Headlines from the American business media typically feature stories about companies at two ends of the growth spectrum: hot startups or well-established multinational giants. What often gets left out, however, are the businesses in between. But that is about to change.
These overlooked heroes of the U.S. economy—known as the middle market—produce one third of private-sector gross domestic product and employ more than 45 million people.
The middle market includes its own share of nationally known companies, including Caribou Coffee and Tootsie Roll. It also includes essential businesses that fly under the radar but are present in every industry such as Southern Star Concrete in Irving, Texas and Hauppauge Digital in Hauppauge, New York.
The new caucus will help give these and the rest of the nation’s approximately 200,000 middle-market businesses a voice in the national conversation and ensure that policymakers consider the economic implications of their decisions on all companies, not just small and massive ones.
Middle-market companies matter more than most Americans realize. Mid-sized businesses are the biggest contributors to growth in jobs and revenue. About 70 percent of all new jobs in 2013 were created by the middle market, according to the latest research from the National Center for the Middle Market. Middle-market companies saw their employment increase 3.7 percent over the last 12 months, compared to 2.6 for large businesses and 2.1 percent for small firms. And they saw their revenue increase 6.5 percent during the same timeframe compared with 5.16 percent for businesses in the S&P 500.
Despite their remarkable growth, mid-sized firms report acute challenges related to healthcare, taxes, exports, and the education of America’s workforce. According to the Center’s recent survey of 1,000 mid-sized executives, these challenges act as artificial barriers to even greater growth.
When it comes to competing internationally, the middle market as a whole underachieves. These companies can export more but need lawmakers and the executive branch to create a “roadmap” for how to compete in foreign markets. These companies also advocate for a simpler tax code and new steps to help ensure America’s workforce is better educated and better trained.
It’s clear that middle-market companies, with their outsized role in the U.S. economy, must be heard. The Congressional Caucus for Middle Market Growth will make that happen in the halls of Congress and the result will be increased employment growth in communities around the nation. We commend the efforts of Reps. Stivers, Polis, Rice and Schneider in this long-overdue growth initiative and we hope more lawmakers will join them in supporting this mighty middle-market caucus.
Stewart is the executive director of the National Center for the Middle Market, a collaboration between GE Capital and The Ohio State University Fisher College of Business. Hendrickson is the global chairman of the Association for Corporate Growth and the chief operating officer of The Riverside Company.