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No perfect fit for Main Street: Small-business owners fall on both sides of political line

October 27, 2008

Joe the Plumber has been getting plenty of attention in recent weeks, but what about Kimberly the Merchant or John the Manufacturer?

For all the talk about whether this year's presidential candidates favor Wall Street or Main Street, there's little discussion of the fact that neither Democrat Barack Obama nor Republican John McCain may be perfect for all small-business owners.

Indianapolis manufacturing firm owner John Raine is backing McCain because of his stance on taxes and labor unions. Local shop owner Kimberly Ba, on the other hand, was drawn to Obama's camp by his promise of health care for all.

Both are bona fide residents of Main Street, USA-population 27 million. In Indiana alone, small businesses represent more than 90 percent of all Hoosier-owned employers and their owners and employees together represent 43 percent of all voters nationwide.

It's a powerful voting bloc, to be sure, which explains the candidates' attempts to reach Joe the Plumber and his entrepreneurial brethren. But it's a diverse enough group that not even the National Federation for Independent Business, the country's leading small-business advocacy group, will endorse a candidate for presidents, given its members' varying interests.

"We just haven't chosen to get involved in the presidential race," said Mike Diegel, media director for the NFIB.

The NFIB Web site explains that the issues voters take up in the presidential election are too complicated to be able to boil down to a single recommendation for small business.

The policy holds only at the national level. The NFIB's Indiana chapter endorsed Republica Gov. Mitch Daniels' bid for reelection, citing his effort to shake up the status quo. More than 90 percent of members who responded to an NFIB state survey indicated they prefer Daniels to opponents Democrat Jill Long Thompson and Independent Andy Horning.

The preference for president isn't as clear-cut, thanks to hot-button issues like health care and taxes. IBJ got a feel for Indiana's Main Street by talking with several Hoosier entrepreneurs:

Health care

Kimberly Ba didn't need to worry about health care when she first started fair-trade shop Dianbaar in City Market last year.

Ba, 43, knew that might be a problem when she started her company, but decided the risk was worth it. Her husband, Cherif, had a day job that provided insurance coverage for the family.

Then he lost his job and they lost their health insurance. Although he found new employment, it didn't offer health care. They went without for a while, unable to afford the $800 monthly cost.

"The only thing we had to do was try to stay healthy and hope that nothing bad happened to us," Ba said.

Ba said she thinks the lack of health care holds people back from leaving their safer jobs to take risks as entrepreneurs. So it's no surprise Obama's plan to provide health care to all Americans appeals to her.

"If you want to be an entrepreneur or self-employed, you can't do it because you're afraid if something happens to you, you have illness, an accident, you're going to be in a lot of financial difficulty," Ba said.

She looks to friends in France who get health insurance from the government as a model for what America could be doing.

Ba supports a national health care plan, as long as it's done correctly. McCain's $5,000 tax credit doesn't appeal to her at all.

"A $5,000 tax credit won't help if you have to go out to a private insurance company," Ba said. "That's probably one of the biggest turnoffs with John McCain, this $5,000 tax credit."

Taxes

John Raine's choice is equally clear: He's a McCain man.

"Barack Obama, his policies are very anti-small business," said Raine, the 52-year-old owner of Anderson-based Raine Inc.

Raine Inc., which has 14 employees, manufactures a number of items such as cell phone cases, paramedic pouches and other accessories used by the military.

His company posts more than $250,000 in profit each year, so it would see its tax rate increase under Obama's plan. He's never tried to influence his employees' votes-but this year may be different.

"This year, I'm going to have to inform them about what could happen under Barack Obama," he said. "If he's elected, [his tax proposals] will affect their benefits. I have to tell them what the risk is to them."

Joe Sergio shares his distaste for Obama's tax plans.

"Upper income levels are already taxed more to begin with," said Sergio, president of South Bend-based First Response, a disaster-response agency. "I view Obama's approach as very naïve and destructive to small business."

Small-business owners aren't necessarily taking home huge profits, he said, since they reinvest a good portion of their income in their business. He thinks if they aren't overtaxed, entrepreneurs will be able to expand their businesses and create jobs that will keep the economy flowing.

Sergio said he believes McCain's plan to reduce the corporate income tax to 25 percent will allow him to keep his business growing by having leftover cash to re-invest in the business.

"What's happening in the country is that much of the media are casting corporate America as evil people ... the majority of businesses are trying to be profitable and creating jobs," said Sergio, 52.

The Democrat's lack of political experience also is a turnoff in Sergio's eyes.

"Obama has never been the president of a company; he's never been the executive of anything," Sergio said. "If he sent in his resume, with his level of experience, I wouldn't give him the keys to my business, much less to my state or my country."

Labor

Franklin coffee shop owner Susan Severyn won't say who she's voting for, but she's not a big fan of continuing to increase the minimum wage.

"It affects my profit margin, so I can't afford to put as much back into the business ... because I have to pay people more," said Severyn, who owns Benjamin's Coffeehouse in Franklin, "and you don't necessarily get more work out of them just because minimum wage went up."

McCain hasn't taken a stance on the issue, but Obama's plan calls for raising the federal minimum wage to $9.50 by 2011, then keeping pace with inflation.

Right now, Severyn has five employees, but she said that she wouldn't be able to maintain them if the minimum wage increased. She tries to pay 50 cents above the minimum.

"I can't afford to have as many people here at the store, so customers have to wait a bit," she said.

But the minimum wage isn't the only labor issue that's coming up this election season.

Congress is considering the Employee Free Choice Act, which would force employers to recognize unions formed by so-called "card checks," a process that eliminates secret elections by having employees turn in authorization cards.

Obama supports the measure, while McCain proposed an alternative that mandates a confidential process.

The Free Choice Act aims to keep employers from pressuring their workers to oppose unions, but Raine, the Anderson manufacturer, worries that those same workers would be pressured by union organizers instead.

"That would lead to intimidation of workers who may not want the union but are afraid to vote against it in public," Raine said.

He doesn't think that his company will have a problem, as he tries to treat his employees well, but admitted that he could be surprised. Raine said unions drive up the cost of running a business, making them less profitable.

Energy

Mass Ave flower shop Watt's Blooming has been keeping up with gas prices by being flexible, but owner Amy Watt is still looking for a change in Washington to make it easier to run her business.

She started the shop seven years ago, and just recently decided to share her space with Circle City Basket Co. owner Chad Hosier to save money. They share utilities, rent and sometimes even delivery vans and her driver.

It has been increasingly important to watch her budget as her costs have increased; Watt spends about $150 per week on gas. As a result, she has doubled her delivery fees in the last seven years.

Other expenses are rising, too, as her suppliers also are facing rising energy costs. Added to that, she has fewer customers.

"We're a luxury item, and luxury items tend to suffer when economic times get hard. People start pinching the pennies," said Watt, 36.

Like many people, she is waiting for the election and the change she thinks it may bring. Her vote is going to Obama.

"He's geared towards helping the smaller small businesses," she said.

His energy proposals appeal to her, too. Watt believes that offshore drilling-which McCain supports-is too risky for the environment, but she's all for Obama's "Use it or lose it" approach to force oil companies to tap all available sources of oil.

"If the oil companies have all this land that they're sitting on top of and they're not drilling, use what we've got," Watt said. "If it's sitting there and they own it, let's drill there. It may take money to do it, but let's drill there if it's already purchased for that purpose."

Watt also likes the Democrat's support for developing alternative energy sources.

"I definitely believe Obama's going more towards the 'Let's make better options,'" she said. "He might not be as popular with some people because he wants to spend more money on it, but I think he's definitely in the right. ... You have to spend money to go towards a better direction."

Main Street votes

With the election just over a week away, the candidates clearly are still making their cases to small businesses.

In their final debate Oct. 15, the candidates brought Joe the Plumber into the national spotlight, mentioning the Ohio tradesman-whose last name is Wurzelbacher- 26 times, using him as an example of an average small-business owner.

State NFIB Director Barbara Quandt said the media also seem more interested in small business this election season.

According to U.S. Small Business Administration statistics, small businesses employed more than half of the nation's work force in 2007 and represent about three out of every four new jobs.

Whoever Joe-and Kimberly and John-vote for, they will make their voices heard.
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