Small Business is Big Business in 2012 Presidential Election

By Rhonda Campbell

Small business took center stage at the first 2012 United States presidential debate. Considering the fact that small businesses comprise 99.7 percent of the employers in the United States, it makes good sense to spotlight small businesses during the election. But, that’s not the only reason. Considering the amount of “bail out” money businesses that were supposedly “too big to fail” received from American taxpayers after the 2007 recession (a history-making recession some of these same businesses helped to cause), it may be fitting that small business be at the center of the debates. After all, small businesses don’t get “bailed out.” They thrive, struggle on their own or fold. For them, there is often no safety net.

Small Business Owners Non-Employee Workforces

If entrepreneurs at the helm of small businesses make poor executive decisions, they must generally suffer the consequences alone. Even when small business owners apply for small business grants, they may end up competing for the money with large businesses that somehow find ways to meet eligibility criteria for grant money that’s been set aside for small firms.

During Wednesday, October 3, 2012 presidential debate, President Obama and Mitt Romney mentioned “small business” 29 times according to the Huffington Post. Yet, neither clearly outlined the specific steps he would take to grow small businesses. Reason for this may, in part, go back to the “too big to fail” idea. Fact is, according to the Small Business Administration, 54 percent of small businesses are home-based businesses. Only 21.5 percent of small businesses are employer firms, meaning the majority of small businesses don’t have employees on the payroll. Of course, it is not uncommon for these non-employer small businesses to outsource work to independent contractors and freelancers.

As the numbers of freelancers and independent contractors grows, agencies like the United States Department of Labor’s Bureau of Labor Statistics may have to start tracking the numbers of small businesses that provide income to freelancers and independent contractors in order to get a more accurate picture of the numbers/percentages of workers small businesses pay an income to. For example, small business owners hire skilled workers like web designers, web developers, freelance writers, photographers, public relations specialists, customer service representatives, tax consultants, accountants, virtual assistants and customer service representatives on a contract basis. These workers don’t show up on small business payrolls, making it appear as if small businesses don’t play a significant role in the country’s employment statistics.

But, asks independent contractors and freelancers who receive all of their income from small businesses if this is the case and you might get a definitive “no.” These skilled workers depend on small businesses to pay them wages that help them meet their personal or family expenses. Perhaps it’s time to put more emphasis on companies that strengthen the economy by paying wages to contractors and freelancers. Again, as the workforce continues to change, it may be the only way to get an accurate picture of just how much small businesses fuel the economy. As of now, one thing is clear. Small businesses may pay more Americans salaries that don’t fall under the “employee” category than shows on record. Small business owners might be pushing more money back into the economy than current statistics show.

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Sources: (Huffington Post: Presidential Debate, 5 Small Business Facts Romney and Obama Conveniently Omitted) (Small Business Administration: Frequently Asked Questions)

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