Small Businesses, Big Impact
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Steven Pearlstein's July 8 column ["Small Business, Big Fable"] really missed the mark.
Mr. Pearlstein wrote, "Maybe there's a reason why these are small businesses." Maybe he thinks his barbershop should employ 500 people? Maybe all businesses should mimic GM? There's a reason they don't -- it's called economics.
To set the record straight, small businesses do create the majority of jobs. Data from the Census Bureau and the Bureau of Labor Statistics show that small businesses contributed about two-thirds of all jobs over the past 15 to 20 years. Contrary to Pearlstein's assertion, not just rapidly growing firms contribute to small-business job creation. The very smallest (one to 10 employees) do so as well.
As for an employer mandate, wherein small businesses would be required to offer health insurance, it's just poor policy. Mr. Pearlstein is correct about one thing -- a mandate will be "paid" by employees in the form of depressed wages and lost jobs. Sadly, the employees most affected are the ones who can least afford it: low-wage workers. Making matters worse, small businesses not currently providing insurance (those that would be most affected by a mandate) are owners making little to no profit. These are the firms Mr. Pearlstein dismisses -- they could be the next Microsoft.
Maybe Mr. Pearlstein doesn't like small business. Or maybe he got a bad haircut from the corner barber.
BILL DUNKELBERG
Chief Economist
National Federation of Independent Business
Washington
