Gas Price Hikes Hit Small Businesses

Jul 29, 2011

The rest of Connecticut might groan at summer gas prices, but in Fairfield County, four dollar gas has a whole different meaning. Small businesses especially, pay the price for the county’s transportation woes. WNPR’s Harriet Jones reports.

When gas prices spiked this year, and gas was more than $4.30 a gallon in southwest Connecticut, the help wanted ads began going up all over Fairfield County.

“It’s killing small businesses – I think it’s killing large businesses too. And it compounds an issue that already existed in Fairfield County, which is how to get here.”

David Lewis runs Operations Inc, a Stamford-based company that provides human resources services to small and mid-sized businesses in the county. He says many people on a low wage have to commute into the region.

“Service businesses really hurt, because paying $10, $15 an hour to get people to work in this area… you either have to be living with your parents or you have to be living in a one-bedroom apartment with four other people to be able to afford that.”

And for all those others who live elsewhere and commute in, idling in traffic at more than four dollars a gallon can be a tipping point. Even for a company that pays well, the county’s transportation problems are front and center.

This is Design Within Reach. The stylish modern furniture company moved its headquarters to Stamford from the West Coast last year, and just opened its first store in the city. CEO John McPhee says there’s lots of things to like about Stamford, but I95 isn’t one of them.

“A young associate, she was working as a receptionist, I think it was one of her first jobs. And she lives in Bridgeport, which is only 15 miles from here, but there were days when it would take her an hour, an hour and 15 minutes to drive to work on 95, so it didn’t make sense for her.”

Marcella Barry is in charge of human resources for Design Within Reach. She says to ensure that they can hang on to talented staff, the company’s coming up with creative ways to combat the problem.

“What we’ve done is we’ve put together programs to help employees. We have summer hours, so that employees can adjust their hours so that they’re beating the peak times that they’ll be out in traffic, and we also have lots of flexibility built into the organization.”

Transportation has a significant effect on real estate in the county too. Ashok Vasudevan runs Preferred Brands, a mid-size international foods company in Stamford. He’s looking to move his corporate offices this summer, and he says high gas prices will dictate their next location.

“If we have to move when this lease expires, which we probably will, then the two mandates we’ve asked our broker to follow is, number one it has to be ideally walking distance from the train station. And two, if it is not a walking distance then we have to have a shuttle.”

But here’s the catch. If you want to rent anything near a train connection in Fairfield County, be prepared to pay through the nose.

“If we chose something downtown, we’re looking in the high 30s today per square foot, and if we decided to go even three miles, two miles away, we’re looking at the 20s. So we’re talking about a significant chunk of change.”

Possibly as much as $3,000 more per thousand square feet each month. For some, high gas prices just make them want to stay home altogether. Jonathan Kinzler’s company, American Interactive Marketing, places ads for Telecommute Connecticut, the state’s work-at-home resource for employers.

“As the gas prices started increasing and as we noted the big increase starting in about May, there was a pick-up in the interest and the response to the advertising that we were running at that time.”

In fact he says, when gas prices hit their peak, he saw more than 35 percent increase in people clicking on Web ads for the campaign. Kinzler’s own company is completely virtual – he doesn’t rent office space, and he says relying on technology helps him recruit talent.

“I work with people who are located as far away as Rhode Island and as far away as New Jersey. But there’s a number of people who I work with right here in Connecticut, but they’re not local within 5 or 10 miles, they’re in New Haven, they’re in Hartford. “

Whether the virtual office is the wave of the future might depend on how much you’re prepared to pay for your next fill-up.

For WNPR, I’m Harriet Jones.