Small, Medium or Large: All Businesses are Needed — and Need Each Other

By Rob Schwarzwalder Published on October 24, 2016

Wall Street and Main Street are distinct, but they are hardly separate.

Among the usual targets of (frequently manufactured) political indignation are corporate America, Wall Street and “big business.” The leadership of large firms presents a ripe target for politicians looking for faceless but powerful adversaries they can roast over the spit of public fear and frustration for fun and political profit.

On the other hand, small business advocacy ties into just about any politician’s rhetorical arsenal. As Patrick Clark writes in Bloomberg Business Week, “Hugging a small business owner, like kissing a baby, is a time-honored way for politicians to broadcast their populist spirit.”

This is, in part, why Donald Trump recently formed a small business advisory council. And Hillary Clinton said not long ago, “I want to be a small business president” because “small businesses … have to be at the heart of … creating jobs (and) driving growth.”

At the same time, Mrs. Clinton is ever eager to attack “big business.” As the New York Times noted earlier this month, she used a “fiery liberal approach” toward the “titans of business” during “her bitter primary battle with Senator Bernie Sanders of Vermont.”

When even the Clinton-endorsing “paper of record” acknowledges the demagoguery of its chosen candidate, we must be nearing the end of history. Or at least the end of election season.

The reality is that big, medium and small businesses are integrated to a degree politicians don’t like to acknowledge. For example, the Boeing 787 — just one of Boeing’s family of large passenger aircraft — draws its 2.3 million parts from 5,400 factories. According to Boeing, three-quarters of its supplier content comes from subcontracting firms in the U.S.

In its historic home State of Washington, Boeing employs about 80,000 people and other aerospace firms employ another 13,000 or so. In itself, that’s significant. However, these jobs create or support another roughly 180,000 jobs.

How does this work? Consider your friendly neighborhood Seattle area dry cleaner. This little company serves, say, 1,000 people every week whose professional attire needs the crisp, sharp look only professional dry cleaning can provide.

Why? Because those 1,000 work in either white collar jobs or industries in which employees where uniforms. Some of those 1,000 will work in big corporations. Others will work in firms that serve those corporations. And others will work in the service sectors — people like HVAC technicians, plumbers and building maintenance personnel — whose jobs exist because the corporate positions needing their support.

These many employees need places to live. Thus, houses, townhomes, condos and apartments are built and serviced. This means construction planners and homebuilders, pipefitters and electricians. It means concrete manufacturers and lumber companies. And so on.

Attacks on “big business” are favored by those who like to feel victimized. This is not to say that corporate America is flawless. To the contrary, many leaders in the larger corporations are paid in profound disproportion to their actual contributions to their own firms. Some underpay their employees and yet others seize short-term profits knowing that their actions will mean long-term layoffs.

Yet to castigate corporations simply because of their size is neither fair nor wise. Corporations are circled daily by predatory regulators and litigators, environmental extremists and union hacks. They are castigated in the popular media, almost invariably portrayed as heartless, unethical and consumed by greed. For example, in the recent film Lego Movie, the evil antagonist was called “President Business.” What could be worse than that?!

Consider a 2004 documentary simply called, The Corporation. As reported by the Dallas Morning News, the film “compares its title character to the monarchy, the Communist Party, Frankenstein’s Monster and a shark. Which company is the target of these slings and arrows? All of them, actually. ‘The Corporation’ isn’t about a particular corporation — it’s about the very institution of the corporation.”

Seldom reported are the community services big companies provide to the areas in which they are located. Their programs for employee training and education, often very generous health care benefits, and 401k retirement plans are taken for granted, even though they are not required by law.

And then there’s the simple fact that most Americans work for what most of us would consider large firms. While it’s true that “small firms employ just over half of the private-sector workforce and (have) created nearly two-thirds of nation’s net new jobs” since about 2000, it is also true that “the definition of “small business” provides important context for those statistics. The SBA considers firms with fewer than 500 employees small, placing nearly every business in the country (99.7 percent of firms that have employees) under that umbrella term — thus, it is no surprise they employ the most workers.”

Additionally, “the 0.3 percent of firms that are (classified as) large (one out of 300) punch way above their weight by creating one out of every three new jobs.”

Big and medium and small firms need each other. They are interdependent. It takes leadership to convey this rather complex and unpopular message to an America that feels frustrated, fearful and aggravated by politics and politicians. Leadership we are not seeing from either party in the 2016 election.

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