“A myth has nothing specific to propose and gives no reasons for what it asserts…we can tell that a given account is a myth not by the amount of truth it contains, but by the fact that it is believed to be true.” -Henry Tudor, Political Myth (1972)
Myths are rampant in politics these days, and perhaps none more so than the notion that conservatives are donning cape and sword to heroically defend the interests of small businesses. But as someone who has run three such ventures in Houlton, I know that when you move beyond the superhero narrative, actions and outcomes tell a very different story. And I firmly believe that a progressive agenda for small businesses would bear much more fruit for my fellow entrepreneurs.
When I speak about my progressive activism, I always share that it started with my experience as a small business owner. In 2016, as a direct result of the Affordable Care Act (ACA), I was able to leave my job in the software industry – and with it, my employer-subsidized health care plan – to purchase a little restaurant in Houlton’s historic downtown with my husband. We weren’t alone in this newfound freedom to pursue an entrepreneurial venture: “unlocked” from the need to stay in a job simply for health care coverage, many people were at liberty to pursue the dream of opening a small business.
And then Donald Trump was elected, carrying his promises to “repeal and replace” the ACA to the White House. His position was enabled by Americans’ dismal lack of knowledge about health care.
As small business owners, though, my husband and I did understand, and it is impossible to describe the fear that we felt during that time. If the ACA had been repealed, our cost for life-sustaining prescription medications alone would have been over $3500 a month, something that was simply unsustainable for owners of a 40-seat restaurant in a rural part of Maine. To mitigate the insecurity and risk, I returned to a job with benefits, and we made the difficult decision to shutter the restaurant in November of 2017, laying off six employees. (We still maintain another small business, a goat farm and state-licensed creamery.)
Although Trump’s plans never came to fruition, this experience was a “mythbuster” – my first indication that conservatives really didn’t care about small businesses as they might like us to believe.
Access to affordable healthcare reduced one of the most significant barriers to small business ownership and innovation and provided more fuel for local economies, for which small businesses are key drivers. Especially impacted were young entrepreneurs – many of them women – who had the opportunity to create new business ventures while remaining on their parents’ healthcare plans. In addition, in the first three years that the ACA’s American Health Benefit Exchange and a Small Business Health Options Program Exchange were available to small businesses and their employees, the number of full-time independent workers with healthcare coverage increased by nearly 20 percentage points. Against this background, just imagine what a transition to universal healthcare would do to the opportunities for America’s would-be entrepreneurs. No wonder that The Commonwealth Fund found that 58% of small business owners support a “Medicare for All” program.
Running a restaurant also exposed me to the conservative antipathy toward requiring employers to pay their employees a living wage. Citing concerns that wage increases for the lowest-paid workers in Maine’s economy would imperil the state’s small businesses, members of the Republican party have repeatedly attempted to overturn legislation resulting from the voter-approved 2016 fair wage ballot initiative, including eight bills proposed for Maine’s 130th Legislative session. Yet at our restaurant, we routinely paid wages well above the then-minimum wage without adverse impact to our sustainability. As business owners, offering our staff members a living wage was integral to our business plan – both a moral obligation and good business, as we valued and wanted to retain those folks who helped our restaurant thrive. Again, our experience with paying a living wage is not unique: 57% of the nation’s small business owners said minimum wage increases would have no impact on their business in 2020.
Meanwhile, many of those who express anger about an increasing minimum wage continue to support tax breaks to big corporations with billions in annual profits and allow them to subsidize their employees’ wages and healthcare with the taxpayer dollars that fund public assistance programs. In Maine, Walmart’s annual cost to taxpayers has been estimated at nearly $40 million a year, and they, along with other “big box” retailers are increasingly seeking additional property tax relief from municipal governments. Given this reality, it seems to me that this anger is misplaced, and taxpayers – including small business owners – should demand better. Adding insult to injury, as we’ve watched businesses succumb to the challenges of COVID-19, several big corporations (to wit, Walmart, Target, and Amazon) have reported record earnings, revenue and profitability.
Finally, there has been a tremendous amount of discussion about how Trump’s 2017 Tax Cuts and Jobs Act was a boon for small businesses…and how President Joe Biden, who has proposed changes to this legislation, doesn’t care about small businesses. In the years since this bill passed, however, my husband and I have yet to see any substantive impact. Perhaps that’s because the bipartisan Joint Committee on Taxation found that 44% of the pass-through tax benefit touted as a positive for small businesses has been directed to people making more than $1 million a year, or just 0.3% of Americans; 75% of the benefit has gone to small businesses owners making more than $200,000 annually. For context, the average small business owner made approximately $51,000 in 2017, the latest year for which data is available.
Imagine how much more support we could provide to small businesses during the ongoing COVID-19 pandemic if the taxpayer money that subsidizes large corporations, rewards the wealthy, and perpetuates economic inequality could be redirected to local business owners that are struggling for survival. And emerging from the pandemic, consider how those dollars could impact job growth and economic development, support minority- and women-owned entrepreneurs, bring renewed vitality to our downtowns with a wider range of services, and increase local tax bases.
When we step back from the myths about small business support and look at what happens every day in practice, two things become clear: first, it is big corporations, not the mom-and-pop and “Main Street” businesses, that are benefiting most from our economic system; and second, it is progressive policies that will drive a more robust small business economy that is critical for Maine’s future.
Photo: Restaurant window on Main Street in Houlton, Maine. | Kathryn Harnish