Chronicle business columnist Thomas Lee should be embarrassed to have his name grace “Debunking the moral superiority of ‘small businesses’” — a column clearly written by someone who doesn’t understand small businesses. Our groups don’t always agree on policies affecting small businesses, but we do agree that small businesses are the foundation of our economy, and lumping them into one narrow, ideological box buys into a long-standing myth that many in the political sphere would have everyone believe.
The unfortunate truth is that lawmakers often advance policies that favor large corporations over Main Street. And here’s where Lee missed the boat: the good reputation of small-business owners is often hijacked by these very lawmakers to justify policies that have no benefit to, and in some cases harm, America’s entrepreneurs.
Small businesses are politically, socially and economically diverse. While they want to be heard on the issues that are important to them, they are hardly monolithic in their views. Lee buys in to the false notion that small-business owners are lockstep in their support of policies — a view unscrupulous lawmakers and lobbyists have spent a long time trying to foster.
Let’s debunk his points:
•He calls small businesses “just another special-interest group with an agenda — whether social or economic.” Small businesses too often find their needs being subordinated to those of big business. For example, the tax loophole that allows big businesses to relocate their base overseas to avoid taxes allows large companies to undercut small businesses on cost — an enormous advantage. Yet, when it comes to remedies, politicians often claim small businesses would be hurt by the very changes that would fix it. Why? It all comes down to money. In the 2014 midterm elections, deep-pocketed corporations, and the special-interest groups they support, shelled out hundreds of millions of dollars to elect candidates to office who might push policies that help their bottom line. But small businesses have limited resources, which means they can’t compete with large businesses when it comes to campaign donations. Sure, politicians love to tout their small-business support, but in reality that support has become little more than a feel-good bromide they use to check a political box.
•He also gets it wrong when it comes to small businesses’ impact on the economy. Lee argues that the long-held belief that small businesses are our nation’s biggest job creators has been misrepresented. To that we say, small businesses represent more than 99 percent of employer firms. They employ half of all private-sector employees and they pay around 40 percent of the U.S. private-sector payroll, according to the Small Business Administration Office of Advocacy. And last year, ADP Research Institute found small-business job creation outpaced that of big businesses — a trend that isn’t unique to 2014.
Frankly, it’s counterproductive to attack the potential of a powerful economic force that can help bolster the economy as a whole. Small Business Majority’s opinion polling found 82 percent of small-business owners already pay more than the minimum wage and 55 percent offer health coverage to their employees — even though 96 percent have no obligation to do so under the new health care law.
Small employers recognize the importance of nondiscrimination policies because they help companies attract and retain bright employees and because it’s simply the right thing to do. In fact, the majority of small businesses support enacting federal and state policies protecting all workers from discrimination, regardless of sexual orientation or gender identity.
It’s unproductive to try to downplay our nation’s job creators as just another group lobbying politicians for their special interests. Instead, take issue with those trying to appropriate small businesses’ good name in an attempt to gain political points and pass harmful policies. Let’s give our nation’s entrepreneurs the respect they deserve.
John Arensmeyer is the founder and CEO of Small Business Majority. Claudia Viek is the CEO of the California Association for Micro-Enterprise Opportunity.