As the government shutdown enters its fourth week, the impacts are taking their toll on workers nationwide. The shutdown exacerbates the precarious economic situation for millions of Americans impacted by Trump’s capricious tariff regime. The stock market isn’t yet feeling the pinch, but that is partly because it is buoyed by an AI investment frenzy that looks increasingly like a bubble getting ready to pop.
Most attention has understandably focused on furloughed government workers, the recently unemployed, and the cruel, partisan cuts Donald Trump’s administration is making in blue states and cities. But another class of workers also suffers greatly from these shocks while receiving little attention: the self-employed. For example, self-employed individuals, small business owners, and their employees make up roughly half of all adults covered by Obamacare, premiums for which are set to skyrocket in January thanks to GOP-imposed cuts that are at the center of the shutdown. As they fight to overturn those cuts, Democrats would be wise to present themselves as champions of these entrepreneurial Americans. But will they?
According to the last U.S. Census, there are over 16 million self-employed Americans, not including an uncounted number of gig workers and sole proprietors on the economy’s periphery. And as Will Norris wrote earlier this year in a superb piece here at the Washington Monthly, American policy choices seriously disadvantage this large and vital sector of the economy. Gig workers, independent contractors, and other self-employed individuals are subject to punishing monopoly predation and tend to lack employer-provided health care, paid vacations, and other benefits that people who work for larger organizations take for granted.
They also receive little real support from either political party. Rhetorically, the Democrats pay them little public attention (the 2024 Democratic Party platform mentions “workers” 78 times and “union” 23 times, but “self-employed” workers and “independent contractors” just once each). Meanwhile, the GOP offers them only mendacious lip service. Republicans tend to make massive giveaways to wealthy capital under the guise of helping “small businesses” and “entrepreneurs” who are neither small nor truly innovative.
Democratic campaigns do sometimes outline policy proposals to spur entrepreneurship. The Harris campaign, for instance, listed a series of proposals aimed at helping small businesses thrive through tax deductions, streamlined regulations, increased access to capital, and so on. But these tend to be small-ball measures with little fanfare that, while potentially effective on the margins, also sound cribbed from a traditional conservative playbook. On the flip side, social Democrats and especially Democratic socialists tend not to emphasize small business and entrepreneurship for obvious reasons. After all, these have long been the darlings of the right, a rhetorical wedge used to increase the power of capital at the expense of labor by putting a mom-and-pop face on big business.
Democrats could change the script here by offering expansive economic policy on everything from healthcare to housing that Republicans typically decry as socialist, while legitimately pointing out that they are working to benefit actual small businesses, solopreneurs, and the self-employed. It is a dirty secret of economic policy that Republicans explicitly champion an agenda that keeps workers not only less able to organize into a union but also chained to their employers and afraid to strike out on their own, lest they lose access to healthcare, retirement, and other benefits. Since two-thirds of start-up businesses typically fail within ten years, a weak social safety net also jeopardizes the ability of the self-employed to house and feed their family unless they’re privileged enough to have a family trust fund.
The most obvious place this dynamic appears is in health insurance. One of the most critical functions of the Affordable Care Act was to provide more reasonable healthcare options to the self-employed and microbusinesses. The Republican decision to allow tax credits to expire as part of their big budget bill is the central cause of the shutdown, as Democrats (and even Marjorie Taylor Green!) rightly see it as reckless and inhumane. But Democratic rhetoric on the issue usually—and for good reason—focuses primarily on the most marginalized communities facing disaster, including rural areas typically supportive of Trump. But there is also a wide-open lane here to appeal to around 20 million precarious self-employed Americans paralyzed about what their health insurance options will look like next year, and to do so in a way that could sound equal parts Bernie Sanders and Ronald Reagan. Americans don’t love big business, but they do love hardscrabble microbusiness owners trying to turn a dream into a decent living.
Trump’s crippling tariffs are perhaps the second most crucial place where Democrats could gain an advantage from a greater emphasis on the self-employed. Consumers feel the pinch from higher prices, and big businesses are hobbled by uncertainty. But microbusinesses and boutiques that rely on low-margin imports are being devastated. Everyone from Etsy sellers to specialized grocers feels the crushing burden of low profit margins flipped upside down by tariffs. And while big businesses can typically wait out uncertainty, many small suppliers and contractors downstream of them are going under as those larger entities put everything on hold, from research and development to distribution.
The emerging partnership between Trump and corporate oligarchs presents another opportunity for Democrats to stand with small-scale entrepreneurs. The millions of independent merchants who peddle their wares on Amazon have watched in fury as the monopoly platform has raised its share of sales revenue per item from a third in 2016 to 50 percent in 2022, plus additional fees since. Uber drivers have seen that the company increase its take by similar amounts. As Americans have moved from cash to credit cards since the pandemic, small merchants are being eaten alive by high “swipe fees” imposed by the Visa/Mastercard duopoly. By calling for antitrust and other measures to curb this monopoly rent-seeking, Democrats could earn significant goodwill from this suffering class of small entrepreneurs.
In states and districts where even populist traditional left-liberal rhetoric falls flat, much of the larger agenda of social democracy can be reframed as an engine of real small business and employees without an HR department. More generous social security and pensions are available for those who don’t have the luxury of a large corporate 401(k). Skills training and lower-cost college would allow people who want to pursue their dreams to leave foul and abusive jobs. Subsidized childcare and pre-k make it possible for regular people to be good parents while opening that time-intensive restaurant. And so on.
Finally, as AI slashes entire professions across the economy and sits on a potentially precarious bubble, even more Americans are likely to try to find independent ways to make ends meet. Conservatives have no answers for them, and Democrats have all too often spoken to the ranks for the current and future self-employed either in the paternalistic language of equity or the arcane white-paper-speak of tax rebates and loan programs.
There is a better way, a clear policy need, and millions of underserved voters up for grabs.
