At first glance, it seems like Democrats and Republicans do not agree on anything. The clear differences between the candidates for president this year seems to prove that the two parties and their supporters have completely different opinions on every issue. They are deeply divided about health care policy, the Supreme Court, police use of force, public protests and even the response to the current pandemic.
However, there are two things in which both parties are in complete agreement. The first is that both parties support policies and programs that are destroying “mom-and-pop” businesses. The second is that both parties do not want a powerful third party.
DEPOSIT PHOTOS
A mom-and-pop business is a local family owned-enterprise that provides goods or services for residents in the region. There are more than 16 million mom-and-pop businesses in the U.S. employing more than 32 million people. These independent businesses are an essential part of the economy because they provide significant local tax revenue and millions of living wage jobs. They also provide exceptional customer service and personalize their products or services for their regular customers. They typically spend more money to support local community organizations and activities than the decentralized national stores. They pay their employees better than the big box stores, treat their employees like family members and offer them long-term employment, health care and job security without government mandates.
Unfortunately, throughout the country, and especially in New Jersey, Democrats and Republicans have supported policies and programs that are putting these mom-and-pop entrepreneurs out of business.
Republicans have provided large tax breaks to big businesses that, instead of “trickling down” to smaller businesses, have put them at a competitive disadvantage. Democrats have increased taxes, added unnecessary regulations and provided competitive advantages to unions that have reduced revenue and overwhelmed small family businesses.
Tragically, the pandemic has created the most significant mom-and-pop business crisis in American history. The national stores that have the financial strength to survive the crisis and money to hire lobbyists to convince politicians to give them special privileges, were allowed to stay open while so many family businesses that have very thin profit margins were forced to close. Lobbyists convinced politicians to allow big-box stores that pay relatively low wages to serve customers throughout the crisis and forced mom-and-pop stores to lose customers and the revenue they need to survive. Unemployment claims in New Jersey have been filed by 1.4 million people largely because mom-and-pop stores have been closed during the pandemic while big-box retailers have been allowed to remain open.
Politicians of both parties seem to ignore the reality that their response to the pandemic has put a dagger in the heart of many of these family businesses. When a small family business is required to close for social safety reasons an entire family is out of work. Unemployment does not provide enough income to make up for the household wages lost because a family business was forced to close. These families are therefore not only unable to pay their business expenses they cannot pay their mortgage either.
Unfortunately, New Jersey politicians do not seem to understand this and fail to provide the needed pandemic financial support for the mom-and-pop businesses that employ the entire family.
What can both parties do to save family businesses? The first thing they can do is include line-item funding for such businesses in the state budget. We are in the midst of the most significant small business crisis in the state’s history yet there was no special provision for small family businesses in Gov. Phil Murphy and the State Legislature’s $32.7 billion state budget. The second is add a “Pandemic Equity Tax” to those large businesses that were allowed to stay open during the pandemic. This tax revenue could be held by the New Jersey Economic Development Authority and used exclusively to provide forgivable loans to the local small businesses – restaurants, beauticians, gyms, etc. – that were forced to close during the pandemic.
I was a student at Princeton at the same time as Jeff Bezos. I applaud his success as the founder of Amazon. However, the fact that he set a net worth revenue increase record of $13 billion in one day in the midst of a pandemic, when many small business owners can’t feed their families, is clear evidence that a pandemic equity tax is essential. Federal politicians should require those companies that have benefited during the pandemic because government forced their competitors to close to help struggling small businesses. Congress should require online retailers like Amazon to pay the tax on all purchases.
The tax revenue would be paid into a special small business fund in every state designed to provide forgivable loans to struggling mom-and-pop businesses.
There are an infinite number of ways that Democrats and Republicans can save local family businesses in America. However, they have to make saving local small businesses a priority. If every politician in the United States had at one time had the stressful responsibility of making a small business payroll every two weeks, politicians would make supporting local small businesses their number one priority.
Unfortunately, today’s politicians seem to be tone-deaf to the needs of mom-and-pop businesses. It is time that the “Big Business” Republicans and “Big Government” Democrats stop the assault on mom-and-pop businesses and start representing their interests or they may find themselves up against a very influential “Small Business Political Party” in the future.
Dale G. Caldwell is the executive director of the Fairleigh Dickinson University Rothman Institute of Innovation and Entrepreneurship, which is focused on researching, supporting and promoting entrepreneurship in New Jersey. He is the author of Intelligent Influence: The 4 Steps of Highly Successful Individuals and Organizations which provides the theoretical framework for exceptional organizational leadership.
