Policy

A Repair Shop Owner Wants Washington to Do More to Drive Business


President Obama shakes hands with Hawthorne Auto Clinic owner Jim Houser after a backyard discussion on health-care reform in Falls Church, Va., on Sept. 22, 2010

Photograph by Mandel Ngan/AFP via Getty Images

President Obama shakes hands with Hawthorne Auto Clinic owner Jim Houser after a backyard discussion on health-care reform in Falls Church, Va., on Sept. 22, 2010

Jim Houser and his wife have owned and operated Hawthorne Auto Clinic in Portland, Ore., since 1982. From the beginning, they sought to attract top talent to their repair shop by paying employees’ health insurance premiums in full. Rapid premium hikes around 2000 motivated Houser to advocate on behalf of small employers. In recent years, he’s written op-eds, testified before both houses of Congress, and attended the 2011 State of the Union address as a guest of Michelle Obama. (The president name-checked him in the speech.)

Houser currently serves on the executive committee of the Main Street Alliance, a left-leaning small business advocacy group. I spoke to him recently about health-care reform and ways Washington might goose demand for Main Street goods and services. An edited transcript follows.

You’ve been an outspoken supporter of the Affordable Care Act for years now. What do your customers and competitors make of that?
I’m surprised there hasn’t been more partisan anxiety about me taking a public position. Some customers say, “I’ve heard of you. I like what you’re doing. I’m going to bring my car to you.” That doesn’t happen very often. Other small business owners, especially auto shop owners, call me up and ask me about health care. I’ve never had a fellow business owner call me up and say, “This is ridiculous. This is socialist. You’re going to ruin the country and we’re going to end up like Mother Russia.” On Facebook (FB)—that’s a different story. I do get lots of push-back there.

Do you hear a lot of complaints about difficulties with online exchanges?
Most of our parts purchasing is on websites, so I can tell you there are some god-awful websites out there, and all this angst tells me either people have never been on a website or they’re not being fair. There’s no question that Oregon’s website has been a fiasco. They overpromised and underdelivered, and anyone in small business is going to tell you that will blow up your model. Overall, people are hopeful. They assume it’s going to work out, but they want to know when.

What are the next public policy questions that would make a difference for small business owners?
What we need is customers with enough income to afford a new set of tires. There was a time, before 2007, when you handed customers a list of things and they would say, “I don’t plan on buying a new car, so let’s take care of all of it.” Now it’s more like, “I’ll do this one, and that one, and that’s it.” I see that throughout auto repair. So that’s the next big issue: The lag in wages is not enabling my customers to buy more parts and services.

So what should government do?
I’d like to see some variation of the focused federal stimulus spending that never really happened following the Great Recession. If corporations aren’t willing to invest and put people to work, the government needs to incentivize. Tell them: You can either expand and put people to work, or we will raise taxes and we will put people to work.

You argue paid sick leave and a minimum wage hike are ways the government can goose consumer spending. How so?
Ours is in large measure a consumer economy, so I think most small business owners would smile at the notion that people would have more cash to put into savings, pay down debt—and purchase a new set of tires instead of a used set. You couldn’t do it overnight, because it would blow up businesses. But if you were to transition to that, think about what effect it would have on people’s purchasing power.

What about the increased labor costs?
We only have one person under $15 [an hour], so this is somewhat hypothetical. I have 10 employees, and I have 15 customers a day. If I had to pay more per employee, but 15 customers a day had more buying power, over a year’s time that’s a net gain for my business.

We went out to talk to people about paid sick leave, and we didn’t find one business owner who said, “Our employees don’t deserve sick days.” They said, “I don’t know how to make it work because of my competition.” I say, “What if the competition has to give paid sick days, too?” I think people don’t always see the big picture.

So it’s all about customers?
There’s this notion that if we give tax breaks to business owners, they’ll hire more employees even though the businesses don’t have things to sell because consumers don’t have any more money. Small business hiring decisions are made based on consumer demand, not cash on hand. That’s something that needs to be brought into the conversation. I have a brother who’s a concrete and asphalt contractor in Ohio. He says, “When I have more customers, I hire more staff. When I get a tax break, I go to Aruba.”

Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

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