US small businesses getting new attention - not all of it good. Candidates court support, but Congress readies costly laws
Small business seems almost like a sacrificial cow, being plumped and pampered on the eve of unpleasant happenings. Today and tomorrow, a star-studded cast is performing before the National Federation of Independent Business, the largest group representing small business. The playbill includes Ronald Reagan, a clan of presidential candidates or water-testers - Robert Dole, Pat Robertson, Jack Kemp, Bill Clinton, Paul Laxalt, Patricia Schroeder - and other Capitol Hill luminaries.
All this attention is not a sign of how powerful the small business community has become, however. Some critics call it the result of good timing, giving candidates a platform to show support for small businesses just as the presidential race gets going.
In fact, in terms of political clout, the small business community has never been weaker, says John Satagaj, president of the Small Business Legislative Council. ``We've never been more isolated, so much on the defensive,'' he says. ``Eighty percent of my day is spent on negative activity, stopping this initiative on mandated health benefits or that bill on parental leave. It's a low point.''
The battles are only beginning. Next month, a bill requiring companies to alert and compensate past and present employees exposed to toxic substances will be introduced in Congress. Then, in the fall, comes a drive for a higher minimum wage, mandated parental leave, and mandated health benefits.
Small business advocates are quick to point out that these are worthy causes. It's just that they're so expensive. Unlike their bigger brethren, small companies don't have the size to, say, negotiate with a health care provider for a low-cost health plan.
What has happened, says Allen Neece, who represents small and medium-sized business associations, is that the relative standings of employers and employees have flip-flopped, with the employee now coming out on top. What's more, it has occurred during the Reagan administration - an ironic twist given Mr. Reagan's espoused fondness for the entrepreneur and small business.
To understand how the flip-flop came about, it's worth a look back at the last two White House Conferences on Small Business: in 1980 under President Carter, and last summer under President Reagan.
In 1980, there was ``a lot of pent-up anger'' among the small business community, says Mr. Neece. Fed up with the federal govenment and its regulations, it mobilized forces within the administration and on the Hill. What followed was a series of ``easy legislative solutions,'' he says. During that time, small business sought and got regulatory reform, reduced paperwork requirements, changes in workplace safety requirements, and a tax bill that gave all business a big boost, among other things.
Over the next few years, employees saw their positions erode. Labor unions, worried about their dwindling numbers, became more preoccupied with keeping their members employed than with increasing their wages and benefits. Wages, after inflation, fell for the first time in generations. Meanwhile, the safety net was shrinking, as Congress began to limit spending on social programs. With the budget deficit spiraling out of control, Congress passed the Gramm-Rudman-Hollings deficit reduction bill, effectively throwing any hope for government-funded programs for labor out the window.
So ``the government decided it was better to have business assume the responsibility [for employee programs] rather than the public or government,'' says Mr. Satagaj. Then, at the August 1986 White House Conference on Small Business, Congress was not in session and the President was not in town. The conference also took place in the middle of a presidential drive to abolish the Small Business Administration.
When the Senate went Democratic in November, the ``last barrier'' to passage of the most dreaded bills fell, says Jere Glover, who represents the National Association for Self-Employed. Moreover, he says, ``we've got another three to five years of tough legislative sledding.''
The various factions of the small business community are patching up their differences to fight their common legislative enemies. ``Today,'' says Neece, ``we're working from the same songbook.''