Michael Abraham's Article Archive

Small business is losing an unfair fight

As a small business owner, I take more than a passing interest each Labor Day in the contribution organized (and for that matter, disorganized) labor makes to the economy of America and in how our political system and our media react towards it. A month before this year’s Labor Day, I had an experience that helped me conclude that the traditional struggle between labor and management is obsolete, supplanted by a new struggle that our leaders have yet to comprehend or address.

I had the opportunity to call on George Porterfield, Principal of my alma mater, Christiansburg High School, and thumb through a dusty yearbook from the class of 1960. In that year, the third of my company’s life, yearbook editors sold and printed 130 advertisements on the back pages. The economy in those days in small-town Appalachia was dominated by locally owned and managed small businesses; the grocer and the appliance store, the motel and the fillin’ station, the shoe store and the photo shop. Amazingly, I counted only eight that were still in existence today. The most recent to face their demise were Triangle Lanes bowling alley and Shelton and Walters’ men shop, the latter 98 years old when it shut its doors for the last time. My experience illustrated a significant makeover of our national economy.

Today’s economic struggle, I came to realize, is not Big Business versus Big Labor, but Big Business versus Little. And the Big Business juggernaut dominates. The examples are everywhere:
• WalMart rules department store retailing like no company in history. Today, more people are on Wal-Mart’s payroll than the U.S. Army.
• Agribusiness giants dominate food production, putting thousands of family farms out of business yearly.
• Locally-owned restaurants, motels, and cinemas are being massacred by the franchises. Almost every business in our local mall is a franchise.
• Independent brokers of insurance, airline tickets, medical services and more are being restricted in their commissions by their suppliers.
• Broadcast media are increasingly owned and thus controlled by a shrinking number of players.

The ways Big Business flexes its towering strength muscles are evidenced everywhere. Most egregious are the myriad of corporate incentive programs that pour millions of public dollars into corporate coffers, taking money from taxpayer pockets and placing it into the wallets of those in our society who need it the least; the ultimate form of corporate welfare. An example: a friend of mine was the first buyer of land in our County’s new industrial park, a five acre parcel. He re-mortgaged his house to fund the $75,000 cost. Meanwhile EchoStar, a Colorado corporation was leased ten acres for a mere $1 per acre per year. Because EchoStar was already rich, from somewhere else, and with friends in high places, they were essentially given what local, small business owners have to buy. “Do the math, Michael!” admonishes our County’s Economic Development Director, speaking about the incoming jobs. When I do the math, I count the public dollars given to private corporations. It’s a fair bet that nobody understands the incentive program better than the Big Businesses that take advantage of them. In a free and ostensibly democratic system, the practice of preferentially boosting one company and not another should have ended decades ago, but instead has become a cornerstone of economic development policy.

Corporate leaders seldom face repercussions if their businesses fail or if their malfeasance spreads misery throughout the corporation or amongst its shareholders. Even when the corporations fail, they’re often resuscitated by the government with public funds. Rarely do those responsible land hard; instead they’re buoyed by their golden parachutes. Companies like mine, when faced with crime, accident, or swings in customer preferences have no safety net. We’re left to sink or swim unassisted; a blatant inequity.

Preferential buying of products for resale (where corporate retailers and resellers are given better pricing by manufacturers and distributors) and of such services as employee medical policies puts Little Business at distinct competitive disadvantages.

Amazingly, this struggle has yet to register on the radar screen of public debate. Heretofore, the Republican Party was seen to side with Big Business, the Democratic to side with Big Labor. Now, nobody is siding with Little Business. To the contrary, both parties at all levels of government feed from the corporate trough and vice versa. Election victories are fueled with money and in large measure, Big Business provides it. Politicians swim in a sea of influence peddling and cronyism. At various times in our nation’s history, the Federal Government has sought to reign in corporate power, but the current administration shows only inclinations to the contrary.

Ask any chamber of commerce member whether he or she would rather see one new company in town with 1000 employees or ten with one hundred each, the latter would always prevail. But for politicians, the former makes the headlines and puts feathers into power caps. They have few compunctions in using our taxes in making it happen.

Little Business has always been seen as the backbone of the economy. The diversity, ingenuity, and resourcefulness of over two centuries of entrepreneurship have made our economy the model of the world. Restoring fairness and leveling the playing field where Big Business and Little Business compete will be the economic struggle of the twenty-first century. It’s high time someone started carrying the flag.

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