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Instead of Inequality for All, Entrepreneurship for All

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A new documentary, Inequality for All starring former Labor Secretary Robert Reich, is making it's way across theaters -- in Pittsburgh, in Oakland and in Albequerque.

Now the conversation about wealth inequality has moved to the big screen; I hope that the national conversation moves forward from the same, old game about inequality to new innovative solutions to the problem. And as November is National Entrepreneurship Month, I'd like to suggest that we take a look at business ownership and entrepreneurship as one solution to the inequality issue.

First, the problem: The Congressional Budget Office found that the cause of the rise in income inequality between 1979 and 2007 derives mostly from disparities in business income. That is, the richest among us own businesses.

So if we get to the heart of the problem of inequality, the answer can be simple. Instead of handouts and promises of trickle down job creation, help people create their own businesses and have them close the income inequality gap themselves.

It's these do-it-yourselfers who are creating their own jobs and starting their own businesses that will create a strong, diversified and sustainable infrastructure for the new economy and close the income inequality gap. It's the 26 million micro-business owners that make up 88 percent of the country's businesses and account for most of the job creation over the economic recovery.

It's business owners like Jessica McGinty who created her own job as the owner of Jessicurl, a maker of hair products for curly hair, and now creates jobs for others. From 2004 to 2010, U.S. micro-businesses (one to four employees) created a net of 5.5 million jobs, more than any other firm size; large businesses (those with greater than 500 employees) shed 1.8 million jobs during the same period.

Everyone knows these individual stories, yet we keep waiting for some big employer rescue us. But that is not happening. We pour our job creation hopes and resources into the possibility of the next big thing, when in reality only one percent of firms with 10 or more employees have high growth potential.

It's people like Jessica who can stem the tide of frustration.

But Jessica didn't do it alone. She sought out assistance from her local Small Business Development Center (SBDC). SBDC's are part of an infrastructure of business development services that include non-profit entrepreneurial training programs and microlenders. In my 25 years of experience, I've learned that these small businesses need three things -- business training and management skills, small amounts of capital and access to markets: coaching, capital and connections.

And this strategy -- business training, technical assistance and financing to the entire spectrum of entrepreneurs -- is proven effective. CAMEO members serve about 21,000 very small businesses with training, business and credit assistance and loans annually. These firms -- largely start-ups with less than five employees -- support or create about 35,000 new jobs in California and generate $1.5 billion in economic activity.

If we are serious about closing the income inequality gap, we need to support and strengthen the many small, locally-owned businesses that will be the foundation of the 21st century economy. And to do that we need to invest, publicly and privately, in the infrastructure that supports those businesses. Entrepreneurship, for all.