MSA members Ernisha Randolph and Kadi McLean meet with Former Secretary of Labor Tom Perez in Miami, FL

Acosta needs to know: Small business growth depends on a strong middle class

Small-business owners need commonsense workplace policies that protect their businesses and foster a thriving middle class. People who oppose those policies, however, like failed Department of Labor chief nominee Andrew Puzder, often invoke small-business owners as the primary victims of these beneficial measures.

Common arguments run along these lines — raising minimum wage and paying overtime will cost business owners too much money, which will lead to job loss or business relocation. Federal regulations overwhelm small businesses. Loopholes that allow multinational corporations to dodge their taxes are essential to keep the U.S. competitive.

These flawed arguments reflect the high-dollar influence of select business CEOs rather than the real needs of small businesses. President Trump’s new nominee for labor secretary, Alexander Acosta, is less controversial than Puzder and likely to be confirmed.

As Acosta heads to the Senate for confirmation, the Main Street Alliance, a national coalition of small-business owners, urge the DOL to prioritize the most pressing issues that impact the health of Main Street.

First, the most important thing for small-business health is a thriving middle class with customers who can afford to spend money. A robust middle class is built on a high-quality job market with living wages, access to retirement funds, and paid leave.

A tenable minimum wage is a start. Research shows that a higher minimum wage does not have a negative impact on job growth, and the costs of a pay hike are offset by higher consumer demand, less employee turnover, and increased productivity.

Small-business owners and their employees also need affordable retirement options. Nearly half of all Americans report having no retirement savings, and small-business owners, in particular, face acute challenges saving for retirement. The DOL recently issued rules that freed up states to start implementing “secure choice” retirement initiatives, which provide access to secure, low-cost, state-run pooled retirement savings plans.

These programs allow small-business owners to offer retirement accounts to their employees without shouldering the financial risk or administrative burden of administering the program. Recently, however, the House voted to repeal the rules, leaving it to the Senate to decide whether small-business owners will have access to these retirement accounts.

Third, business owners and their employees need access to paid sick days and paid family and medical leave. The loss in productivity to the U.S. economy due to illness in the workplace has been estimated at $160 million annually, with the majority of this coming from people going to work sick. Providing employee access to earned paid sick days increases workplace productivity, decreases turnover and creates a healthy workplace.

A federally-run, paid-leave insurance program would enable small businesses to compete on a level playing field with larger employers who are already able to offer such leave. In so doing, it would reduce turnover costs and support the local economy.

Furthermore, with a government-run program, small businesses would not only retain more employees, but they would also receive critical coverage that buffers them against economic collapse if they or a loved one should fall ill.

Under the Obama administration, former Labor Secretary Tom Perez elevated paid leave as a priority issue of the DOL, supporting the cause with both agency resources and the bully pulpit. We hope the future labor secretary follows suit.

Fourth, small businesses need sensible, protective regulations. These include the DOL’s “fiduciary rule,” which requires financial advisors to act in the best interest of their clients. This commonsense rule is estimated to put $40 billion into the pockets of people saving for retirement, including small-business owners, over a 10-year period. The Trump administration has already looked for ways to roll it back.

Sound regulations also benefit business owners by lowering workers’ compensation costs and medical expenses, avoiding OSHA penalties, and reducing costs to train replacement employees and conduct accident investigations.

The most serious workplace injuries and illnesses in 2010 amounted to $51.1 billion in direct U.S. workers’ compensation costs alone. In addition, workplace safety and health improvements lead to increased productivity and financial performance.

Finally, Main Street’s small-business owners need immigrants. They are central to our economy and culture. Statistics show that immigrants are far more likely to open a small business than are native-born Americans.

Immigrants start 25 percent of new companies in the technology and engineering sectors and employ more than 500,000 people. Refugees have strengthened communities. They’re working, buying homes, renewing neighborhoods, and pumping dollars back into the local economy.

Small-business owners and their employees are concerned about the future. The current administration has recklessly issued executive orders and pushed policies that endanger the health of small businesses and the middle class. The next labor secretary needs to strengthen small businesses with policies that invest in, rather than extract from, Main Street.

Michelle Sternthal is the policy director of Main Street Alliance, a national network of small-business coalitions working to build a new voice for small businesses on important public policy issues.

This column originally appeared in The Hill on 2/27/17

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