Everyday, as I watch the national news, everyone is talking about jobs, jobs, jobs, but small businesses are conspicuously absent from the discussion.
According to the latest U.S. Census Bureau data, small businesses are responsible for creating over 90% of net new U.S. jobs. Independent organizations like the Kauffman Foundation have found that small businesses created virtually 100% of all net new jobs created since 1980. That means Fortune 1000 firms have not created one net new job in America in over thirty years.
The Small Business Administration’s Office of Advocacy points out that small businesses employ over half the private sector workforce, are responsible for over half the gross domestic product and 97.5% of all U.S. exporters. To boot, small businesses also employ at least 43 percent of all high-tech workers and produce 16.5 more times the patents per employee than large patenting firms.
The fact that real unemployment (the U-6) is pushing into the high teens seems to be a pretty good indication that President Obama’s economic polices are a dismal failure.
If President Obama and Congress were serious about creating jobs, it would be simple for them to do; they could support small businesses.
Step one is for the President to keep his campaign promises, starting with his 2008 promise to “end the diversion of small business contracts to corporate giants.”
The Small Business Act, which mandates that 23% of the total value of all federal contracts be awarded to small businesses, is probably the most cost effective economic stimulus and job creation program in U.S. history. Unfortunately, a series of federal investigations conducted since 2003 have found that, in the last decade, hundreds of billions of dollars worth of federal small business contracts have been diverted to the very Fortune 1000 firms that haven’t created one net new job since 1980.
Secondly, President Obama can reinstate the nation’s oldest and most successful federal program for directing infrastructure spending to minority-owned small businesses, which his administration has allowed to be dismantled.
On September 9, 2011, his administration announced final plans to eliminate the Pentagon’s 5% minority-owned small business contracting goal. This means that the nation’s first African American president and first African American attorney general will preside over the elimination of a program that stemmed from the activism of Martin Luther King and historic Civil Rights Act.
President Obama administration just released his proposed FY 2013 budget, which included funding for the Small Business Administration that is less than the SBA budget was over 30 years ago when Ronald Reagan was President— even before you adjust the figures for inflation.
This news comes less than a month after President Obama announced plans to close the SBA by combining the agency with the Department of Commerce. If the consolidation gains approval from Congress, the SBA will cease to exist.
So the third thing the Obama administration and Congress can do to create jobs is stop the President’s proposal to close the Small Business Administration.
The notion that he is going to save 3 billion dollars over a decade by combining the SBA and Commerce is ludicrous. The two federal agencies are diametrically opposed— the commerce department exists to represent the interests of large businesses, the same large businesses that have worked for over 30 years to eliminate the SBA and allow large businesses to hijack every last penny of federal small business contracting dollars.
It’s the same thing that Reagan tried to do when he was in office, and more recently former President George W. Bush – who attempted to starve the agency by slashing the budget.
In the middle of the worst economic downturn in more than 80 years, these anti-small business policies from the Obama administration are the last things we need.
Instead, we need to reopen every SBA office Bush closed, rehire every SBA employee that Bush laid off, quadruple the SBA budget and expand every federal program for small businesses— the nation’s chief job creators— and not eliminate these programs in the guise of saving an infinitesimal 3 billion in a decade.



8 Comments




as much as it pains me to say this…it seems like some things never change…perhaps if there was some kind of serious campaign finance reform (HA! after citizen’s united I am sure it will never happen) then our elected officials will no longer be beholden to special interests. I lost hope for President Obama to keep his promise to help small business contractors when he, after claiming that no lobbyist would work in his administration, appointed William Lynn as Deputy Secretary of Defense in charge of the Pentagon’s procurement. Lynn was the former chief lobbyist for Raytheon…enough said…
by the way…keep fighting Lloyd, you and the ASBL are the only ones speaking the truth about what is going on in the small business contracting world…as an optimist, I believe that you can make the difference…
If you remove the words “can only” from your title, I would agree with your main premise. Have you heard of the Jefes, Argentinian Jobs guarantee program?? We need to offer jobs to anyone who is unemployed as we did under WPA, CCC, CETA. Most of the Argentinian programs workers were women; most of the jobs created served their communities. The program cost never exceeded 1 % of the country’s GDP. Workers were also empowered to start their own businesses. Most of the new hires were from the lowest two income quintiles. Jefes effectively provided jobs to rural areas which had been difficult to develop.
I have been a small businessperson twice.
The single biggest thing that would help help every small business owner and employee is affordable healthcare. We’re all still hanging on by our fingernails for 2014 and the exchanges, assuming they survive all the right wing assaults on healthcare.
All small business people should coalesce into a strong and united force for Single Payer Healthcare. Only then you will see the number of small business explode and become the employment engine for the future.
Aside from that, I agree with your post.
Possibly only tangentially related:
My NBA worshipping Mayor (Kevin Johnson) has a plan to fund the construction of a new downtown arena in hopes of convincing the NBA of keeping the Kings in Sacramento by privatizing our municipal parking – for 50 f’ng years. It’s hard to list all the reasons that this is bad, but the local businesses are goning to be screwed because who would want to come to mid-town or downtown to park at ver-increasingly excessive rates when parking’s free at the WallMart, Target or other suburban shopping centers.
There are no end of lovely, small businesses both new and old that rely upon excellence in service and uniqueness of offerings. But there are currently 25 businesses that are vying to get on the short list of possible candidates and of course all the familiar bank-like entities who hope to package the deal.
Parking revenues are a primary revenue stream for all manner of services, and sure the employees are unionized and benefitted – so the Mayor gets a 2-fer.
1% doesn’t give a damn about small business.
Short of the government giving small business billions of dollars to HIRE people, there is not much small biz can do to help the present sitch as is.
What IS needed is sweeping HUGE federal based jobs and jobs programs that will put MILLIONS to work ASAP.
In THAT process, small businesses will be needed for any number of purposes, and they can then begin to recoup and expand, including hiring new labor.
But first, massive federally funded jobs and jobs programs, which will IMMEDIATELY generate a huge amount of taxes.
Along with that, increase corporate taxes and taxes on the wealthy to 1970′s levels.
Small business is essential, but it’s not to be carved out at the expense of the masses of millions and millions of under and un employed.
Small businesses will rise as people go to work, have money, pay taxes and buy more goods and services.
In the meantime, we’re all fucked, for the most part because ANY hope of changing or influencing our system to better the masses is pure unicorn rainbow glitter shitting wishful dreaming.
This system will either collapse of its own volition, crash due to Mama Nature (global warming, food supplies, water supplies, weather) or the masses will revolt (which will be incredibly bloody and who KNOWS what might emerge, but the US will not emerge whole, it’ will break up like USSR did).
So, while I appreciate the lovely pitch to help and save small business in America, my tears and fears are shed with the masses that are homeless, hungry, without shelter, food much less jobs.
N the ranks grow daily, people.
There will NOT be affordable healthcare, only corporate owned healthcare insurance and care.
There is NOTHING this present situation offers with respect to change that would better the masses OR small business.
We, the nation, our government from Judiciary, Executive, Congress down thru every state, county, city and town political position elected or appointed are owned and controlled by the corporate fascist 1%.
They own every facet of our life, from birth to death and beyond (once you die your debts will be collected from remaining relatives, trust me).
So, there will NOT be affordable healthcare and there will be NO legislation changing contracting and there will be no massive jobs programs to put MILLIONS UPON MILLIONS back to work (which in and of itself would boost small business a hundredfold further than contracting legislation or affordable healthcare insurance).
Small business is a side bar, the ONLY issue that matters is the burden on the masses, until that is relieved small businesses will continue to suffer and collapse.
N that’s just how it is.
Yep, well chronicled Laura . . . it’s a fucking farce this whole arena deal and it’s side bar issues like the parking.
Pure scam for the 1%, and entertainment for those who can afford $100 tickets, $15 beers and such at a game.
For the masses, watching and paying for pro sports beyond the pricing of RiverCats Triple A baseball (without a job I can’t afford a game there, either) is impossible.
Sacto needs jobs, not a give away to the Maloofs and their developer buddies in the region (whom KJ covets and hearts all to hell).