New Yorkers Don’t Want Hurdles to the Small Business Comeback
Written by President & CEO Javier Palomarez. This article can also be found on Medium.
New York-based small businesses — many of them started by entrepreneurs in minority communities — are working hard to make a comeback after facing unprecedented challenges during a global pandemic. Yet some of their congressional representatives are considering proposals that would set them back, once again.
Senators led by Amy Klobuchar and Chuck Grassley recently introduced legislation to curb the growth of large tech companies like Google, Microsoft, and Apple, as well as the retailer Amazon. Supposedly this helps small businesses — but only under the zero-sum assumption that as these big companies grow, small business revenue collapses. It posits that their growth cannot be connected and mutually beneficial. Yet a growing cadre of New York’s congressional representatives seems oblivious to the real-world effects of this false assumption.
Earlier this summer, several members of the New York delegation — including Reps. Jerry Nadler, Mondaire Jones, and Adriano Espaillat — co-sponsored similar legislation in the House. The co-authors of the bill have been clear that it is intended to hit four companies they perceive to be too large and powerful. Even if the genuine intention behind this legislation is to help small businesses, the end result of these misguided efforts will be a blow to New York’s economy and its minority business owners.
If this bill becomes law, treating “similarly situated business users” differently will become illegal. For example, Amazon will be banned from promoting a local minority retailer’s clothing line, or an ethnic supermarket’s unique products, over others. If customer demand and satisfaction indicate a strong preference for a particular company’s products, online platforms would be prohibited from raising the profile of that company, as it could be perceived as disadvantageous to other sellers.
These restrictions can make it difficult for Amazon to effectively and efficiently operate a marketplace while competing with other large and growing marketplaces. Some experts say the bill could force Amazon to shut down its marketplace entirely to avoid staggering financial penalties by regulators. All of this stands to hurt the minority enterprises that partner with larger companies like Amazon to grow their business and earn a good living.
Right now, more than 500,000 small and medium-sized businesses use the Amazon platform to sell their products, expanding their customer base from their local neighborhoods to a global audience. Many of these are mom-and-pop businesses that employ approximately 1.1 million Americans. And almost one-fifth of those business owners call themselves New Yorkers, with a substantial portion from minority communities.
Amazon introduces consumers to small, niche businesses they would otherwise not know exist. It also gives small business owners a gateway to a global audience they otherwise would find difficult and costly to reach.
Changing the rules of the road at such a volatile moment in our economic recovery is ill advised. New York’s businesses have hired staff, increased production, and expanded their physical spaces all based on the premise that they would have access to a vibrant online network that would allow them to sell their wares to customers all over America. Small businesses immeasurably benefit in having access to a marketplace as innovative and successful as Amazon’s. Removing that access comes to their detriment.
Regulatory action for the sake of scoring political points is short sighted. Americans concerned about tech companies want lawmakers to protect their privacy and security online, not eliminate a viable revenue stream for small businesses or services that make their lives easier.
If New York’s congressional leaders truly want to help their constituents’ struggling small businesses, they should be proactively looking for solutions. They should propose legislation that enhances the opportunities of small businesses — particularly from minority communities — for state and federal contracting and access to capital and seed funding. Senate Majority Leader Chuck Schumer must oppose any efforts to stunt the comeback that he and his colleagues have worked tirelessly to generate through their bold infrastructure investments. That is how legislators could build New York back better.
Tearing down barriers to entry — not building them higher — is the formula for economic growth and small business success. New York City Mayor-Elect Eric Adams recently claimed that the city he will soon lead has a culture problem, entrenched in a “a culture of can’t and a culture of failure.” His administration promises to jumpstart a “culture of yes,” sparking innovation, creativity, and solutions. If New York’s history is any indication, its citizens will rise to the Mayor-Elect’s challenge, as long as their congressional delegation does not impede their path.
Written by Javier Palomarez. Javier Palomarez is the President and CEO of the United States Hispanic Business Council (USHBC), a 501(c)6 non-profit organization focusing on improving access to contracting in the public and private sector and fair representation of Hispanics in business, media, and politics.
