Reducing the deficit is necessary for the nation’s long-term fiscal health, but the main focus of Congress and the president should be creating jobs. Federal Reserve Chairman Janet Yellen rates jobs and unemployment as the nation’s top priority.
In 2012, 36 percent of business owners were women with 7.8 million firms. Veterans comprised 9.1 percent. Nearly 15 percent of all U.S. businesses were non-white, and 10 percent were Hispanic. The most recent statistics collected in 2007 show there are almost 6 million minority-owned firms: 2.3 million Hispanic, 1.9 million African-American, 1.6 million Asian-American, and 300,000 Native American/Pacific Islander. They contribute more than $1 trillion to the U.S. economy, according to the U.S. Census.
The major obstacle to creating jobs is insufficient demand for goods and services. To create jobs and spur economic growth, policymakers should focus on how to build demand for American-made products, particularly for small, minority and women-owned businesses that create two-thirds of new jobs.
The economic fabric of our country is still fragile. Interest rates are beginning to move up with little evidence that banks will lend to small businesses. While capital is the lifeblood of all businesses, the lifesaving medicine is selling products. Without increased demand and sales, businesses will struggle, and job growth won’t pick up.
Many of the new jobs being created are low-paying even in fast-growing sectors. Wages are flat, while the income of top 1 percent soars.
The government should focus on contracting more with established small businesses. The government could save thousands of small businesses and create jobs by increasing the prime small business contracting goals from 23 percent to 25 percent. Our federal government buys almost $500 billion annually from businesses, with about 80 percent going to large businesses. With the stroke of a pen, Congress and the president could increase the small business share by just 2 percentage points and add $10 billion to the economy.
Our government should reprioritize contracting planning and acquisitions to expand business with small, minority, veteran and women-owned businesses with a new initiative called Small Business First.
The House Committee on Small Business has introduced legislation to increase small-business prime-contracting goals from 23 percent to 25 percent and subcontracting goals from 35.9 percent to 40 percent. The bill promotes accurate reporting and transparency by requiring that only prime contract awards count toward the prime contract goal.
Contact your elected officials and urge them to support this legislation.
Roger A. Campos is president and CEO of the Minority Business RoundTable, a nonprofit organization.
