Don't Deport Our Best Entrepreneurs

V.3, N.35

About 120 years ago, my Grandma Anne, about five years old, sailed to this country by slow boat to escape the brutal oppression of the Cossacks in greater Russia. She contracted tuberculosis on the way, was detained in Ellis Island, and then sent back on another painful voyage home. Her mother was thrown in debtors’ prison, and Anne had to fend for her younger siblings through a miserable Russian winter. In the spring, she came on another ship, contracted TB again, only this time, immigration authorities relented and let her stay. But for her verve, I wouldn’t be here.

Almost all of us have stories like this. We are here through our ancestors, who took enormous risks and got into the country through persistence and luck. This makes the lack of compassion of the Trump administration toward immigrants all the more revolting. Sure, deport criminals. But don’t deport the people cutting our grass, raising our children, processing chickens, picking our fruit, and all the other jobs we Americans are reluctant to do ourselves.

Our current policies are not just cruel but genuinely dumb economic policy. All my business students learn in my introductory economics class that immigration creates short-term wage drops but long-term boosts to the economy. That’s because immigrants are disproportionately risk-takers and entrepreneurial.

This is the essential case being made by Frank Knapp, the founder and CEO of the South Carolina Small Business Chamber of Commerce. In this week’s interview, Frank explains his advocacy and how he has made headway on many surprising policy issues in a very conservative state. It’s a great read.

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MS: Frank, thank you for talking with us today. You have been doing serious policy advocacy for small businesses longer than almost anyone else I know. How did you get involved with small businesses and become so passionate about them?

FK: I started a public relations/advertising firm way back in 1991, and in that role, I worked with many small businesses. Prior to that, I had experience as a lobbyist in South Carolina and in public relations with our state public television network. So, I knew that small business owners worked hard and that their voices were not always being heard in the state legislature, especially when big businesses wanted legislation that was not in the best interest of small businesses. So, in 2000, I co-founded the South Carolina Small Business Chamber of Commerce to represent the general interests of small businesses. Our work often conflicts with the organizations that represent big business. We are not as well financed as they are, but we are proud of our 25-year track record of delivering victories for small businesses.

MS: I’m going to ask you about immigration policy in a moment, but first, tell us a little about your organization, the South Carolina Small Business Chamber of Commerce, and the range of policies you’ve focused on in the past few years.

FK: Our policies have been all over the map. Our earliest success was in representing small business interests in utility matters, especially proposed rate hikes. Since 2002, either I or the Chamber has intervened in every electricity rate hearing with great success, knocking down proposed rate hikes for small businesses by 50% or more. We’ve intervened to protect owners of rooftop solar, ensuring that they continue to receive full credit for generating their own electricity. We were quite involved in the fight to reduce the $9 billion construction debt of two failed nuclear plants being passed on to all ratepayers. In the state legislature, we were successful in reducing the state income tax on small business profits. And we have had success in promoting small business workforce development, government procurement opportunities for small businesses, and other issues to generally make the state more small business-friendly.

MS: That’s an impressive track record. You have also been active at the national level, haven’t you?

FK: Yes, I’ve served on the Board of the American Sustainable Business Network for more than a decade. I’ve provided testimony to Congressional committees numerous times, mostly on the need for good regulations, not tossing them all out as big corporate interests would like. I led the ASBN’s national Business for Democracy campaign and have provided leadership to other national business organizations on making health insurance more affordable and opposing massive tax cuts on big corporations. And in 2016, I co-founded the Business Alliance for Protecting the Atlantic Coast, growing it to over 40,000 East Coast small businesses, to successfully stop offshore oil testing and drilling. I put together the national coalition, Reform the SBA, to promote more small business lending. And this year, I co-founded the Secure Growth Initiative along with the ASBN, the Small Business Majority, and other business organizations to advocate for comprehensive, pro-small business solutions to our present immigration enforcement chaos.

MS: The political valence of small businesses historically has been very conservative, and the same could be said for South Carolina. Yet your organization has taken some stances that some would regard as quite progressive. How have you successfully managed to take these positions?

FK: Big businesses have always pushed the message that small businesses agree with what the big businesses want on policy. The reality is that what is good for big business is not always good for small business. Small business owners are really just your neighbors who happen to run a business. Most have the same concerns that their employees have. They want affordable health insurance. They don’t want to pay high taxes. They want their electric bills not to go up. They don’t like extreme weather events. They want their elected officials to be concerned with their needs. The South Carolina Small Business Chamber has a successful track record on all of these issues. When we frame our legislative agenda, it is always easy to understand why it is in the best interest of small businesses.

MS: So you’re currently organizing a national campaign to fight the Trump Administration’s immigration policies. You argue, in a statement you recently released, that “more than 20% of new businesses—totalling 3.9 million—are immigrant-owned, employing more than 8 million Americans and generating $1.3 trillion in revenue.” That’s an astonishing fact. Why is it that immigrants seem more entrepreneurial than the population overall?

FK: The statistics come from immigration organizations, and they do show the entrepreneurship of immigrants who come to our country. Many have been small business owners in their own countries, but could not live with the threat of gang violence or government oppression. They bring that entrepreneurial spirit with them to the United States…the land of opportunity, where if you work hard, you can be a success. They don’t come looking for a handout or to be taken care of. They want to contribute to our economy, support their community, and provide for their families. And most of us understand that we can benefit from more entrepreneurship in the country. It is what has made us great.

MS: What should be the main planks of a better national immigration policy?

FK: The guiding principles of the Secure Growth Initiative are pretty common sense:

• Secure the border and deport the undocumented with violent criminal records after due process.

• Create a comprehensive visa program addressing the workforce needs of businesses of all sizes.

• Replace mass deportation with earned permanent legal status…paying restitution, getting right with the law, passing a criminal background check, and paying outstanding taxes or debts.

• Hold the federal government responsible for the economic loss due to mass deportation policies.

These are principles that most Americans will nod their heads in agreement with. The last one, holding the federal government responsible for the financial loss small businesses are experiencing and will experience due to mass deportation efforts, is particularly important. Many small businesses have become reliant on the labor of undocumented workers because the federal government, for decades, told those immigrants to get a job and pay their taxes. We believe that the small businesses experiencing financial losses because of the dramatic immigration policy shift should be compensated by the federal government. I hope that small business owners will take the time to indicate their support on our website.

MS: How have the current immigration policies adversely affected small businesses? Give us some specific examples.

FK: Small businesses are now losing employees due to immigration arrests. Immigrant employees, even those with a legal status, are afraid to go to work. The businesses they work for are losing revenue because productivity is down. The intentional fear tactics of the federal government have also caused the immigrant community to cut back on spending, and families don’t want to go out in public, even to shop for food. All these factors are hurting local small businesses. A small general construction contractor told me that his revenue is down 50% because his subcontractors, who use immigrant labor, can’t find workers. When ICE raided a nearby business, a Jamaican restaurant catering to immigrants was almost empty, and the food prepared for the day had to be thrown out. Whole communities with immigrant small businesses have been turned into ghost towns because of these immigration crackdowns.

MS: Have the other mainstream organizations that represent business, such as the U.S. Chamber of Commerce, the National Federation of Independent Business, or the Business Roundtable, had the guts to step up on this issue?

FK: Well, let’s just say that any concerns those big business organizations have about the current immigration enforcement chaos are being expressed in closed rooms or not at all. Big corporations are conflicted. They know that the Administration’s immigration crackdowns are not good for their members or the nation’s economy. But they are afraid of criticizing the President and getting attacked on social media. They don’t want to get sideways with the MAGA base in Congress and have a target put on their backs for retribution. They believe if they can just talk to the President privately, they can change his mind.

How’s that working out? As long as the stock market stays healthy, corporate America, for the most part, will stay quiet. Small businesses don’t have the luxury of shareholders propping up their business. Our success depends on a healthy local economy, where we take care of our workers, and our customers want to buy our goods and services. What’s going on now with mass deportation works against all this.

MS: Have you been able to recruit Republican representatives to support your efforts? And what kind of traction have you gotten from other business organizations?

FK: We just officially launched the Secure Growth Initiative in late April. We haven’t had a lot of time to do everything that needs to be done, including outreach to members of Congress. We’re working on that. I am pleased with the support we’ve received from numerous national and state small business organizations, as well as individual small businesses from across the country…California, Arizona, New Mexico, Wisconsin, Ohio, Pennsylvania, Maryland, Maine, North Carolina, Georgia, and, yes, South Carolina.

MS: Okay, final question: As you know, The Main Street Journal focuses on promoting local investment. How do you invest in local businesses in South Carolina?

FK: For 25 years, my investment in local small businesses has been in creating a governmental environment that increases their chances of being successful. Cutting small business taxes, getting tax credits for hiring new employees, supporting health care reform at the state and federal levels, fighting increases in worker compensation insurance and utility bills, supporting better access to capital and government contracts, promoting better election systems to foster more responsible government. You get the picture!

MS: Thanks, Frank, for the work you’re doing. And good luck motivating other states to follow in your footsteps.

Read all of our past interviews here.