Entrepreneurship and the 2016 Election (Blog Post)

McNair Project

Entrepreneurship and the 2016 Election (Blog Post)
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Copyright © 2016 edegan.com. All Rights Reserved.

Abstract

After a powerful 60-40 victory over fellow Democratic nominee Bernie Sanders in Puerto Rico this past Monday, supplemented with an additional wave of support from superdelegates, CNN declared Hillary Clinton the presumptive nominee for the Democratic party. She now joins presumptive Republican nominee Donald Trump on still highly-contested and now highly predictable November 2016 presidential ballot. Over the course of the election, both presumptive candidates have remained, with the exception of Hillary's recent and non-specific issue webpage on small business, silent and non-committal on the topics of entrepreneurship and small business policy.

In light of this information deficit, growing concerns over the future of entrepreneurship have been amassing, as demonstrated at the Kauffman Foundation's 2016 State of Entrepreneurship Address. While specific candidate platforms have not been announced in regards to entrepreneurship, three of the main policy areas discussed in the election; health care, economic regulation, and immigration, all directly relate to the prosperity of an American entrepreneurship ecosystem. Through an analysis of Clinton and Trump's statements in these three topic areas, a better understanding of the potential post-2016 futures of entrepreneurship may come to light.

Health Care regulation, specifically the [Affordable Care Act|Patient Protection and Affordable Care Act], also known as "Obamacare," has been accused of "killing" small business. A 2012 Gallup poll of small business owners found that nearly half of small business owners point to potential healthcare costs (48%) and government regulations (46%) as reasons why they are NOT hiring new employees. In spite of this survey, the 2009-2015 head of the Congressional Budget Office, Douglas Elmendorf, and John Arensmeyer, founder and CEO of the Small Business Majority, have both released statements questioning any long-term negative effects of the Affordable Care Act and have even suggested that there will be benefits. Little conclusive evidence has been found on the effects of the Affordable Care Act on small business one way or the other.

Economic regulation, in a similar vein to healthcare reform, has been purported as a cause for the decline in small business. In a 2015 report from the Center for Regulatory Solutions Karen Kerrigan, the president & CEO of the Small Business & Entrepreneurship Council, suggests that a general streamlining and reduction the United States' economic regulations would help the growth of small business. The 2016 New Entrepreneurial Growth Agenda published by the Kauffman Foundation, proposes that reform in small business regulation and an decrease in regressive "barrier" regulation is the key to small business growth, and that increased regulations on larger companies may be beneficial. Across both theories little empirical evidence exists to show the effects of regulation on small business and rather are generated through the studies and opinions of experts in the field.

Immigration has been highlighted by the Small Business & Entrepreneurship Council as a key issue in small business and entrepreneurship. The council cites a 2012 report from the [Small Business Administration] that reveals higher rates in business ownership, business formation, business exportation among the U.S. immigrant population as compared to the non-immigrant population. The council further quotes a 2014 Kauffman Foundation report in saying that "Immigrants were nearly twice as likely to start businesses each month as were the native-born in 2013," as well as Karen Gordon Mills, the former Administrator of the U.S. Small Business Administration, as saying: “In 2011 alone, immigrants started 28 percent of all new U.S. businesses, despite accounting for only 13 percent of the U.S. population." The array of above testimony seems to imply that a healthy intake of immigrants is an important component in a healthy entrepreneurship ecosystem.

Returning to the presumptive Trump v.s. Clinton ballot awaiting America in the Fall, it is imperative to review the two candidate's positions across these three areas. Hillary Clinton, whose website claims she will "be the small business president," takes a strong stance on healthcare, vowing to defend the Affordable Care Act and strengthen its benefits while minimizing its detriments in regards to small business. A position which reflects the ACA's seemingly sometimes positive, sometimes negative relationship with small business. In regards to economic regulation, Clinton does not appear to be shy, supporting paid family leave, higher minimum wage, stronger unions, equal pay and 2010 Dodd-Frank financial regulation law. Her small business web page also claims that she supports reducing regulation and red tape on entrepreneurs however, once again reflecting both sides of an issue that academia has yet to find compelling evidence in. Finally, on immigration, Clinton proposes comprehensive reform promoting immigration and integration with a pathway to citizenship for undocumented immigrants and in defense of the many steps President Obama has made towards reform. On this issue Hillary Clinton seems to strongly support a healthy entrepreneurship ecosystem for the future.

On the other side of the aisle, Donald Trump wholly opposes the Affordable Care Act, stating that he will request a congressional repeal of the act on his first day in office. Furthermore, Trump proposes an absolute free-market approach to healthcare from there on out, a proposal that would have seemingly mixed results for small business. Trump has spoke out sweepingly against economic regulations and government interference as early as 2012. While vehemently against economic regulation, Trump strongly supports the 2005 'Kelo v. City of New London' Supreme Court decision which allows for imminent domain to be invoked in cases where the government would generate more tax revenue. This record on government regulation would once again seem to indicate mixed results for small business. Finally, Trump has aggressively opposed immigration throughout the campaign, proposing to "build a wall between the United States and Mexico as well as banning Muslim travel to the U.S.. Trump then, seems squarely against promoting a healthy entrepreneurship ecosystem on the issue of immigration.

Regardless of who ends up sitting in the Oval Office come 2017, entrepreneurship will continue in the United States. Across the areas of health care, economic regulation, and immigration, Donald Trump and Hillary Clinton differ greatly. While it may be difficult to determine the empirical effects of the Affordable Care Act and government regulation on small business at this time, Clinton appears to have the more flexible and entrepreneurship-focused stance on these issues. The fact that she is the only one of the two candidates to have an "issues" page on small business is a further testament to this. In the area of immigration, support for immigrants, both socially and politically, seems to bolster a healthy entrepreneurship ecosystem. In this issue and in the previous two Clinton seems to support this ecosystem better than Trump.