If you've been paying attention to the news lately, you may have noticed there has been a lot of discussion about taxes, specifically regarding what to do about the Bush-era tax cuts set to expire at the end of this year. President Obama wants to keep the tax cuts in place for what he terms the 'middle-class,' families making $250,000/year or less, and revert to pre-2001 tax levels for those making more than $250,000/year. Republicans, on the other hand, argue that 'raising' taxes on this upper income bracket above $250,000 would hurt the economy because many of these people are small business owners who, if taxed at a higher rate, would not expand their businesses or hire new employees, thus exacerbating high unemployment levels. Moreover, Republicans argue that small business owners aren't hiring now because of a lingering uncertainty about whether their taxes will climb. The Obama administration has countered with proposals targeting small businesses with incentives and funds that would supposedly offset the coming rise in tax rates. And so we would appear to have a political debate about tax policy.
Sidebar: Does anybody really think that someone making $240,000 is middle-class? That's a hell of a lot of money to me.
John Boehner plays working man...
According to the US Government's Small Business Administration's Office of Advocacy, small businesses employ about half of US workers (at least of those not working on farms or for the government)and, between 1993-2009, created about 65 percent of new jobs (http://www.sba.gov/advo/stats/sbfaq.pdf). The same source classifies small businesses as firms employing 500 people of less.
Yet, I would like to take a step back here and ask, what makes small business owners so special? I believe both sides of this debate have attached themselves to a romanticized figure of the small businessman, who, as a rugged and entreprenuerial individual, if only were it not for the other side's thick-headed policies, would be able to overcome great obstacles and gladly behave with munificience towards his employees and their familes. This Guy who put the pop in Mom and Pop, needs help, whether its government assistance or the desire that the government should just leave him alone. He (in my observation, this is pretty clear-cut gendered figure) and his unwavering work ethic harken back to those early days of American history when frontiersmen set off into the woods and made something of themselves with their bare hands.
In reality, there is nothing inherently good or bad about a small business owner, just as there is nothing inherently good or bad about a large corporation. Rather, it is their actions and relationships, their position in relation to political and economic structures, that determine this. Gigantic corporations might be evil (they often are) say, because they pollute the Gulf of Mexico, but internal HR policies and a history of lawsuits might mean that they actually fairly compensate and insure workers and attempt to give back to the community. Small businesses, while they surely can't release destruction like a Hallibuton or BP, can fail to provide health insurance to workers or discriminate against certain classes of workers. Bigger, or smaller, is not always better (or worse).
I suppose someone could make a counterargument here along the lines of, "Hey, big corporations get tax breaks all the time, so why shouldn't small businesses owners get relief?" Touche!
Which brings me to the second theme- wage theft. A few days ago, I was talking with two undocumented Mexican men who work in the construction industry. These men are hard workers and they give back to the community, a fact I can attest to because they have volunteered to help move heavy furniture, carry supplies out in the hot sun, and paint walls for a local non-profit in Charlotte. They also are struggling to make ends meet. At the same time they aren't taking jobs away from "hard-working Americans" because no jobs in construction are to be had, they are owed significant sums of money from contractors who hired them to work jobs and then never paid up. This means they can't pay their rent and bills in a house they share with their families, including several children. One contractor owes these two men, and several of their coworkers, over $7000 each for a painting gig near Charlotte. Another contractor neglected to pay them over $11,000 each after they traveled to Boston to work on houses there. When I spoke with a person who advises clients at the Latin American Coalition on wage theft issues, she remarked that these two gentlemen are not alone. My conversation was just the tip of the iceberg of hundreds of cases of wage theft they see yearly. Contractors at job sites subcontract to other businesses who hire workers, then underpay or abscond with these workers' wages. It is left to the worker to sift through the multiple layers of contractors, to pursue legal action in small claims court, or to hire a lawyer to file a lawsuit, all the more difficult if you are here illegally, don't speak English as your first language, and are broke and falling into debt.
Who are these contractors perpetuating wage theft? Why, small business owners, of course! (Corporations engage in wage theft too; Wal-Mart come to mind.) So while politicians lionize the small business owner, we should keep in mind the explotation, the paternalism, and the off-the-books nature of many small businesses. If small businesses are given a tax break or incentives, maybe there should be a provision that they won't receive money until they can prove they have paid all their employees all their wages for the past year. Or that they have to comply with OSHA standards in the workplace and provide health insurance for all employees to be eligible?
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