In Washington, small isn't beautiful

Despite candidates pledging their unwavering support for small businesses, once in office most policies are designed to enhance the profitability of big corporations


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The election is mercifully over. Now the business community waits to see if the president’s anti-business label is deserved. I don’t have to wait. Despite the rhetoric, every president supports big business. That’s not to say that a given president doesn’t make life somewhat difficult for some large companies. But face it: Big business can deploy an army of lobbyists to get what it wants.

Despite candidates pledging their unwavering support for small businesses, once in office most policies – particularly tax policies – are designed to enhance the profitability of big corporations. I’ve long railed against Washington’s hypocrisy toward small business because, as the jobs data illustrates, small business remains the true engine of our economy.

According to ADP, 1.33 million private sector jobs have been created since November 2011. Almost 42 percent of that total was generated by businesses with fewer than 49 employees. Over three-quarters of all jobs created in the last 12 months were created by businesses with under 500 employees.

Companies with 1,000-plus employees -- including the Fortune 500 -- accounted for only 15.5 percent of all new hires. Yet, last I checked, Jeff Immelt, the CEO of General Electric -- a Fortune 500 company -- is the president’s job czar. Makes perfect sense.

It gets more absurd if you also take into account which sized companies jettisoned the most jobs since the downturn.

Again according to ADP, from January 2008 to December 2009 -- the worst period of job losses -- approximately 8.6 million private sector jobs were shed. Businesses with fewer than 50 employees accounted for 25 percent of the total decline. Companies with 50 to 499 employees suffered the worst losses, accounting for 43 percent of the total. Companies with 500 to 999 employees shed 12 percent of the total. And companies with 1,000-plus employees accounted for 20 percent of the total.

Mandate mentality

Let’s review: In the past year, companies with fewer than 50 employees have contributed 42 percent of the new jobs but only accounted for 25 percent of the jobs lost between in 2008 and 2009. Conversely, companies with 1,000-plus employees contributed only 15.5 percent of the total new jobs, while their 2008-09 workforce reductions accounted for 20 percent of all private sector jobs lost.

Now I get it. The president appointed Jeff Immelt job czar because he knows so much about people who have lost their jobs. It’s analogous to hiring a thief to consult on security measures.

This is the type of government mentality that concludes that 50 employees is a good threshold to mandate that a business provide health care coverage. Why not? These companies are rolling in dough. Look at how many people they’ve hired -- or didn’t lay off. Clearly they have a surplus of funds to allocate to health care.

It’s also the type of government mentality that indiscriminately decides that every business should contribute whatever is necessary so that jobless benefits can be extended for what seems to be forever.

Here’s another fact: In the seven years I’ve owned my small business, no successful unemployment claim has been filed against it. Nonetheless, my contribution to the state’s unemployment coffers has increased fourfold over that time.

Given the affinity the government has for mandates, here’s an idea. Mandate that those who are collecting unemployment benefits be required to work for a small business at either no cost or a nominal cost to the business. To take advantage of this resource, businesses would have to agree not to lay anyone off.

That would be a novel and substantive way to support the small business community.

Tony Paradiso of Wilton is an author, professor, entrepreneur, radio and TV commentator. His website is tonyparadiso.com.

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