Small Business Policies Are the Best Way To Help American Workers
Labor Day marks the end of what the media have dubbed a “hot union summer.” While there have been a few high-profile strikes and strike threats, including among Hollywood screenwriters, UPS drivers, and the United Auto Workers union, temperatures haven’t reached a boiling point.
President Biden has championed labor action as part of his claim to be “the most pro-union president in American history.” The administration recently released a new report suggesting greater unionization can cure whatever ails the middle class, from high housing costs to stagnant wages.
Over this Labor Day long weekend, legacy newspapers were filled with columns highlighting the purported benefits of unions. Even some populist conservatives now claim greater unionization is needed to fight corporate power.
But the pro-union versus pro-management labor policy debate misses the best way to actually help workers: pro-small business policies. Small businesses create nearly two-thirds of new jobs, giving workers more bargaining power over wages and working conditions than unions ever can. A robust small business economy empowers workers to easily get better jobs and ushers in competition for employees that raises labor standards throughout the economy.
Consider the shared economic prosperity the country enjoyed in 2018 and 2019. Because of a strong small business environment, real median income rose by 6.8% in 2019, the largest increase in history. Incomes grew even faster for blue-collar workers and racial minorities.
What a contrast to today. Biden’s policies have reduced small business vibrancy, hurting ordinary workers. For example, Biden’s reckless spending has caused historic and prolonged inflation, eroding small business profit margins and reducing Americans’ real wages and living standards during his presidency. Inflation has increased by 17% over his term.
Biden’s war on traditional energy, illustrated by his green energy industrial policy, has increased electricity and transportation costs for small businesses. Gas prices have risen by more than 50%since he took office. These costs reduce funds available for workers’ wages and disposable incomes after bills and fill-ups.
Biden’s opposition to any kind of pro-small business health care alternatives, such as association health plans and short-term health plans, has resulted in outrageous health care costs that hit small businesses and their employees hardest. Average annual small business health care coverage now costs $22,200 per employee, money that otherwise could go toward hiring and increasing wages.
Biden’s favored labor policy, called the Pro Act, would further hurt small businesses and workers. It upends the franchise system and contracting model, two well-paved paths that ordinary people take to achieve the American Dream. Economists long have known that labor regulations and entrepreneurship are inversely correlated. And less entrepreneurship means less opportunity for workers to get better jobs. Don’t let this legislation’s pro-worker intentions obscure its anti-worker outcomes.
To the extent that the Pro Act would increase unionization through coercive organizing practices such as card check, it would help Democrats and Big Labor, not workers. More union members mean more union dues payments that fund Democrats’ political activities. Each year, America’s big labor unions spendhundreds of millions of dollars of member dues on left-wing political causes. For example, they fund dozens of liberal activist groups that push anti-small business policies such as tax increases, regulations and reckless government spending.
Biden and Democrats support the Pro Act and greater unionization for reasons of self-interest, not to help American workers. In fact, by the all-important pocketbook measures of real wages and disposable incomes, Biden is the most anti-worker president in modern American history
To actually help American workers, policymakers should pass Job Creators Network’s American Small Business Prosperity Plan. This eight-point policy playbook would reinvigorate the American economy, creating more job opportunities and higher worker wages.
The plan reins in the government’s inflationary deficit spending to protect small business profit margins and grow workers’ real wages. It unleashes American oil and gas to reduce pain at the pump and high utility bills. It increases health care options to reduce coverage costs that cannibalize employee wages. And it exempts small businesses from new regulations that prevent them from flourishing.
Despite what Democrats and mainstream media tell you, there is no dichotomy between small business and worker interests. They rise and fall in tandem. Policymakers who sacrifice small businesses in an effort to improve working conditions will get neither; those who prioritize small businesses will get both.