All over the states, newspapers are publishing horror stories about what will happen to small businesses if those of us fighting to shut down the Ex-Im Bank are successful. With a few exceptions, all these stories are just uncritically repeating the misleading talking points from the Chamber of Commerce about how critical the Ex-Im Bank is to small businesses. To be sure, some small businesses benefit from the bank and the ones who do like it.
But the reality about what would happen to America’s small businesses without Ex-Im is quite different than the picture painted in these stories. For one thing, the bank’s definition of small businesses is quite different from the way other federal agencies describe them. If you’re a company with 1,500 employees or less than $21 million in annual revenue, you’re a small business in the eyes of Ex-Im. I think it’s fair to say most people wouldn’t consider a firm of that size a “small business.” Over at the Daily Signal, Diane Katz describes some of the companies that Ex-Im considers “small” — some have revenues of more than $70 million.
More importantly, even if we accept Ex-Im’s definition of “small business,” it’s completely misleading for anyone to imply that many U.S. small firms are being helped by the agency. In fact, the data show that the Ex-Im Bank benefits a minuscule share of small businesses.
Data from the Census Bureau and from Ex-Im show that only 0.3 percent of all small business jobs were backed by the bank in 2007 (that’s the most recent year for which the full Census dataset is available). That, of course, is assuming that these jobs would not exist without the bank, which is obviously not true the most part.
Then, if we make the unrealistic assumption that each Ex-Im small-business transaction went to a unique small business (many get more than one deal), only 0.04 percent of all small businesses were supported by Ex-Im in 2007.
Let me break this down for you: That’s 2,390 firms, out of 6,723,226 small firms in America. Almost 7 million small firms are operating just fine without the Ex-Im Bank’s help. Over 99.7 percent of American small-business jobs exist without any Ex-Im assistance at all.
As always, Ex-Im isn’t so much about promoting America’s small businesses and jobs as it is about promoting the jobs and small businesses of a few winners.
Here’s a chart showing that tiny sliver of beneficiaries:
The analysis for this chart and the data are here.