For decades our governments have neglected Small Business while facilitating the expansion of Big Business at every turn.
Now misguided COVID lockdowns are threatening to virtually eradicate small businesses in many jurisdictions.
This article won’t make a penny for investors – directly. That said, it may be the most important article you read this year with respect to your long-term prosperity.
Hyperbole? No, sad truth.
Small business is the growth engine of every economy
“Small business is the growth engine of the economy.”
You can hear those words out of the mouth of almost every politician…when an election is announced and they want our votes.
But (for many years) this has been nothing but empty rhetoric from our political leaders. They talk about helping Small Business – while they stack the deck in favor of Big Business to the greatest degree in history.
Expose these Charlatans.
Challenge your elected representative to explain why Small Business is the growth engine of our economy. Almost certainly he or she won’t be able to supply a cogent answer.
In fact, it’s very easy to explain how/why Small Business is the growth engine of every economy. It’s because they are “small”.
Per unit of economic output, small businesses pay much more taxes than large corporations. Put another way, Small Business gives back more to the Community than Big Business.
An economy with a plethora of healthy small businesses is an economy with a robust tax base.
Why have the mismanaged economies of the West plunged into obvious insolvency? Because our pea-brained leaders killed their own tax base through “globalization” and a host of other economic policies that greatly favor Big Business over Small Business.
Why can’t/won’t Big Business contribute to our Communities (and economies) with tax revenues proportionate with Small Business?
To start with, large corporations invariably receive preferential tax treatment from government: tax ‘loopholes’ (only open to large corporations) and outright subsidies (corporate welfare).
Secondly, Big Business employs an army of accountants and tax lawyers with one sole objective: to absolutely minimize what it pays in taxes each year. Many large corporations spend more in tax avoidance than smaller businesses take in in revenues.
But that’s only one reason why Small Business makes a major contribution to our economies while Big Business sucks us dry.
Per unit of economic output, Small Business pays out much more in wages. In aggregate, small businesses are robust employers, paying wages that span the full spectrum of tax brackets – depending on the industry.
That’s the other way that small businesses contribute to a robust tax base (and a healthy economy). They hire more workers and (on average) they pay them better than Big Business.
Meanwhile Big Business goes out of its way to minimize employment and cut wages (except for senior management). Union-busting. Over-investing in technology. “Downsizing”. And senior management that pays themselves obscene bonuses for being able to “cut costs” through shafting their own employees.
Small Business needs our help
After decades of steadily hammering nails into the coffin of Small Business, now our governments are in the process of hammering the coffin shut.
The same COVID-19 lockdowns that have caused extreme economic hardship for billions of people around the world are causing at least as much economic pain for millions of small businesses.
COVID lockdowns don’t reduce deaths. That’s what the numbers say.
…but they do destroy economies – and primarily the small businesses within economies. The first round of (misguided) COVID lockdowns may end up killing close to half of all small businesses by itself.
Now the U.S. government (and most other Western governments) is in the process of imposing Lockdown Hell again.
Except this time, our governments don’t have ignorance to use as an excuse. They know what they are doing.
With the small businesses that are still alive already severely weakened by the first COVID-19 lockdown, a second lockdown becomes an existential threat to these businesses. The virtual extinction of Small Business in our economies.
What can we do as individuals to help reduce this economic catastrophe? “Adopt” a small business.
Adopt a Small Business
What does that even mean?
You don’t need to buy the businesses. Just purchase their products, use their services.
A consumer dollar spent at Walmart or Amazon doesn’t “help our economy”. Rather it accelerates the cannibalization of Small Business in the retail space. Part of the problem, not the solution.
Almost all of us already have a (too) small collection of small businesses that we patronize at least occasionally. Go out of your way to visit these businesses more often. And if your own economic well-being permits, spend more per visit.
It’s not charity. As already explained, spending money at smaller businesses is the best possible investment in our COVID-crippled economies.
“Adopting a small business” does not mean ordering fast food from Skip the Dishes. You don’t build a healthy economy off of minimum-wage delivery jobs.
Get off your ass and go to your favorite restaurant (if it’s still open). These Small Business owners are doing everything they can to keep us safe.
Sit at a table. Dirty some dishes so that the restaurant needs to continue employing the support staff who serve tables and clean dishes. Spend what you would have spent on delivery charges on an extra beverage or side dish – to help pay the wages of those employees.
Are the risks greater than zero? Yes.
But (as we now know) the risk of dying from COVID is not much greater than the risk of driving itself – for people who are not in a high-risk demographic.
It’s Small Business that is on life-support today. In comparison, our own risk is relatively small. But the reward from supporting Small Business in (literally) its Hour of Peril is almost incalculable.
Small Business is not like the collection of faceless multinational corporations, with allegiances to none and no direct connection to our Communities.
Small Business owners are our neighbors. They make an irreplaceable contribution to our Communities and our economies.
Their success is our success.
Their failure would be a tragedy for all of us.
Adopt a Small Business. Be part of the solution, not part of the problem.