Corporate America wants to hire workers aggressively as the US economy races back to life following the pandemic.
The Business Roundtable, an influential lobbying group comprised of top US executives, said Wednesday that its CEO economic outlook index has climbed to the second-highest level on record, behind only early 2018 when the Trump tax cuts were enacted.
Companies are even more eager to hire workers today than they were following that tax windfall. The influential executive group said the sub-index measuring CEOs’ plans for hiring surged to a record high during the second quarter.
Some companies, including manufacturers and restaurants, have complained of a shortage of workers. The United States has a record number of job openings, which totaled 9.3 million as of April.
Business leaders also have ramped up their plans for capital spending and expectations for revenue. CEOs are now projecting the US economy will grow at a brisk annualized pace of 5% this year, up from just 3.7% previously.
“CEO optimism near historic highs, particularly with record hiring plans, is a strong sign that we are climbing out of this unprecedented crisis,” Walmart CEO Doug McMillon, who serves as the chairman of the Business Roundtable, said in a statement.
McMillon hailed an “extremely successful vaccine rollout” in the United States that was the result of American innovation and a collaboration between business and local, state and federal government.
The unemployment benefits question
The Business Roundtable also urged the White House and Congress to allow enhanced unemployment benefits to expire in September.
Asked by CNN Business about the worker shortage, Business Roundtable CEO Josh Bolten said during a press briefing that the $300 boost to unemployment benefits are “keeping something of a lid on the overall supply of labor,” especially for lower-paid positions.
Bolten, who served as chief of staff to former President George W. Bush, also cited health concerns as well as childcare issues caused by the closure of schools and daycares.
“One of the things we would ask government to do is let those extended unemployment benefits expire as they are scheduled to do in September,” Bolten said. “Most of our companies are hiring and they want to bring workers off the sidelines.”
Earlier this month, President Joe Biden stressed that enhanced benefits won’t be extended. Many Republican-led states have already terminated the benefits.
Raytheon Technologies CEO Greg Hayes said there is increased competition in hiring, but no shortage of the highly skilled workers his company needs.
“We haven’t had a real problem in hiring,” said Hayes, who chairs the Business Roundtable’s tax and fiscal policy committee.
But Hayes did express concern about rising prices for raw materials, including steel, copper and other components.
“The hope, of course, the hope of the Fed, is that this is transitory,” Hayes said.
The Raytheon CEO added there is uncertainty over whether this will last six to 12 months or if the United States has “unfortunately gotten into an inflationary cycle.” Hayes said he hopes rising prices will get cut off “before it becomes an inflationary spiral.”
Hopes for an infrastructure deal
The Business Roundtable also expressed optimism that Washington can reach a bipartisan agreement on infrastructure that avoids raising taxes on corporations.
Bolten praised the bipartisan infrastructure framework as an “excellent starting point for real legislation” that would “bring our crumbling infrastructure up to modern competitive standards.”
“We are hugely supportive,” the Walmart CEO said during a press briefing, adding that the influential business group is “pushing hard” to convince lawmakers.
“We remain optimistic that members on both sides of the aisle and administration can craft a bipartisan bill that meets the needs of the economy and has real benefits to Americans,” Bolten said.
But the group reiterated that it remains strongly opposed to efforts to unwind the Trump tax cuts. The Biden administration has proposed raising the corporate tax rate from 21% to 28% to pay for its bold domestic agenda and address inequality.
“We would be completely uncompetitive with our foreign competitors,” said Hayes.
The chairman of the Roundtable’s tax and fiscal policy committee warned that higher corporate taxes would hurt job growth and cause companies to delay investments.
“This uncertainty is a dilemma for many of us as we think about the next five, ten, 15 years,” Hayes added.
However, the Raytheon CEO said the 15% global minimum tax that the G7 recently agreed to “has some appeal.”
“Having a consistent tax globally would be beneficial to US multinational companies,” he said.