Navigating through 2019 as a small-business owner


A perspective on mandatory entry-level wage hikes, supporting small business owners, and the political playing field

by Alfredo Ortiz

As a new year begins, it’s important that small- business owners make themselves aware of the legislative issues surrounding the biggest job creators in the country, small businesses.

Small-business entrepreneurs are responsible for two-thirds of all new jobs created. There are more than 30 million small businesses in the U.S. and they employ nearly 60 million people – or roughly half the entire U.S. workforce.

So, when small businesses are doing well, the broader economy also is doing well – a circumstance that helps all Americans. As the saying goes, “A rising tide lifts all boats.”

This is why it is important that policymakers at all levels of government – local, state, and federal – implement policies that lend small-business owners a helping hand rather than instituting various forms of taxes and regulations that limit their success.

At the state government level, one legislation small-business owners should be informed on is protecting the small-business community from mandatory entry-level wage hikes – a policy recently supported by voters in Missouri and Arkansas via ballot initiative. Proponents of higher entry-level wages believe the policy helps the working class. However, it increases labor costs for businesses and often forces owners to reduce employee hours and staff.

A study investigating Seattle’s entry-level wage hike was conducted in October. The report concluded that although pay per hour for less-skilled workers increased, total compensation remained stagnant after being offset by a reduction in working hours.

Moreover, unlike larger corporations, small businesses usually have slim profit margins. So, even slight increases in operational costs – whether that is an increase in the price of a raw material or, as in this case, higher labor costs – can drag business balance books out of the black and into the red. In the worst-case scenario, this could force a small business to shut its doors for good.

On the federal level, lawmakers can tackle fiscal policies that help small businesses.

For example, the Tax Cuts and Jobs Act that was passed at the end of 2017 has brought financial relief to millions of Americans and businesses. The lower tax rates for small businesses have spurred a strong economy. Job creation continues to be solid, wage levels are rising and, essentially, everyone who wants a job has one.

The success of this round of tax cuts should spur even more tax-relief policies that target small businesses and the American consumers that fuel spending at these establishments.

As a result of November’s mid-term election, the political playing field has changed in Washington D.C. and state capitals around the country. Fortunately however, policies that support small businesses should garner bipartisan support.

In 2019, it is essential for lawmakers of all political persuasions to come together and pass policies that help the country’s small-business community.


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