That is a big deal. America’s small businesses —half of the private-sector workforce. While large corporations dominate the headlines, the small business community generates . Even in the age of Amazon and Google, our economy would not be a global leader without the contributions of local bookstores and neighborhood diners.
To the mainstream media’s credit, much of the reporting world has recognized the outsized importance of small businesses in recent weeks. News outlets like and continue to profile small business owners affected by the COVID-19 pandemic.
And for good reason: When a small business employer is negatively impacted, the employees and their families are bound to suffer. The free market is interconnected, with employers and employees simultaneously feeling the burden of an economic shutdown. You can’t hurt one and not the other.
The mainstream media is receiving government assistance intended for small businesses. CNBC, for example, in Paycheck Protection Program (PPP) funds that were earmarked for small businesses but instead went to public companies, more than 245 of them. Again, for good reason: Your local diner is more vulnerable than a hotel conglomerate, although the latter is vulnerable too.
This begs the question: Where is such fervent small business advocacy in normal times?
While news outlets stand up for small businesses, often to take a swipe at “Big Business,” they were noticeably more reluctant to do so pre-economic shutdown. Outside of business media, rare were the small business testimonials about loan compliance and payroll costs—the sort that CNN now .
If anything, the mainstream media was less sympathetic to the plight of small businesses, advocating for big-government policies that threaten their financial solvency. News stories extolling the virtues of minimum wage increases have been constant (read , , or ). The narrative has primarily focused on the segment of workers earning higher pay while relegating the small business owners who foot the bill to secondary importance.
Those news stories were also quicker to focus on rank-and-file beneficiaries than the segment of workers facing reduced hours and even layoffs because of mandated wage increases.
When the minimum wage is increased, so is the labor cost borne by an employer, large or small. It’s Economics 101: If an employee’s pay is increased to $15 an hour, that employer is essentially forced to pay for that higher wage. The employer’s overhead cost goes up while revenue is unaffected.
Something has got to give.
If that cost goes up too much, an employer may eventually be forced to cut that cost, leading to layoffs and even business closures. This has already , and it will continue to happen. A business’s bottom line is a matter of fact, not a feeling.
It is worth asking: Didn’t small business owners matter pre-pandemic, just like they do now? Wasn’t their financial solvency relevant? If the threat of the pandemic matters now (which it obviously does), wasn’t the threat of higher labor costs relevant then?
Granted, levels of “threat” are not created equal, but news outlets seem far more concerned with small business prosperity now than back then. Amidst a pandemic, they seem to be far more understanding of tight operating margins and even tighter margins for error.
That is a problem. If times are normal, that doesn’t mean such understanding should go away, replaced by political advocacy.
We should all be mindful of the small business plight in good times and bad—because small businesses power the U.S. economy, in good times and bad. We must continue to support them with our purchasing power—now and always.
The pandemic is a wake-up call: Small businesses need help, not hindrance. Whether it’s a public health emergency or a burdensome mandate, hindrances need to be called out for what they are.