Mike Dunn’s work duties didn’t always include scrubbing toilets. He is the president of Dunn Lumber, a fourth-generation family business operating out of Seattle for more than a century. But like most businesses in a struggling economy, Dunn’s company is doing everything it can to cut costs, and Friday was his turn to clean the bathrooms.
Dunn’s great-grandfather, Albert L. Dunn, founded the company in 1907. It has never failed to turn a profit. But now, that streak is at risk. Dunn points to an atmosphere of uncertainty at all levels of government — on taxes, healthcare, and a host of economic issues – that is stifling demand for his products. “When rules are changing and taxes are increasing and regulations are increasingly, it causes everyone to pause, and that’s what we’re seeing today, a pause,” Dunn says.
Republican Senate hopeful Dino Rossi and former Secretary of Labor Elaine Chao joined Dunn at his branch in Bellevue on Friday to discuss private sector job creation (or lack thereof). Rossi touted his small business background as a former real estate executive and current member of the Dean’s Advisory Board for the School of Business at Seattle University, and slammed the policies of his opponent, Sen. Patty Murray (D).
“Business owners have no idea what government’s going to do to them; they don’t know what health-care is going to cost, they don’t know about the 2001, 2003 tax cuts, whether they’ll be reauthorized or not,” Rossi said. “For someone to actually invest and grow their business too, they’re going to have to be able to plan two, three, five years in advance, and right now you can’t plan for next week.”
Secretary Chao said jobs aren’t being created in the private sector because businesses lack confidence in Washington, and the Democratic leadership, which includes Murray included as the fourth-ranking Senate Democrat, bears responsibility for this environment.
Of course, Republicans aren’t the only ones critical of the Obama/Reid/Pelosi approach to the economy. A lot of Democrats are running away from the President’s economic agenda this cycle by attacking the stimulus package or calling for all the Bush tax cuts to be extended. Rep. Dan Boren (D., Okla.), a truly rare breed this election cycle – the safe Blue Dog — told NATIONAL REVIEW ONLINE in an interview last month that Obama’s antagonistic relationship with business community has been the biggest shortcoming of his presidency.
Murray has dabbled in advocating fiscal restraint, but it’s hard to take her seriously. In a recent campaign ad, she says: “in these tough times, every penny counts,” a sentiment was nowhere to be found at Murray’s rally with President Obama at the University of Washington, held Thursday. Murray and her fellow Washington state Democrats embraced a message of greater spending, euphemistically described as “investing in the future.” She has repeatedly asserted that the stimulus package and the numerous federal earmarks she has secured have been vital to bringing jobs to Washington state. “I think it’s an indication of [Murray’s] lack of understanding of basic economics – to think that the government creates jobs,” Chao said.
Dunn knows this firsthand. With the prospect of higher taxes looming, he said he wouldn’t be able to hire new workers anytime soon, and just hoped he would be able to maintain his current staff. He also worries about the health-care packages he currently provides, and whether he’ll be able to continue doing so when new restrictions under the health-care reform bill are phased in over the next few years.
Mark Sjolund, manager of the Bellevue branch, has been with Dunn Lumber for 18 years and said the company has always treated its employees like family, and provided a generous health-care plan. Asked if he though he would be able keep that plan, he just shook his head and said “I don’t know.” More uncertainty.
The past couple of years have been especially hard for managers like Sjolund, whose pay is in some ways tied to the success of the company (or lack thereof). As profit’s dwindled, so did end of the year staff bonuses that many employees rely on. Dunn was able to give out small raises last year, but has been forced to cut down dramatically on overtime.Dunn began 2010 thinking it would be a good year. Relative to an abysmal 2009, he predicted that sales would go up at least 10 percent. Instead, same-store sales decreased by six percent. The company is struggling because many of its customers are struggling as well. But even those who can afford to spend in this environment are holding back, waiting for an indication from Washington. The company is constantly bidding on jobs. Dunn says there is plenty of interest, but “not a lot of people are pulling the trigger.”
Sjolund said a majority of the store’s customers potentially fall within the infamous “top two percent” income bracket on which the Democrats want to allow the Bush tax cuts to expire. “It’s very frustrating because those are the people that hire the contractors to work on their place, that hire the laborers, that buy the materials from us,” he said.
All Dunn can do is hope that 2011 will be better than this year. Having Dino Rossi in the Senate would be a good start, he said. When asked what kinds of policies he would like to see out of Washington he preferred a principled approach” as opposed to a “pragmatic ‘we need to fix something’ approach.’” Because businesses, like humans, are pretty good at sorting out their own problems.
“The economy’s quite flexible, and we deal with a lot of waves that come our way from the political system, but as the waves get bigger and more frequent and less predictable, that’s when the boat starts to take on water,” Dunn says.
Speaking of waves, only 11 days until Nov. 2…