In an effort to not only humanize, but glorify the small business owner, workers often disappear.

Unsplash/Mike Petrucci

I n an address to the National Federation of Independent Business (NFIB), a non-profit which counts over 325,000 small business owners among its members, Vice President Mike Pence gushed that small businesses “create jobs. You provide a pathway of opportunity for generations of Americans. And you are literally the cornerstone of American communities from the smallest towns to the largest cities.” Paraphrasing President Donald Trump, Pence added that small businesses “embody the American pioneering spirit and remind us that determination can turn aspiration into achievement every single day.”

This veneration of small business is by no means specific to the Trump administration. A recent Gallup poll found that 70% of Americans have “a great deal” or “quite a lot” of confidence in small business, compared to 21% for big business.

It’s little wonder that, in pushing its unpopular tax plan, Republicans have focused on how it will benefit scrappy mom-and-pop business owners. Trump crowed that his proposed tax cuts will benefit over 30 million small business owners, cutting their tax rate by 40%. Never mind that this isn’t true, and that one of the small business owners advocating his tax plan actually runs a lobbying firm for big business. His promises have sparked optimism among some small business owners, and gushing stories in conservative outlets about how his plan is helping the little guy. (It’s worth noting that support for small businesses is not entirely partisan, with liberals often using it to promote “buy local” campaigns — but it’s conservatives who exploit the reverence to achieve their tax-slashing aims.)

“I know that a small business is really all about family — whether it’s your immediate family, your extended family, or the family of your employees,” Pence said in his comments to the NFIB.

Even liberals may find it easy to buy into this vision of the earnest, family-run small business embodying everything that makes America great. But the fact is, many small businesses treat their employees just as poorly as more readily criticized corporations. And importantly, employees in these situations are often left with fewer resources to fight back.

The employer-employee relationship is inherently unbalanced; treating small business owners as the benevolent personification of the American dream just tips the scales even more in their favor. In a system that so adamantly favors small business owners, worker self-advocacy and unionization efforts can seem like a kind of betrayal.

This is a dangerous view — not the least because, as it turns out, small business owners don’t always treat their employees all that well.

The NFIB page, despite its cheery presentation of facts, isn’t actually very impressive. In “The Benefits of Working for a Small Business” infographic, under the headline “Major Benefits,” the association boasts that a mere 38% of small businesses offer a retirement plan, while 42% offer disability insurance and 25% offer dental. The survey that provides these numbers also reveals that 21% of respondents exempt all their employees from overtime pay, while only 53.2% offer overtime to all qualifying employees.

Meanwhile, 95% of large firms offer a retirement plan (and such plans are often better than those offered by small firms) and 89% offer dental. According to an analysis from the Bureau of Labor Statistics, an average 34.4% of employees at large firms have access to disability insurance, compared to 23.4% of workers at businesses with under 50 employees, and a mere 10.9% of those employed by businesses with 50–99 employees. As for overtime pay, the 2016 Obama overtime rule would have made it harder for small businesses (and businesses in general) to exempt employees by raising the salary threshold for overtime by 100%. This law, however, was struck down in late 2016, a defeat celebrated by the NFIB.

In fact, compared to large firms (over 500 employees), small businesses are consistently less likely to offer benefits, and 2017 data from the Bureau of Labor Statistics find that access to benefits like health care, retirement, and paid leave decrease along with the size of the business. This is, of course, unsurprising, and it’s true that small businesses have a harder time meeting the costs of these benefits. But that fact does nothing for the workers going without health care and fair pay.

And it’s not just large corporations that find themselves embroiled in scandal — some high-profile labor cases have involved small businesses exploiting and mistreating immigrant workers. In 2012, Flaum Appetizing, a food distributor in Brooklyn, New York, paid a $577,000 settlement to 20 former employees, mostly Mexican immigrants, for withheld compensation. Workers were denied overtime for work weeks as long as 80 hours, and also endured discrimination and verbal abuse, including anti-immigrant comments, from senior management. From 2002 to 2003, there were a total of 1,441 lawsuits against small businesses, with the most common reason being civil rights (15.7% of all cases).

Why Should You Become An Establishment Member For $5 A Month?

In his August remarks, Pence declared that every member of the NFIB “has a story that springs straight out of the American dream.” But this dream — that the U.S. is a fundamentally fair meritocracy in which anyone can succeed through hard work and determination — is not reflected in small business demographics. In fact, 2013 data from the Small Business Administration show the same racial and class divides prevalent in all sectors of society. People of color are far more likely to be employees than owners, and owners’ education levels are comparatively high — 39.2% have a Bachelor’s degree or higher, compared to 29.2% of their employees and 31% nationwide. Employees are also more likely than owners to have a high school degree or less. The same SBA report notes that the numbers of female and, especially, Hispanic business owners have increased over the years; even so, the idea of the small business as the embodiment of the American dream — at least, for anyone not already highly privileged — simply isn’t supported by the available data.

Yet still, the image persists — and so does the centering of small businesses in debates over worker rights. Not only are small businesses used as arguments against regulation, opponents of a $15 minimum wage often invoke the plight of small business owners as well. The Faces of 15 campaign, launched this year by the right-leaning think tank The Employment Policies Institute, profiles small business owners who have been forced to shut down, allegedly due to minimum wage increases. In short videos set to melancholy music, with frequent cuts to locked front doors and empty shelves, small business owners share their stories, often stating that, as much as they would like to pay their employees more, they simply aren’t able to. In some videos, former employees mourn the loss of their jobs. Notably, it is rarely just minimum wage increases that force closure; numerous owners refer to such increases as “the straw that broke the camel’s back.” But Faces of 15 never addresses the other straws.

From 2002 to 2003, there were a total of 1,441 lawsuits against small businesses, with the most common reason being civil rights.

These concerns are, of course, legitimate — but so are the rights and livelihoods of workers. In these efforts to not only humanize, but glorify the small business owner, workers often disappear.

I corresponded with several small business employees about the labor abuses they have experienced. All asked that their last names be withheld, due primarily to fear of retaliation from their employers and people in their communities. While their experiences vary, all have faced obstacles in reporting violations and advocating for their rights, due in part to the image of the noble, well-meaning small business owner.

When she was 16, Emilee started working at a store that sold food and camping supplies in a state park and employed eight students (high school and college) each summer. For most, including Emilee, this was their first job. It was, she wrote via email, “a good situation compared to other prospects,” as the work was fairly easy and employees had significant latitude and free time. Yet Emilee also describes a toxic environment made possible by the exploitation of youthful naiveté and the manager’s community standing.

How To Survive A White Workplace As A Person Of Color

Basic cleaning and safety standards weren’t met — according to Emilee, “It was a running ‘joke’ that if the food safety inspector ever actually came out we’d all be out of a job in a heartbeat.” Employees received no breaks, no overtime, and had to underestimate total work time when clocking out. Sexual harassment was a pervasive problem: “The boss would rub the female employees’ shoulders, hug them frequently, [and] kiss them on their heads,” she says. When the girls, most of whom were underage, complained, the boss argued that “he knew most of the girls growing up so it couldn’t be inappropriate because the relationship was like a father/daughter, or so the claim went.”

Since there were no other supervisors and no HR department to field complaints, pursuing grievances would have required filing a lawsuit, which none of the young employees were empowered to do. Because the community was small — approximately 4,500 people — and the manager so well-respected, even disclosing their frustrations to others could result in pushback from people in the town and difficulty finding future employment. With regard to the sexual harassment, the female employees worried about being dismissed as lying attention-seekers: “It was young, underage girls against a married man with children who was also a revered community member.” That the manager was a teacher who had taught some of the employees in the past made it even harder for them to report infractions. Emilee says the boss “saw himself as a father figure to many of his employees […] and the converse was also true. Many of his employees felt a kinship to him.” Even those who didn’t feel this way “had a great deal of ambivalence about doing anything that might cast him in a bad light.”

If they had done so, they would have had to contend with a lack of community support. Emilee notes that people in small towns not only “know everyone’s business,” but that “everyone has an opinion — usually a very strong one — about everyone else’s business,” which can “concretize in behavior that can ultimately harm the complainants.” Thus, Emilee worried, “Would I be shut out from other jobs because public perception tends to favor men in situations of assault while framing women as liars? Would I even want to work in the community anymore because of the oppressive environment?” For her and many of her coworkers, she concludes, “it was a deeply unsettling, frustrating entrée into employment.”

Autumn works at a bridal shop with fewer than 10 employees. Though she was recently promoted to a manager position and still performs managerial tasks, she lost the promised title and wage increase after asking why she hadn’t received her overtime pay. According to Autumn, the owners told her “they would only pay me straight time, and that they were taking away my position because the ‘management position only seemed to corrupt.’” Lack of overtime pay is a persistent problem at Autumn’s workplace: “My previous manager consistently worked 90+ hour pay weeks and never received any overtime pay. However, she never complained about it, and […] I believe that’s why she was allowed to be kept on and I wasn’t.” The owners’ reason for denying overtime was that they couldn’t afford it — a common defense — but according to Autumn, “they built a million dollar house by the beachside” and “spend thousands of dollars on personal items for themselves.”

Autumn believes that “as far as pay goes we are all equally abused.” However, “any rude comments or distrust are directed mostly toward our employees of color.” The owners told one Black employee that “she looked ‘too ethnic’ when she came in the store wearing a head scarf, or when she came in with her natural hair”; when this employee called the owners’ comments offensive, they cut her hours to the point that she had to find a new job. And Autumn notes a clear double standard in the way the owners treat her, a white woman, compared to Black employees. For example, while Autumn received her key to the store within a month, “we have another Black employee who they’ve stated that they don’t trust with the key […] even though she managed multiple stores.”

This is not to suggest that all small business owners exploit or mistreat their employees. Even those who fail to compensate employees adequately or provide breaks don’t necessarily do so out of malice or disregard. Suzanne used to work at a daycare where staffing shortages often resulted in lack of breaks. This did not go unnoticed by administration, and the assistant director would add missed break time onto the staff’s total hours when doing payroll. “That was a nice thought,” Suzanne wrote in an email, “but not a solution. Still this was the only business where I actually believed that yes, the administration felt bad that this was occurring, and they did their best.”

Suzanne’s current workplace, an assisted living facility, “is a small family-owned business and they push the ‘homey’-ness factor of the place quite a lot, which I think makes them feel like they can ask more favors of us.” Suzanne has had to assert their rights numerous times, reminding the owners that, for example, paid breaks are mandated by law. “I think it surprises them that I would bring state requirements into their little homey business,” Suzanne says. Nonetheless, the facility “is viewed quite highly [in the community], and I too believe that regardless of these violations, it is one of the best places in the industry that I’ve worked with.”

‘As far as pay goes we are all equally abused.’

But what the differences in these experiences show is that, for workers, finding a fair employer is largely a matter of chance. Furthermore, the lack of avenues for small business employees to file grievances means that one’s ability to self-advocate depends on factors like age, knowledge of labor law, and relative social capital. The more vulnerable a worker is — whether due to race, gender, documentation status, age, or disability — the less empowered they are to take action against exploitation and mistreatment. While Suzanne felt empowered to demand breaks, Emilee and her underage female coworkers didn’t even feel comfortable complaining to anyone outside the workplace. Autumn has both seen and experienced the financial repercussions of voicing her concerns to management. And factors like documentation status can make complaints dangerous to pursue.

Small business owners do face unique difficulties, including stiff competition from large competitors, and patronizing local businesses does benefit local economies by keeping money circulating within the community. But none of this excuses abuses against disempowered employees, and small businesses are not inherently ethical or fair. Furthermore, the policies small business owners are often used to advocate — conservative tax reform, ending the Affordable Care Act — overwhelmingly benefit big business.

Worker activism, then, must include not only employees at large firms, but small firms as well; and rather than merely “buy local,” consumers should educate themselves about the working conditions at local businesses. While concerns about the welfare of small businesses should factor into debates about the minimum wage and regulations, owners should not be privileged at the expense of workers. And we certainly shouldn’t push an inaccurate narrative so easily weaponized by anti-labor, big business advocates on the Right.

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]]> https://theestablishment.co/how-lgbtq-run-businesses-are-surviving-and-thriving-in-the-face-of-obstacles-b18e5953ef9/ Mon, 05 Dec 2016 18:28:58 +0000 https://theestablishment.co/?p=6491 Read more]]> Gay marriage may be the law of the land, for now, but LGBTQ people continue to face many hurdles. There’s the increased risk of sexual violence and the threat of police brutality. And there are also economic barriers — both on the individual level (LGBT workers, especially men, earn less on average than similarly qualified heterosexuals), and in the form of special challenges for LGBTQ business owners.

According to a 2015 Gallup study, LGBTQ business owners make up 3.7% of small business owners in the U.S. The National Gay & Lesbian Chamber of Commerce estimates there are 1.4 million LGBTQ-owned businesses. LGBTQ business owners tend to be younger and earlier in their careers compared to the general population, the Gallup study showed. They’re also more likely to rely on credit cards than their own cash reserves. Twenty-three percent of LGBTQ business owners said that being LGBTQ made it harder to run their businesses.

Despite these disadvantages, LGBTQ business owners are attempting to use their status as LGBTQ business owners as an advantage rather than a deficit. They’re finding microlenders aimed at financing LGBTQ businesses, supplier diversity initiatives are opening up to LGBTQ people, and business owners are finding ways to make their stories of love and adversity part of their business’ appeal.

Not Protected Against Discrimination

Like all business owners, LGBTQ people need to go to the bank and meet a loan officer in order to fund their new businesses. In fact, LGBTQ people are especially dependent on loan officers, because they are less likely to have savings they can use to fund their business. But straight, cis loan officers may be uncomfortable with LGBTQ business owners, whether consciously or unconsciously, experts say.

Eric Weaver, CEO of Opportunity Fund, which provides loans to small business owners who may not meet the requirements of traditional lenders, said he has heard LGBTQ business owners discuss these biases.

“Some of our clients have told us when they try to approach banks, it’s the same as what you might hear from a black [straight] business owner — I didn’t feel comfortable. I feel like I wasn’t wanted there. I didn’t feel like people wanted to do business with me as I am,” Weaver said.

And if the loan is co-signed, the applicant’s relationship to the co-signer may also be a factor. Because same-sex marriage hasn’t been legal for much more than a year, many same-sex couples haven’t been married long enough for loan officers to consider them financially stable.

“Some loan officers might put more stock in a co-signer who is legally tied up with the other person and own joint property and the rest of it,” Weaver said. “As you get into larger loans, there are human decisions involved and there are subtle biases and a traditional underwriter may look at someone who has been in a stable relationship for 20 years more favorably than over someone who is single or who was only recently married.”

Tammy Powers, owner of a Tran’s Bay Bike Shop on Treasure Island in San Francisco Bay and Tammy’s Chicken in Waffles, a waffle cart, said she has experienced this bias with bank loan officers before.

“It’s hard and when you’re asking for money or loans unless I have a rapport with that bank or that microlender,” Powers said. “You walk in and it’s that weird shocked look on their face of ‘Oh my god this person is talking to me and they’re transgender and I’ve never talked to a transgender person before.’”

There are only 12 states where LGBTQ business owners have the ability to make a complaint if they are turned down for a loan and believe it was discriminatory, says Jonathan Lovitz, senior vice president of New York LGBT & Allied Business Network. A federal bill, The Equality Act, would allow national credit protection for LGBTQ business owners but it has been stalled in Congress.

Lovitz said it is especially important for female LBTQ business owners of color to have these protections.

“You know from all the stories for women and ethnic minorities, it’s hard enough to get any kind of venture capital that way, let alone throwing in the sexual orientation and gender identity component on top of it. Many people throw their hands up and say it’s impossible,” Lovitz said.

Natasha Case, co-founder of Coolhaus, an ice cream sandwich truck business, founded the business with her partner, Freya Estreller, in 2008. Case said that people she worked with often did not realize she and her business partner were a couple. Sometimes, people reacted badly when they found out, and she had to choose whether to continue to do business with them.

“I do think that particular facet of being a gay couple when we started, even though it’s not that long ago, we felt like it was trickier territory to navigate, even in L.A. being in a young brand,” Case said. “I still think there was more of a question mark for some of the people who were starting to work with us about their opinions. When you’re younger and starting out, you think, ‘I’m going to work with this person and neutralize it a little bit,’ and when you’re a little older you realize, ‘Why would I even want to work with someone who is not accepting?”

She said there is also a lack of representation for lesbian business owners on LGBTQ business panels, so there is a lack of role models.

“For LGBT people, it’s very different between the G and the L. And G is still in a man’s world,” Case said. “Whenever I speak on panels, I speak openly about Freya and I hope that encourages people who don’t know I’m a lesbian to see a positive role model. On a UCLA panel, I was the only woman on the panel. It was like eight gay dudes and me. I’m really glad to be up there to be representing the women.”

She said her sexuality is not always a disadvantage in that sometimes male business owners are more comfortable around her. But sometimes they get too comfortable and make misogynist comments, which she speaks out against.

Powers said she has also experienced professional exchanges with cisgender people where they feel incredibly comfortable asking invasive questions about her body.

“They jump into really rude questions — ‘Are you pre-op or post-op?’ — and I’m like ‘You’re asking about my genitals.’ And they’re like, ‘You’re transgender so I thought we could talk about everything’ and I say, ‘No not at all. That’s not normal,’” Powers said.

She said her gender has also affected the way people view her capability as a business owner. Whereas her ambitious plans received praise before she transitioned socially, now she faces a lot more skepticism.

“I still have that same exact drive. It’s just how people perceive me,” Powers said. “Because I’m no longer a male, I’m not as much of a leader or I need someone to show me something or ‘You can’t do this all by yourself,’ but I’m the same person!”

Visibility Is Everything

There are times when LGBTQ people can use their identity to create a powerful story for their brand. Natasha Case and Freya Estreller‘s love story created interest in their brand and helped spread news about their business to the national level. They now have a national fleet of ice cream sandwich trucks. They released a book, with beautiful photographs of the electric blue California sky and pastel hues of their ice cream, with ice cream sandwich recipes and stories about their experience building a business together.

Case said it was a challenge to bring their personal life into their business brand at first but they adapted to this reality quickly. She said it is “undeniable” that their story is a big part of their brand.

“Just being younger in business and wanting the business to be about the business, we didn’t necessarily know how to tell a story or be a face in the way we do now,” Case said. “I think over time as the business grew, it became easier to bring in all of this other stuff about who we are, such as my design background, being from L.A., being women, being a couple who is married, being ethnically diverse, whatever those identities are.”

Powers also has a powerful life story as a woman who built her business against difficult odds. Four years ago she was homeless, but despite that economic insecurity she managed to share her vision of a bike shop on Treasure Island with the Treasure Island Development Authority and rent out space in a basement to get started. She didn’t have next month’s rent or the phone or internet hooked up yet, but after hanging up signs at bus stops, people began to come in.

“They were shocked there was a bike shop, shocked it was owned by a trans person and people warmed up to me. I’m a very friendly person and I love bicycles and so eventually people were like, ‘Wow, there really is a bike shop on this island,’” Powers said. “It has almost become an advantage to me that I’m trans. Once you pick up the ball and start running with it it’s like, ‘Holy cow, look at this person who is running with the ball and wow they happen to be trans and they’ve overcome all these things,” she said.

An investor recently reached out to her and loaned her $5,000 after hearing about her life story and her businesses. Powers hopes to expand her business and open another bike shop on the island.

Visibility as an LGBTQ business owner can also help grow a business. For example, the National Gay & Lesbian Chamber of Commerce helps LGBTQ business owners get their businesses certified as an LGBT-owned business. This certification allows business owners to connect with corporate supply chains since corporations have diversity initiatives and look for these businesses in a database of LGBTQ-certified businesses.

Several states have been including LGBTQ business owners in diversity initiatives that include people of color and women. California’s utility supplier diversity program, which certifies woman- and minority-owned businesses to bid on business from large corporations that mandate supplier diversity, now certifies LGBT business owners as well. Similar programs are underway in other states: Last fall, Massachusetts Governor Charlie Baker issued an executive order to include LGBT-owned businesses in its supplier diversity program, and New York state senator Brad Hoylman has introduced comparable legislation, though it hasn’t been enacted.

This friendlier business climate, despite continued challenges, is encouraging owners like Powers, who looks forward to employing people and treating them fairly, in contrast to the way she has often been treated during her career. Through the success of LGBTQ business owners, there may be more opportunities for LGBTQ employees to thrive.

“They’ll say, ‘I work for Tammy Powers. She takes care of me. I have a good coverage. I go on vacation, and she pays for it,” Powers said. “I want people to work hard for me and then I want to pay them and provide them a good living. That would be so satisfying.”