Small Business Majority Blog

Small Business Matters

Small Business Majority CEO John Arensmeyer

Statement by John Arensmeyer, Founder & CEO of Small Business Majority, regarding data released Wednesday by ADP showing small businesses continue to drive job growth in the United States

Today’s employment report from ADP once again shows the smallest businesses—those with 1-49 employees—continue to outpace large businesses in the race to put America back to work. With 102,000 jobs created by small businesses in October, it continues a trend going back to January 2011 of positive job growth among our nation’s primary job creators.

However, the hole dug by the recession was deep and wage-growth has remained stagnant. Small businesses could be in an even stronger position economically if policymakers in Washington cross the partisan divide that has paralyzed them for so long and move on smart economic policies like those outlined in Small Business Majority’s Economic Agenda for America’s Future. These policies include solutions to near-term challenges, such as shoring up additional capital for small businesses through final crowdfunding rules, to strategies for long-term growth through comprehensive tax reform and strengthening the nation’s infrastructure.

Over the last two years small businesses have been hurt by the historic level of gridlock in Washington. According to the Pew Research Center, we are on pace to see one of the least productive Congresses in history. That is not what small businesses need. Two more years of this type of inaction will have dire consequences not just on small business, but our economy as a whole.

Small businesses are concerned about access to capital, a fair tax codeimmigration reform, finding and retaining skilled workers, a healthcare marketplace that works, and greater demand for their goods and services. Now with the mid-term elections behind us, they need the new Congress to take those concerns to the House and Senate floor. Small businesses and our economy need lawmakers to stop talking about helping small businesses and start acting on policies that level the playing field for small firms and put them in a position to thrive and grow.

John Arensmeyer is the Founder & CEO of Small Business Majority, a national small business advocacy organization, founded and run by small business owners, to support America’s 28 million small businesses. In September, Small Business Majority released its “Economic Agenda for America’s Future,” a set of short and long-term policy recommendations government leaders can follow to ensure an environment where entrepreneurs, and our economy, can thrive.

At 1,300 members strong and representing more than 50,000 jobs in the Central Valley region of California, the Greater Bakersfield Chamber of Commerce is a heavyweight small business champion.

Since 1920, the Bakersfield Chamber has provided leadership, business education and networking opportunities to ensure a healthy business community, said Cynthia Pollard, president and CEO of the chamber.

The chamber offers a number of events catered to Bakersfield’s business community. One of the most popular is the Good Morning Bakersfield breakfast series, which takes a look at important issues currently affecting the community.

Pollard noted everything from hydraulic fracturing to finances has been covered in these quarterly events. The upcoming breakfast on November 10 focuses on the county hospital.

In efforts to educate members and business leaders, the chamber holds regular seminars where topics including social media, HR and workplace safety policies are discussed, while networking expos help connect business and community leaders to other organizations.

One of those organizations just happens to be Small Business Majority.

“We look for other businesses, entities and organizations that are pro-business, with common goals and common causes,” Pollard said. One of those common causes for the Bakersfield Chamber and Small Business Majority is immigration reform. Immigration reform would make it easier for local businesses to hire the 81% of California’s more than 10 million immigrant population who are working age adults and would help attract a more highly-skilled foreign workforce.

Immigration reform isn’t the only issue the chamber advocates for. “A government review council monitors and advocates on issues important to local businesses such as education, healthcare and taxes,” she said.

“[The chamber] advocates regularly on all levels on these issues trying to make sure that what’s passed and implemented isn’t going to negatively impact business,” Pollard said.

One of the most effective and successful programs the chamber sponsors is another breakfast series that focuses on networking opportunities for small businesses, where representatives from bigger businesses come to talk to them about ways they can do business together.

“There have been some real business connections and business leads and contacts that have come out of that program,” Pollard said.

With all of the hard work the Bakersfield Chamber does, they are seeing tremendous positive impact on the local business community.

“What we’re finding is that our businesses are optimistic,” Pollard said, commenting on a recently completed member survey that found 88% of chamber members say they value or extremely value what the chamber offers in comparison to annual membership dues and investment.

“Our goal at the end of the day is that we have helped create a stronger local economy by helping to retain and grow businesses that are here.”

There are many complex policy issues that have a major impact on the small business community. Each week, we’re going to help break one of those issues down so small business owners can stay in the know and remain aware of their stake in these national issues. This week’s Issue Q&A is on tax reform.

Q: How will corporate tax reform help small businesses?

A: The current corporate tax code contains tax loopholes that favor large corporations, while placing smaller companies at a disadvantage. According to our scientific polling, four in five small business owners support reforming the corporate tax code and closing corporate tax loopholes, or inversions, which allow big businesses to relocate their base overseas for tax reasons. These inversions harm small businesses and closing them would create a much more level playing field.

Q: What steps can be taken to reform the tax code and level the playing field for small businesses?

A: The nation needs a tax code that creates opportunities for small businesses and encourages startups and entrepreneurs. There are many other steps that can be taken to achieve this goal:

  • Ensuring parity between online and brick-and-mortar businesses with a reasonable Internet sales tax solution will bring about a fairer tax code.
  • Simplifying and expanding the small business healthcare tax credit so more small companies can provide coverage for their employees will bolster small businesses to compete with larger businesses for top-tier talent.
  • Cracking down on the ability of large corporations to reduce their tax burden by simply moving their headquarters outside the country will ensure a more level playing field.

Q: Is there any current legislation under consideration that would help reform the tax code and benefit small business?

A: Yes! The Marketplace Fairness Act could settle the issue of parity between online and brick-and-mortar stores for good. The act would require online retailers to collect sales tax from customers in states where the retailer has no physical presence and remit them to each customer’s state. With a small business exemption for online sellers making less than $1 million annually, this act would level the playing field for brick-and-mortar stores while delivering additional revenue to state and local governments.

The Small Business Tax Relief Act, passed by the House in June 2014, would improve a crucial part of the tax code for small firms and give small businesses more financial confidence, promoting increased investment. The act would allow small businesses to deduct the cost of purchasing new equipment up-front, enabling business owners to maximize investments for their company, expand and create jobs.

Finally, the Small Business Jobs and Credit Act, passed in 2010, should be extended permanently to allow self-employed individuals to deduct the cost of healthcare from their income. These entrepreneurs currently pay 15.3% more in taxes because they are self-employed. To achieve true tax equity, the self-employed must be able to exclude health insurance premiums from self-employment tax.

Small Business Majority CEO John Arensmeyer

Originally published in The Huffington Post

Despite growing support for raising the minimum wage, Congress has yet to even vote on legislation that would raise the federal minimum wage to $10.10 and index it to the cost of living. As a result, many states are taking matters into their own hands. In fact, a whopping 34 states considered increases to their state’s minimum wage during 2014 legislative sessions. What’s more, 11 states and D.C.–Connecticut, Maryland, Michigan, Minnesota and West Virginia to name a few–have all enacted minimum wage increases this year. If you believe the hype surrounding raising the wage, this should put small businesses in these states out of business, right? Wrong.

Research shows a majority of small business owners support raising the minimum wage. Small Business Majority’s scientific opinion poll found nearly six in 10 small business owners support increasing the minimum wage and adjusting it annually to the cost of living. And more than half believe increasing the minimum wage will boost consumer demand, helping small businesses grow and hire. And small business support for raising the wage has been steadily growing. More recent polls show results ranging from 61 percent to two-thirds of small business owners support increasing the minimum wage, and a poll of all employer sizes found growing support within the business community for raising the minimum wage.

Small business owners recognize the benefits to their business and local economies when lower-wage workers have the money they need to spend on essential goods and services at small businesses. That’s why many support their state’s efforts to raise the minimum wage and adjust it yearly to keep pace with inflation.

Here’s what small business owners are saying firsthand about raising the minimum wage.

“Many of the customers we serve are minimum wage or low-income employees,” said Mitchell Josim, co-owner of Windy City Eyes in Chicago. “Raising the minimum wage would put more money in their pockets to spend on products at our store and at other local businesses in the community.”

“I pay all of my employees well above the minimum wage, including entry-level workers,” said Rolf Poeting, owner of Glassautomatic, Inc. in Mount Pleasant, Penn. “A workforce that is able to live off their wage is a happy workforce, and it in turn helps us retain the top talent around.”

“Getting minimum wage workers a decent raise would allow these folks to stimulate the economy,” said Martine Laguerre, owner of Fuzzyannie Cleaning Services LLC in the Bronx. “Minimum wage workers do much of their shopping at small businesses. If they had more money to spend, it would help boost local communities and be great for small businesses.”

Entrepreneurs know their businesses succeed when their communities thrive. That’s why we just released a series of online guides to help small employers understand how efforts to raise their state’s minimum wage would impact their businesses, and the state’s economy on the whole. Business owners in IllinoisWisconsinPennsylvania, and New York will be able to use the websites to send comments directly to lawmakers to show them how real entrepreneurs feel about this issue.

A vast majority of small businesses already pay their workers more than the minimum wage, and many small employers feel it’s the right thing to do. We also know small business owners’ No. 1 concern is consumer demand. State lawmakers should continue to listen to small employers and raise their minimum wages to help small businesses, our workers and the economy.

To learn more about what real small business owners are saying about raising the wage, check out their testimonials and find links to our state websites through www.smallbizsayraisethewage.com.

There are many complex policy issues that have a major impact on the small business community. Each week, we’re going to help break one of those issues down so small business owners can stay in the know and remain aware of their stake in these national issues. This week’s Issue Q&A is on workplace nondiscrimination.

Q: What does workplace nondiscrimination cover?

A: Workplace nondiscrimination entails protecting workers from discriminatory hiring or firing practices, and overall treatment within the workplace. Currently, federal law prohibits discrimination based on gender, sex, age, race and color, but does not include sexual orientation or gender identity.

Q: Why is this an important issue for small businesses to consider?

A: The vast majority of small business owners don’t know that it is still legal under federal and many state laws to fire or refuse to hire someone because of their sexual orientation. A striking 81% of entrepreneurs said this practice was illegal under federal law according to our scientific polling, and only 9% knew that these discriminatory practices are still in fact legal. The fact that these laws prevent many small businesses from attracting and retaining the best talent around impedes the bottom lines of many small businesses and prevents them from growing their company, solidifying their workforce and creating more jobs.

Q: Where do small businesses stand on workplace nondiscrimination?

A: More than 2/3 of entrepreneurs believe federal law should prohibit employment discrimination against LGBT people. Seven out of 10 in states without such policies agree their state should adopt a law prohibiting this discriminatory practice. Small business owners also strongly believe an employer should not be able to fire or refuse to hire someone due to their sexual orientation based on their personal religious beliefs. 63% believed that a worker’s sexual orientation is not a basis for termination if working with them conflicts with their employer’s religious beliefs. Meanwhile, 70% believe a business should not be legally allowed to refuse services to some customers, but not others, based on religious beliefs. Small business owners agree overwhelmingly that laws protecting workplace nondiscrimination are good for business and the right thing to do.