Congress is threatening to pull the plug on vending machines
By Carla Balakgie
Members of Congress are faced with a choice — pretend the pandemic is over or acknowledge the reality that most small businesses already have – that the rise of the Delta variant has stymied the fervently sought-after return to normal. As passed by the Senate, the bipartisan infrastructure bill threatens to cut an essential lifeline already promised to many small businesses namely last quarter access to the Employee Retention Tax Credit (ERTC).
In early August, the Senate passed its long-anticipated infrastructure bill – a much needed investment in our nation. But as lawmakers negotiated the price tag and bargained to gain the bipartisan support needed to cross the finish line, they offset “cost” by cutting short critical business continuity aid to small employers – eliminating access to the ERTC three months early.
The language repeals the extension made by Congress and the president under the American Rescue Plan, and if passed by the House of Representatives this fall, would make wages paid after September 30, 2021, ineligible for the credit and likely lead to more layoffs.
Vending machine and unattended retail outlets served as an important resource throughout the pandemic, with limited access to relief along the way. First responders, including the medical community, police and firefighters, worked around the clock to care for Americans during the pandemic. And they relied on vending machines and unattended retail for sources of energy — snacks, beverages, and in many cases, the only accessible meal during an intense shift. But the shortsighted move to eliminate Q4 ERTC threatens to pull the rug out from under the very businesses who were there for these essential workers.
Even further, federal and state-mandated shutdowns dramatically reduced serviceable vending locations. Office buildings, and many other locations where machines are typically found remain closed to this day and some into the foreseeable future, eliminating the operating capability of convenience services operators.
These closures have dramatically reduced the primary revenue stream for the industry, and these small business owners have relied on the ERTC to keep the industry’s nearly 160,000 employees on the payroll. Many companies have forgone cutbacks in pay, layoffs or furloughs to keep employees working despite the sustained financial impacts, and it has not been easy with a lack of cash on hand.
According to a recent Goldman Sachs survey of more than 1,100 small businesses, 44% of U.S. small businesses have less than three months of cash reserves, leaving them vulnerable to another shutdown due to COVID-19 or other financial emergencies. The convenience services industry – vending and unattended retail – is no different. Lack of access to the last three months of the program could be the financial breaking point for many of its businesses. Already shrinking profit margins have been reduced to break even, and convenience services, like so many others, has seemingly been forgotten by Congress as aid and bailouts focus on larger industries.
Fiscal responsibility is important, but offsetting costs with the aid promised to small businesses is not the way to achieve it. The ERTC has been a great benefit for the convenience services industry who answered the call to help working Americans during the darkest periods of the pandemic. Cutting off access as the virus continues and uncertainty looms is not only bad policy, but a broken promise to America’s small business community.
Congress should support small business by fulfilling its promise made in the American Rescue Plan and keep the ERTC intact.
Carla Balakgie is the president and chief executive of the National Automatic Merchandising Association. NAMA represents the $31 billion U.S. convenience services industry. By providing advocacy, education and research, NAMA works to promote and protect the industry’s nearly 160,000 hardworking employees. Through traditional vending and micro markets, office coffee and pantry services, product manufacturing and small-drop distribution, convenience services meets the needs of over 40 million American consumers daily at work, home, school and play.
