The constant criticism against Donald Trump from the left in Congress, the democratic presidential candidates, and the talking heads on cable TV is that his economic policies only benefit the rich. Nothing could be further from the truth. But it’s a narrative almost never challenged and yet begging for to be challenged.
Small Business Is Booming
The record setting growth and employment levels we’re enjoying today are due, in large measure, to the formation of new small businesses across the country. Even while much of the rest of the industrialized world teeters on recession, small business is booming in America. And although it’s not publicized much in these charged political times, small business activity is the key factor between a healthy economy—or a weak one.How big of a factor are small businesses for the U.S. economy?
Small Business Formation Key For Employment
But it’s not just the existence of small business that’s so essential for a sound economy. The rate of small business formation is what drives new job creation. That’s because the growth rates of new businesses will typically outpace those of established businesses. Even in an expansive economic era, relatively speaking, small businesses over five years old don’t move the needle on employment numbers.Why is Small Business Formation Booming?
There are several reasons for the boom in small business creation. After the Great Recession, many people were laid off and formed small businesses out of necessity. Job creation did follow, but was also hampered by the message of social justice Barack Obama telegraphed to the country. Remember, Obama was a half-term senator and former community organizer. He never had a real job, never had to meet a payroll. People expected and got higher taxes, more regulation, lower expectations among business people, and of course, the Obamacare taxes and mandates.On the flip side, Trump understands business people and what it takes to succeed in that world. From the moment he won the election, Trump’s business-friendly tone led business people to expect a business-friendly administration. Their expectations have been fulfilled. Under Trump, both consumer and corporate tax rates have been cut and anti-business regulations reduced.
Trump Speaks the Boomers’ Language
There is another very interesting, generational, and demographic impact of Trump’s business-friendly policies. Almost 55 percent of small business owners in America today are over the age of 50. And of those, men make up about 75 percent. Of the over-50 entrepreneurs, more than 40 percent started their business to fulfill their passion, while 33 percent did it because they had the opportunity to do it.Intuitively, one may have thought that Millennials would be leading the way down the entrepreneurial pathway. But not so much. Millennials only make up about 16 percent of the entrepreneurs in the country. There may be a few reasons for these surprising statistics.
Another factor may be a different generational mindset. There’s no question that Barack Obama’s was most popular among Millennials, who view him as the best president. Their sense of top-down government involvement in the economy is one reason for their lack of entrepreneurial spirit.
The bottom line is that economic policies and political messaging do matter. The Trump economy is growing where it counts most – with the average small business owners providing real jobs, not the phony “shovel ready jobs” of Obama government programs.