Small business seems to be a hot topic on the American news lately, with many wondering whether and when this key market indicator will begin to look up. From news roundtables to banking commercials, small business owners are not just the ‘in’ topic, but a key market for banks and financial services as well. This is a huge change from just a few months ago, when Fortune 500 companies seemed to be all that anyone cared about.
This shift in media attention makes sense when you consider that the majority of people in the United States are working for small and mid-sized companies rather than huge behemoth corporations. In fact, over fifty percent of the non-public workforce is employed by small businesses alone. Half of our nation’s GDP comes from small business as well. The fate of small businesses may actually affect more Americans than any other news item, making it an important barometer for the actual quality of life in the United States. Given this data, the news items covering huge corporations are sounding less and less like news.
Until recently, it was rare to see stories on small businesses, even in business magazines. The assumption was that, while small business may be a huge force when lumped together, no single small business impacted enough people to be worth a journalist’s time and a newspaper’s space. This has been an unfortunate assumption, because it has carried over into the way the government allocated economic recovery funds.
Small businesses have basically been robbed in the recent economic recovery allocations. To date, less than one percent of the trillions of dollars spent to recover the economy has been spent on small business projects. Because small businesses create 97 percent of new jobs, and these new jobs are essential to decreasing unemployment, this seems like an unfairly small piece of the pie. With Obama promising to create 4.1 million new jobs, giving more aid to small business may become a political necessity.
Apparently the administration has finally gotten the memo. A new loan program is in planning which will give select small businesses interest free loans to finance expansion in an economy where banks are reluctant to take any chances. While this program will help many, it is capped at one tenth of a percent of what JPMorgan Chase has received from the stimulus program. That’s right: one corporation will receive more than 27 million small businesses, although the small businesses are responsible for doing the heavy lifting to pull us out of the recession. The federal government continues to give hundreds of billions of dollars a year in contracts to these large businesses as well.
With small businesses supporting most of the middle class economy, the only way to bring this economy back is to redirect funds. Hopefully, this will be the result of the increased media attention toward small businesses. Increased attention to the plight of small business owners who are struggling to compete with huge corporations that receive endless tax dollars can only be a good thing.
