Policymaker To-Do List for 2014: Fortify Small Business and Middle Class
Originally published in The Huffington Post
Every year around this time, we think about what the year ahead might bring and how we can make it better than the last. To make 2014 a success, we must find ways to bolster our still-recovering economy. Supporting the middle class is one way to do that. A recent study indicates income inequality is at the highest it’s been in 100 years, with the top 10 percent of earners taking more than half the country’s total income in 2012. In order to close this immense income gap and strengthen our economy, America needs smart policies that will help grow the middle class, and small businesses need to be top-of-mind when crafting these plans.
Entrepreneurs know firsthand how vital the middle class is to our economic recovery. Their primary customer base is made up of middle class individuals and the vast majority of small employers themselves are middle class. In fact, Small Business Majority’s recent polling found only 5 percent of small business owners reported earning more than $250,000 a year, and research conducted by the Ewing Marion Kauffman Foundation reveals that seven in 10 entrepreneurs come from a middle class background.
Small businesses are the backbone of our economy and the key to our financial recovery after the Great Recession. We know from our polling that consumer demand is the top concern for small business owners, and one of the best ways to create that demand is to strengthen the middle class. According to the Public Affairs Council, 68 percent of respondents say they prefer to shop at local small businesses. But in order to get more people into local stores and restaurants, we need smart economic policies that support our nation’s job creators and their middle-class customer base.
Reforming our Broken Immigration System
Small businesses believe our immigration system is broken and they support comprehensive immigration reform that would help grow the economy. Our polling found small employers believe creating a path to citizenship is the most appropriate solution for handling our country’s 11 million undocumented immigrants. Three-quarters agree with the Senate’s plan to turn them into taxpayers — which would add $1.5 trillion to the economy over the next 10 years and produce a net increase in tax revenue of $4.5 billion to $5.4 billion in the first three years alone.
Immigration reform would give a much needed boost to our economy and encourage a robust and diversified business sector by increasing the number of pathways for immigrants to come to this country and stay legally. Everyone benefits when we encourage hard-working people to bring their skill-sets to the U.S. and let previously undocumented immigrants legally join our workforce and contribute in a meaningful way to our middle class economy.
Finding Long-Term Solutions to our Budget Crisis
Our opinion polling has shown that strengthening the economy has been small business owners’ top priority over the past couple years. They believe our current process for raising the debt ceiling not only threatens the U.S. credit rating but allows politicians to hold the economy hostage to their own spending priorities. Unfortunately, lawmakers’ short-term fix for the debt ceiling means we’ll be back to square one in February when the nation reaches its debt limit again. And while small business owners recognize the need for a solution to this issue, they feel any plan must also provide long-term support for job creation and the economy.
The Great Recession had a detrimental effect on job stability and income for our nation’s middle class. According to a study conducted by the National Employment Law Project, three-fifths of all jobs lost during the recession paid middle-income wages, and three-fifths of all jobs gained during the economic recovery pay low wages.
The small business community is the engine that drives growth and job creation, benefiting both the economy and the middle class. Policymakers should listen to small business owners and level the economic playing field. It’s the right thing to do for small businesses, their employees and our economy.