Remarks at a White House Briefing for Members of the Small Business Community
Thank you very much, and welcome to the Old Executive Office Building. It's wonderful to have you all here today and to have this chance to celebrate America's small businesses. I'm happy to hear from Jim Abdnor that the state of small business in this economy is strong and growing. I was asked some time ago what the difference is between a small business and a large business, and I said a large business is what a small one would be if the Government would get out of the way. [Laughter]
But in a sense, that's what the last 7 years have been all about: getting the Government out of the way. When we first came to town, there was a lot of getting out of the way that needed to be done. If you were a small businessman or entrepreneur in those days, the outlook was not bright. Nearly everywhere you turned the Government had set up a roadblock in your path.
Double-digit inflation was eroding your savings and the savings of everyone who might be a potential investor in your business. That same inflation was driving interest rates sky high. It got to the point that to borrow money you had to be so rich you didn't need it. And then there were the taxes: 70 percent top rate on individuals and 46 percent on corporations. And bracket creep meant that you got a tax hike every year, even if you were just holding even.
Added to all these problems were the volumes of governmental regulations. It seemed that those in government thought they could run businesses better than businessmen. You know, it's said that the 10 most frightening words in the English language are: "Hello, I'm from the Government, and I'm here to help." [Laughter] Well, any more of that kind of government help and our economy would have gone right down the tubes. With taxes on top of inflation, and interest rates on top of regulations, economic activity was just drying up.
Well, we turned that around with tax cuts, deregulation, and declining inflation. And the result is an economic expansion 59 months long—the longest peacetime expansion on record. And since it began, our gross national product has risen more than 20 percent. The story of these 59 months is one of consistent growth with low inflation; of dramatic rises in real household income; of surging productivity in manufacturing, well above the postwar average. But perhaps the single most impressive gain has been the employment.
We've been creating jobs at an average rate of almost a quarter of a million a month, for a total of nearly 14 million new jobs. This summer the employment-population ratio—that's the measure of the percentage of all Americans 16 years and older who are working—was at the highest level in U.S. history. And we're not just creating more jobs: We're creating better jobs. According to Labor Department data, nearly two-thirds of the new jobs have been in the higher paying occupations, with only 12 percent in lower paying, low-skill occupations; and over 90 percent of these new jobs are full-time. In short, we're talking about creating—or continuing job creation with jobs that are better paying, more challenging, safer, and more rewarding.
Well, we know where most of the new jobs came from, too—not the big corporations, not the Fortune 500. It is small businesses that have accounted for about 70 percent of all the new jobs—that's right, 70 percent. Small businessmen and entrepreneurs don't just create jobs: They're helping shape America's future. On a per-employee basis, small firms contributed over twice as many first-of-type innovations.
That's why one of the best economic indicators we have is the rapid growth of small business incorporations, which have been increasing at a rate of about 5 percent a year for 4 straight years now. That's not simply a measure of economic health—it's a measure of how much opportunity there is in the American economy. It's not just a measure of business activity: It's a measure of the American spirit of enterprise—restless, large, and growing. It won't be satisfied till it captures the future.
Recently, there have been some signs of economic concern. The fact is the stock market, even after these last weeks of adjustment, is still much more than double what it was in August of 1982. We're concerned, of course, and are now in the process of negotiating with Congress to do something about that persistent black cloud on the economic horizon: the Federal budget deficit.
Now, before I took this job, I was a labor negotiator for many years, negotiating on the side of labor. And if there's one thing about negotiating, it's that you don't tip your hand. I will promise you this much, however: There will not be an agreement that could threaten our economic recovery. Our goal is to work together on a course that will signal growth and opportunity for the future. And as I said at the Department of Labor last week, I've promised to veto any protectionist trade bill that comes across my desk, and that promise stands. [Applause]
Well, thank you very much. We've got some tough fights ahead of us on these issues and others, such as the threat of government-mandated costs on business and opposition to fundamental tort and product liability reform. But with your help and support, we'll keep America's economy on the high road of growth and opportunity. And working together, I know we will succeed. I thank you all very much, and God bless all of you.
Note: The President spoke at 1:03 p.m. in Room 450 of the Old Executive Office Building. In his opening remarks, he referred to James Abdnor, Administrator of the Small Business Administration.
Ronald Reagan, Remarks at a White House Briefing for Members of the Small Business Community Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/251180