Commentary

Spare Small Business the Campaign Spotlight


President Obama speaks during a roundtable discussion with small business owners at Taylor Gourmet restaurant in Washington, D.C., earlier this year

Photograph: Saul Loeb/AFP/Getty Images

President Obama speaks during a roundtable discussion with small business owners at Taylor Gourmet restaurant in Washington, D.C., earlier this year

Helping small business has been a dominant theme in this year’s presidential campaign. While the crush is nothing new—politicians have sung the praises of entrepreneurs at election time for decades—it feels like the nominees are pursuing them even more than usual this time around. From the convention speeches to the campaign stops, Barack Obama and Mitt Romney each have claimed that they are the best candidate to help small companies get back on track, and return their investment and hiring to historical levels.

It isn’t just the nominees, of course. At the Republican National Convention, House Speaker John Boehner repeated the message that small business owners, not the government, deserve the credit for building their businesses. His fellow Republicans, almost to a person, invoked their support for entrepreneurs in their speeches. At their convention, the Democrats gave airtime to the owner of Port City Brewing Co. in Alexandria, Va., who told the crowd how he got the financing he needed through a Small Business Administration loan program he credited the president with putting in place. Not to be outdone, the agency’s chief, Karen Mills, told the crowd: “From day one, President Obama has made small businesses a top priority in his White House.”

At first glance, this focus on small business is curious. Only 15 million of the 143 million working Americans were self-employed in July, the latest Bureau of Labor Statistics data show. And of those 15 million, my back-of-the-envelope calculation (based on earlier BLS figures) suggests only about 4.3 million actually employ others today.

Could the small business vote really make a significant difference? Small business owners make up only 15 percent of registered voters, according to the National Federation of Independent Business, a right-leaning advocacy group, based on its analysis of government data. They aren’t concentrated in swing states like Florida or Ohio; my analysis shows that swing and non-swing states alike have a statistically indistinguishable 1.9 employer businesses for every 100 residents. And a recent Gallup Organization poll of 9,925 working registered voters showed that small business owners’ preferences for president are hardly in doubt. Those identified as business owners favor the challenger over the incumbent 57 percent to 37 percent.

The presidential candidates have focused on small business in large part to associate themselves with a trusted group. According to a 2010 Pew Foundation survey, 71 percent of Americans think that small business has a positive “effect on the way things are going in this country”—that’s 8 percentage points higher than churches and other religious organizations. With 69 percent of the respondents also dissatisfied with the government, it’s not surprising that the candidates are trying to get under the small business halo.

The candidates are also trying to appeal to people who work for small employers. While only a small fraction of people run their own businesses, a much larger number depend on small businesses for a paycheck. In 2009, the most recent year data are available, 56.3 million Americans worked for small companies, the SBA reports (PDF).

Each nominee thinks he can capitalize on his opponent’s weaknesses by focusing on small business. For the Republicans this means telling voters that the president is anti-small business by repeatedly mentioning Obama’s own line from a speech in Roanoke, Va., on July 13: “If you’ve got a business—you didn’t build that.” For the Democrats, this means telling the electorate that Governor Romney will do nothing for middle-class small business owners because he cares only for the rich. His tax policies “would throw the middle class under the bus,” the Democrats claim in speeches, blogs, and campaign websites.

While the nominees are focused on delivering a pro-small business message with the election in full swing, it’s clear that as in years past the spotlight will shift once the election is over. In the meantime, entrepreneurs can bask in the warm feeling of knowing that whoever becomes the leader of the free world in 2013 is as high on small business as he is on motherhood and apple pie.

Scott_shane
Scott Shane is the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University.

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