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Big (Advocacy) Wheel Keep on Turning

April 8, 2016


Big (Advocacy) Wheel Keep on Turning

 

By John Stanford, AEO Government Relations

Unless you live under a rock, you know that AEO’s 25th anniversary celebration and 2016 Microbusiness Conference, EconoCon25, is only two months away (which is why you are pausing to register right now!). The three-day jubilee will simultaneously look back at the industry’s growth and look forward to the next 25 years of microbusiness. There are certain to be some big announcements and maybe even a few awards amid the impressive speakers, sessions and panels.

Apparently, Congress knows the celebration is coming too. That would explain why they have busied themselves on entrepreneurial policy – specifically acting on two of AEO’s longtime priorities: modernizing the Women’s Business Center (WBC) Program and insisting that the Labor Department recognize entrepreneurs as job creators.

Congressional attention on the WBC Program is long overdue. For the uninitiated, the WBC Program is a network of more than 100 women’s business centers nationwide, all of which are resource partners of the Small Business Administration. They are the only SBA partners that are required to provide assistance to women entrepreneurs. That training has never been more valuable as women start business at four times the rate of men and research finds that companies receiving this kind of training and counseling are far more likely to stay in business.

In other words, the program is pretty darn important given election season talk of “job creation.” And yet, the WBCs still operate under outdated legislation from the late-90s. The amount the program actually receives ($17 million in FY16, thanks in part to AEO advocacy efforts) is now greater than its authorization level – a rare occurrence showing more than a little policy malaise. Individual center grant levels remain unchanged despite some centers entering their third decade with the ability to do much more.

That is why AEO, in partnership with the Association of Women’s Business Centers (AWBC) and Women Impacting Public Policy (WIPP), took ideas to Congress – and turned them into legislation. In 2015, the Senate acted first, advancing the Women’s Small Business Ownership Act (S. 2126). The reforms to the WBC Program in that bill are the product of years of advocacy on the need for modernization.

Our coalition, however, knew another large hurdle lay in the House where, for many years, the Small Business Committee has advocated for the termination of the WBC Program. An annual letter to the Budget Committee refused to acknowledge the more than 100,000 women entrepreneurs served each year by the program.

So it was with great excitement and fanfare last week that the Committee approved the Developing The Next Generation of Small Businesses Act (H.R. 207). The legislation addresses many entrepreneurial development programs, including Small Business Development Centers (SBDCs), in addition to WBCs.

While the bills are different, both the House and Senate legislation share key elements:

  • Increasing Authorization Level to $21.75 million
  • Increasing the annual grant amount to individual centers
  • Streamlining the application process and facilitating increased communication with WBCs on program operation
  • Allowing financial flexibility through limited waivers of matching requirements and additional funding options

AEO’s work to secure the final passage of these reforms is well underway, and we look forward to reporting in the coming months that the actions of the House and Senate Small Business Committees were the turning points in this effort.

But Women’s Business Centers are just one avenue for entrepreneurial training to reach aspiring business owners. For many, another option is training from organizations supported by state Workforce Investment Boards (WIBs). For the unemployed – including millions of Americans still reeling from the 2008 financial crisis and ensuing downturn – workforce board-supported organizations supply invaluable job training.

Would-be-entrepreneurs, however, are left out of this support network. Funds are rarely allocated to provide entrepreneurial training because workforce boards have no metrics to show the progress required by government.

This is a crucial point.

Workforce boards receive their monies based on their impact – more jobs created/people employed, more funds. The system WIBs report into, though, has no measure of job creation for someone who starts his or her own business. State boards look to the Department of Labor (DOL) for guidance on these measures, but for nearly a decade, DOL has not provided a metric for states to use.

The impact is profound. Because WIBs cannot count the self-employed toward their goals, they lack incentive to promote meaningful training for entrepreneurs. This continues to operate counter to what we know about self-employment. Entrepreneurship is the job creator of the 21st century, but is left incompatible with existing regulations.

AEO is advancing a solution. In response to the Workforce Innovation and Opportunity Act (WIOA) proposed regulations, AEO – among many others – explained that several measures could be used to gauge business (and thus job) creation. In our view, the WIOA regulations offered the perfect opportunity to refresh the metrics required. The Act itself was a major overhaul to workforce investment generally.

AEO asked DOL to adopt any of a broad range of metrics, like obtaining a tax ID, opening a business checking account or securing seed funding. These business measures could be considered successful outcomes for self-employment, which will allow states to allocate funding to WIBs, which in turn can support organizations providing entrepreneurial training. Problem solved, right?

Not quite. On this issue, the Labor Department has been reticent to advance entrepreneurial ideas. That is why AEO went to Congress looking for support. We found it in a Congressional letter  recently sent to Labor Secretary Tom Perez. The diverse group of Representatives signing the letter agreed that DOL should not miss an opportunity to solve this issue, noting that this kind of change “is exactly the kind of outcome that Congress originally sought to provide when drafting WIOA.”   

We will not know until June if DOL includes this critical change in the final regulations. But adding Congressional focus to this important opportunity strengthens the body of businesses, organizations, and now politicians, watching closely. We are optimistic that all of these efforts will shape workforce training for years to come.  

It has been a big month in Washington for advocacy, all conveniently leading into the much-anticipated celebration of AEO’s quarter century commitment to microbusiness. Bringing entrepreneurial training to women and the unemployed – that’s worth celebrating too.

We’ll see you in May.

John Stanford is AEO’s Director of Government Relations. When not on Capitol Hill advocating for entrepreneurs, he can be found at local golf courses – often in the woods. He also once saw Tina Turner live in London, which inspired this article’s title. 

             


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