Small businesses, a vital component of the American Dream, are a significant force in the United States. Their vast number, a staggering 33 million, with almost 40 percent being women-owned, underscores their importance. More than just numbers, these enterprises are the foundation of our economy, providing jobs to a substantial 62 million Americans, comprising 46 percent of all private sector jobs. However, the perspective of labor union bosses and their political benefactors is starkly different. They see small businesses as a fertile ground to compel millions of Americans to join a union and pay mandatory union dues.
This stark reality was recently underscored by a comprehensive report from Sen. Bill Cassidy (R-LA), the Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee. Titled “How Biden’s Labor Agenda Puts Politics Over People,” the report meticulously outlined how the Biden administration’s pro-Big Labor policies will come with a heavy price to entrepreneurs, small business owners, and the people they employ if implemented.
Take, for example, its assault on independent contractors in the gig economy.
In 2020, California became the first state to bar independent contracting, destroying the livelihoods of hundreds of thousands of workers, from freelance writers to massage therapists. Rather than stand up for these workers, the Biden White House is standing with the unions (which dislike independent contracting because independent contracting doesn’t involve compulsory unionizing) by endorsing the PRO Act, legislation that would impose California’s rule nationwide.
Studies show that imposing the PRO Act would increase employment costs by up to $61 billion and destroy up to $2.3 trillion of gross domestic product. Yet, Mr. Biden has made its enactment a centerpiece of his efforts to garner political support from union operatives in this election cycle.
The administration’s joint employer rule is also wholly insensitive to the needs of many American businesses. If enacted, it would make both the individual franchisees and parent companies liable for employment law violations made by the former.
Unions have pushed for this policy’s enactment because it would force all of a franchise’s employees into collective bargaining, which would allow union bosses to organize thousands of new potential union members. However, it would also come at a high cost to the US economy.
When the Obama administration implemented a similar proposal, more than 375,000 jobs disappeared at a cost of more than $33 billion to economic productivity. Small businesses stand to lose from the joint employer rule too because it would significantly reduce the number of franchise opportunities on the marketplace — the most secure, low-risk way to enter the business world — destroying scores of jobs in the process.
Earlier this year, a federal court struck down this regulation, but the Biden administration appealed the decision, while President Biden even vetoed bipartisan legislation to overturn the rule.
Even when it comes to the cost of prescription drugs, the White House is siding with union interests over the interests of small businesses and their employees.
Everyone in Washington knows that the drug industry is spending millions of dollars in support of causes and candidates who do their bidding. Rather than take them on, however, the White House is supporting new regulations on Pharmacy Benefit Managers (PBMs), companies that businesses hire to negotiate bulk purchasing discounts with the drug companies. The Biden administration targeting them might please the unions (Big Pharma contributes handsome financial sums to them), but the business community and its employees do not stand to benefit.
Sen. Cassidy is right. What’s good for Big Labor is often quite inconsistent with what’s good for small businesses and their workers. From labor laws to healthcare costs, these Biden initiatives could impose heavy financial burdens and reduce the operational flexibility that America’s entrepreneurs’ owners rely upon for survival. We should continue to highlight the detrimental impacts these regulations have on the backbone of the American economy, while doing everything we can to create an environment where these upstarts can continue thriving, innovating, and leading the way in job creation and economic growth. It’s the only sustainable path forward.
