Wednesday, September 12, 2012

Democrats Need to Recognize the Self-Employed

There are over 23 million self-employed Americans. They account for nearly three-quarters of American businesses, with over a trillion dollars in receipts. The labors of the self-employed are as old as agriculture, and as new as computer programming. The self-employed cut across political party, age, sex, education, religion, creed and geography. They are the backbone of rural and many local urban economies. Because of the Self-Employment Tax, they are acutely aware of their identity as “self-employed,” but not of their large numbers and diversity in the United States. The self-employed are also the fastest growing and largest untapped voting block in the country. Their influence can easily swing future Congressional and Presidential elections.

From 1980 to 2000 non-farm sole proprietorships doubled from 8,892,000 to 17,905,000, while union membership declined about 1.5 million to 16,258,000. By 2006, union membership had declined to 15,390,000, while the number of self-employed had increased by 3.5 million to over 23,000,000 (including farmers). This hugely important change in the demographics of the American workplace must be recognized and acted upon by the Democratic Party, if it is to build its majority in Congress and retain the Presidency.

Unfortunately, the Democratic Party, like the Republican Party, has little recent history of supporting legislation that would help the self-employed. Federal, state and local governments have made the self-employed the highest taxed, most regulatory burdened, least protected citizens. Consequently, the majority of the self-employed are voting Republican in the hope that government will leave them alone. The self-employed are the backbone of rural America, and any change in the political direction of rural America will come about only when Democrats recognize and promote the importance of the self-employed to the rural economy and its quality of life.

Politicians indirectly refer to the self-employed as “small business,” but the term “small business” is code to the self-employed for being ignored. The Small Business Administration gives the self-employed less than one-tenth of one percent of SBA loans, and the SBA defines a “small business” in manufacturing as a firm with less than 500 employees.

Republicans use the term “small business” often because they have calculated that using this term will win Republicans votes; their avowed economic policies, however, have not helped the self-employed.

Democrats can turn the Republican Party’s small business mantra to their own advantage by reaching out to the 23 million self-employed Americans by name and recognizing their issues.

If the Democratic Party wants to reach the self-employed, they must first use the name of this producer group: “self-employed.” If proposed economic plans do not refer exclusively to the self-employed, but include other small businesses, then Democrats should use this phrase: “small business and the self-employed.”

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