Big Lies and "small" business

Posted by Joshua Holland at 8:07 AM on February 27, 2007.

I find it amazing that the corporatist right -- slaves to multinationals and no friends to real "mom and pop" companies -- can prattle on about "small business," and nobody calls them on their mendacity.

Consider the argument advanced by Senate Republicans and the white House that small businesses need new tax cuts to offset the pain they'll feel from the Dems' minimum wage hike. As it turns out, that's not really a problem:

Small business owners are not losing much sleep about an increase in the national minimum wage, according to a recent survey by national payroll service provider SurePayroll.

According to the SurePayroll survey, the majority of small businesses (51 percent) don't even know what the minimum wage is in their state. Of the small business owners surveyed by SurePayroll, only 3 percent pay the national minimum wage to some of their employees. Only 6 percent of the respondents pay a state-mandated minimum wage to some of their employees.

The remaining respondents (91 percent) are not affected by minimum wage laws because they pay all of their employees more than the minimum wage, The survey confirms what SurePayroll has been hearing anecdotally from many of its 18,000 small business customers who use SurePayroll's payroll outsourcing service. "Most small businesses are paying more than the national minimum-wage, so an increase in the minimum wage has little to no effect on those small businesses," SurePayroll President Michael Alter said. "In my conversations with small-business owners, even if they are subject to minimum wage laws, they are not too worried about the increase. In fact, the majority of small businesses support an increase." Although most small businesses are not affected by the minimum wage, SurePayroll's survey confirms that the large majority (70 percent) support increasing the national minimum wage.

Just about everything that's good for working families is also good for small business men and women, because they have the same concerns. They want decent communities, they're looking to put their kids through college and they need affordable healthcare just like their employees.

Of course, there are very good reasons to enact policies that favor (truly) small businesses. They create a lot of jobs, they tend to be more socially responsible then big, faceless multinationals, many pay decent wages and, as a whole, they have better relationships with their employees.

The problem with discussing the issues that are important to them, though, is that there's a bait-and-switch going on in the U.S.: in Europe, a small business is defined as any firm with less than 50 employees - pretty much what one imagines when they hear the phrase "small business." But the American Small Business Administration defines small businesses in most sectors as those with less than 500 employees, with exceptions in many industries that bring the threshold up to 1,500 (and with a market value of up to $31 million).

So the next time you hear about the concerns of "small businesses," keep in mind that the category includes companies with tens of millions in market capital and as many as 1,500 workers.

Tagged as: minimum wage, small business

Joshua Holland is a staff writer at Alternet and a regular contributor to The Gadflyer.