Spare a thought for the squeezed middle. Joe Adams, the Managing Partner of McGladrey LLP, our member firm in the US, has just authored a fascinating article for Forbes.com, championing the middle market. Adams puts forward a strong argument that the apparent fixation of policymakers on small businesses and large multinationals is leading them to overlook the middle market, a habit that could prove detrimental to the economy.
In the US, the middle market employs one third of the workforce and generates one third of GDP; and it is still growing. Between 2007 and 2010, mid-market businesses created two million jobs – a period during which employment at large businesses dropped by four million. Those are extraordinary yet little known numbers. In the UK politicians have started talking about the ‘squeezed middle’ in reference to middle class voters, but the interests of mid-market companies do not attract the same level of attention. The contribution of mid-sized businesses to the economy is poorly understood, but this often means that they have to bear the cost when politicians cut taxes for small or large businesses. Being mid-sized may seem less interesting – though we at RSM certainly don’t share this view – but the notion that small or very large businesses ought to take precedence in the formulation of policy is an assumption that needs to be challenged.