Sequestration and the retail world
Brent Renneke, Managing Editor
February 22, 2013
Filed under Brent Renneke
With the lack of agreement in U.S. Congress, the $85 billion in automatic budget cuts known as sequestration may hit the economy in about eight days. And many are wondering what this could mean for small business.
At first glance, it appears the most-affected small businesses would be those that work directly with the government, primarily those with federal contracts related to defense, which will be hardest hit with the possible budget cuts.
Luckily for our industry, the majority of OEMs and dealers in the boating industry do not have much direct federal interaction; however, it is still unknown how the loss of federal income for many would affect commerce activity.
There are many businesses that depend on the retail activity of many who would lose their job due to the cuts, and, according to recent testimony at a hearing in the U.S. House of Representatives, the loss of jobs in industries like retail, restaurants, construction, etc., would total 958,508. It is an alarming number, and it is especially concerning when you wonder how many of the newly jobless would be customers of the marine industry.
Also, the Pentagon has already announced furloughs that would require employees to take forced leave one day a week starting the last week of April and lasting for 22 weeks. Assumedly, this would be one of many similar budget cuts if sequestration occurs.
Ideally, however, the overall impact of the cuts already announced and those to come will never be realized.