The gentlewoman yields back. So we have time, we are going to do another round for others who want it. And I will begin by recognizing myself for another 5 minutes. I just wanted to kind of expound on this notion of infrastructure. And I am a huge supporter of the American Jobs Plan, President Biden's plan, because undoubtedly, I mean, there is, I think, universal agreement that we don't have 21st century infrastructure. That we made investments in infrastructure over 70 years ago after World War II, then we stopped making the investments in infrastructure and even stopped keeping it up for that matter. And you can't have bridges falling down, can't have roads, we have to expand broadband into vast swaths of America that don't have it to prop up entrepreneurship and level the playing field there. But, you know, one of the largest times of growth in American history was after World War II. There is a number of reasons for that, but one of the biggest reasons is that women entered the workforce. We had an entire segment of the population that was denied access to the workforce before and then they entered the workforce and it led to incredible economic growth for the country. So, looking at it now, we already touched on the issue of immigration and we have to reform our immigration policies to make it easier for entrepreneurs and incredibly talented people that come here to contribute to our economy. But, Ms. Airheart, just expounding on this notion of latent potential, We have all of this built-up latent potential, incredible talent, entrepreneurs sitting here ready to go. Can you just talk about in our community, if we are able to remove some of those barriers--childcare, healthcare, student debt, lack of ecosystem and mentorship--what would that mean? What would that look like? And how many folks do you think are ready to go to kind of bring our economy up to the next level in the 21st century? Ms. AIRHEART. Thank you, Chairman Crow. You know, I smile because I think it is just--there is certainly a buzz within the entrepreneurial community and you nailed it. You talked a little bit about some of these obstacles, these hurdles, the childcare, the student loan debt. I also--on a regular we will do focus groups and we will meet with individuals that are going through a career pathway as well as are small business owners. And they will talk about having to make the choice between getting a job or not going to school because the student loan debt is so overwhelming. So, the way I think about it is that we have these small businesses and they are only able to grow to the point of butting up against these obstacles. Right? Whether it is the childcare costs, so they are not able to grow, they are not able to reinvest into their businesses because of these broader issues that are really systemic in our society. You know, the childcare costs, lack of access to it, is incredibly challenging for the women that we work with. At Mi Casa we provide childcare onsite for individuals that are going through our long-term training. And we see them, they come in with their young kids and they are so incredibly hopeful for their futures. So, I just feel like there is this ecosystem, this buzz of entrepreneurs, but the reality is that they are only able to grow to a certain level because of these broader issues that really put a cap on them. Something else that I would love to add is that earlier someone asked, you know, what are your top three, and I really--I think about financial education. I think that for the entrepreneurs that we work with on a regular basis, their financial acumen is not there and they lack the confidence to pursue capital investment. So, I just think that that is a huge area of opportunity that we can infuse into our youth and then really upskill them through education. Chairman CROW. Mrs. Young Kim, the gentlewoman from California. Mrs. YOUNG KIM. Thank you, Mr. Crow. I know we have been talking a lot about the American Jobs Plan that President Biden released in March. And since then, both sides have been working diligently behind the scenes to come out with a bipartisan solution that we can get to support because we do agree that there is a consensus in getting a good infrastructure legislation to get our economy moving. But President Biden's jobs plan calls for--you know, he started with over $2 trillion and his plan is prioritizing climate change and other spending over infrastructure provisions, and trying to pay for that by raising taxes, including those on the many businesses organized by C corporations and S corporations. But as you know, the U.S. Chamber of Commerce came out with the information that many of the C corporations, over 85 percent of them, are small businesses, too. So, raising taxes on C corporations will not just hurt the large businesses, but it will hurt all businesses and it will really hurt the economy as well. So, I would like to ask the panel, or, you know, one or two of you given the time, how sharply increasing taxes will hinder the ability of those businesses to grow and create jobs. And if you can cite some specific examples that would be very helpful. Go ahead, Mr. Dearie. Mr. DEARIE. I will start. Well, certainly, Congresswoman, all else being equal, any business, new or existing, would love to keep more of what they earn than less, for sure. Having said that, I think it has a lot to do with what the additional revenue is going to be used for. And I think at the roundtables that we conduct around the country, there is a broad consensus that we need to invest more in infrastructure, which supports the economy, supports business. The other thing I would pass on to you is that the tax issue that we hear more often than any at roundtables is more about tax complexity and uncertainty than where marginal rates happen to be. Business people can build a business around virtually any number. You know, just give me a number and I can build a business around that. What really drives them crazy and distracts them, takes their eye off the ball is when--it is the complexity and constant uncertainty. So, my counsel would be a more simple tax code, a more constant tax code, and let entrepreneurs focus on what they do best, and that is build and grow businesses. Mrs. YOUNG KIM. And I would like to ask Mr. Etkin if you can share your perspectives on this. Mr. ETKIN. Yes, thank you. It is amazing to me that at a time where so many small businesses are really just trying to find the new normal, that we are talking about increasing tax burden on small business. They are really having to come out of this pandemic, really look up at what their plan is for the next 2 to 5 years, and now they are facing a policy that is going to increase their tax burden when they are looking at just bringing people back on board and making it through probably the most difficult experience they have had as a small business owner. We have been in business for 22 years. We have seen the dot-com bubble bust. We have seen 9-11. We have seen the Great Recession. And now we hopefully made it through the experience of COVID. And it is my feedback that I get from the hundreds of entrepreneurs, business owners, CEOs that I work with at all levels that now is not the time to handcuff business and job creators with tax burdens, especially on non-brick-and-mortar infrastructure. I think there is consensus around the need to rebuild our roads, our bridges, the infrastructure that people understand are critical in having successful businesses, neighborhoods, and a base to build a future from. But when you start moving outside of that, I think that is when you really look at what are the priorities of this administration in terms of bringing jobs back and really allowing entrepreneurs to be uncuffed from the restrictions that they have seen over the last year? And so it is my opinion that now certainly is not the time to talk about increasing taxes on job creators. Mrs. YOUNG KIM. I appreciate your perspectives. Thank you. I yield back. Chairman CROW. Thank you. The gentlewoman yields back. I now recognize the gentleman from New York, Mr. Garbarino, for 5 minutes. Mr. GARBARINO. Thank you, Mr. Chairman. Mr. Dearie, you just touched on a couple different things in a couple of your statements. And I don't know if my--well, my district is definitely different than my colleagues that are up here. And Ms. Airheart talked about childcare, healthcare, the limitations there being--needing to focus on that to help the job growth. I know for a fact that in my district businesses have left Long Island because where I am we don't have sewers. The roads are so old that they--you know, turning on and getting on a highway, you can't do it with an 18-wheeler because they didn't have them back when they were built. Our energy grid is so low. So, that is an issue on my district. You know, you mentioned the brain drain. You know, people are not trained for the proper positions that they need to be now and the focus on STEM and apprenticeships. So, it is all of the above? Does it matter? Is it different? Where should the focus be? You know, which one--what is the chicken and what is the egg and what do we start with? You know, out of all these different things we are hearing so much testimony. What do we start with? Mr. DEARIE. That is a very good question and this is what we are all here to debate. But, of course, you know, I think we all agree on what the issues are and it is a question of sequencing, a question of prioritizing. Certainly with physical infrastructure there is a broad consensus that we have--you know, we are way behind the eight ball and we need to do more now. All you have to do is drive the George Washington Parkway of the other side of the Potomac and you see that. However, there are other issues that are enormously significant. I will just focus on one, childcare, because we are talking about it. It is true that out of 40 industrial democracies around the world, the United States is the only country that does not have a national childcare policy. We are the only one. We did have a national childcare policy at one point in our history, and the Chairman referred to this sort of, and that was during World War II. And the reason was all the men were overseas fighting the war and we needed the factories to be staffed. And so there was an enormous publicly funded childcare program that led to, after the war, the entry of women into the economy and led to booming economic times, simply because there were so much more people in the economy starting and growing businesses and going to work for other businesses. When we do roundtables with women entrepreneurs and when we started the Senate Entrepreneurship Caucus in March of 2019, the very first event that we did with that caucus was a roundtable of women entrepreneurs that we flew in from all over the country. The top issues that they wanted to talk to the Senators about were barriers to them: healthcare, childcare, record student debt, and retirement security uncertainty. It is those uncertainties, those life risks that are keeping them from being entrepreneurs. So, those are super important issues. If we were to solve them, I am convinced that it would lead to a very significant boost in economic growth, job creation, tax receipts, et cetera, et cetera. Mr. GARBARINO. Do you think we should do that before we do brick-and-mortar? I mean, like I said---- Mr. DEARIE. Yeah. Mr. GARBARINO.--in my district you can't open a restaurant, you can't open a business because the Health Department will tell you, no, we don't have sewers. Mr. DEARIE. Yes. Well, certainly if there are physical impediments to actually opening a business, that is top priority for sure. But I think it would be a mistake to push these other issues back on the backburner. I mean, you know, just continuing very briefly, the average American family pays $10,000 a year for childcare for one child. Childcare is more expensive than sending a kid to college in 38 states. Every single state in the Union and the District of Columbia fails the government's own definition of affordability in terms of childcare. That is a big problem and it is standing in the way of economic growth. Mr. GARBARINO. I did want to--I have a minute left, but one thing I have also heard, I have a lot of contractors and other, you know, businesses all around, that they are saying the cost of goods, inflation, I mean, they can't bid out projects now and--well, they can bid out, but the bids can't last longer than 3 days because, you know, lumber, everything, steel, everything has been going up. This is for the--maybe Mr. Etkin or Dr. LaRock, if you want to talk about it, or Ms. Airheart. What are we hearing from small businesses now about inflation? How bad is it on their bottom line? Anyone? Mr. ETKIN. Is that directed at me? Mr. GARBARINO. Hello, Mr. Etkin. You can start first. Mr. ETKIN. Well, I can speak of it firsthand. I am in the middle of building a building and we deal with contractors all day about pricing for materials. And it has been shocking to see the price differences in just, like you said, a matter of weeks on steel, on lumber, on availability, on timelines. Part of my business is monitoring the commercial real estate markets. We see projects in all stages going from design to bid to construction. I think we see that in that industry more than any other the impacts of supply chain issues coming out of the pandemic. It is a complex issue. It is not simply policy, but long- term inflation is something that we all need to look at and watch closely. Because as I mentioned before, start talking about trillions of dollars of spending, I think that is at the back of everyone's mind, certainly business owners as well, who have to keep an eye on cost of goods. And so it is certainly something to be concerned about. Mr. GARBARINO. Thank you, Mr. Etkin. My time has expired. Mr. ETKIN. Yes, sir. Mr. GARBARINO. I yield back. Chairman CROW. Thank you. The gentleman yields back. So, thank you to all the witnesses today for this really enlightening discussion. It is something that is actually, unfortunately, more rare than it should be, and this is something called legislating and debating, which I know is a crazy concept for this body sometimes. But it was great. I learned a lot from all of you, so thank you for taking the time. It is clear that the entrepreneurship crisis is one of the bigger challenges facing this Nation. The title of this hearing, ``Jobs, Jobs, Jobs,'' was the title that we came up with because we wanted to be really clear that we want to get people to work. We want to get more people to work and it is not just getting them into jobs, but it is also getting them into great jobs and good jobs. And one of the best ways to do that is to grow new businesses, to expand the economic pie. This is a real challenge, but there is also good news in that this is one of the most bipartisan committees in Congress. We work really well together. We don't always agree on how to get there, but we actually do agree on where we want to be in the conclusion and what we are trying to achieve. And I look forward to working with all of you in trying to figure out these challenges, and the witnesses as well for informing both the staff and the members as we figure this out and have this debate and figure out how we can grow the economic pie and get people to work and really help rebuild the American dream is where we want to be. And, you know, part of that is continuing to have the discussion around the Next Generation Entrepreneurship Corps Act. I will be the first to say that is not--it won't solve the problem, but it is a first step. And if we take the first step we can build on that, we can learn from it, we can get people to work. And this is something that obviously both the House and the Senate in a bipartisan way has come together around, so I look forward to continuing to build support for that bill and others like it that we heard about today. So, with that, I would ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. And if there is no further business to come before the Committee, we are adjourned. Thank you. [Whereupon, at 11:23 a.m., the Subcommittee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]