Friday, May 13, 2016

Why Obama's American economy is stagnant

As a small business owner (very small) and sole proprietor, I myself would just love to grow my operation, hire some folks, and really start to put my business on the map.

But that is simply not in the cards for me.  I would love to have help in a lot of the simple, low tech tasks that I have to do myself.  I could easily show a reliable but entry level skilled person how to do a lot of things that would free me up to concentrate on the skilled tasks of my business that I have spent a lifetime honing.

Not going to happen.  The daunting requirements of the federal government are simply too overwhelming and potentially fatal to my business.  If I were to hire just a single guy (or gal), I would be putting my entire business at risk of going under, considering the following:

  • The current federally mandated minimum wage here in Illinois is $8.25/hour, and this amount simply doesn't justify me taking on anyone full time.  Paying the wage itself would be OK, but that is not the only requirement levied by the feds.
  • I would also have to pay FICA taxes on any payroll expenditures, in addition to Medicare and unemployment taxes
  • Unless I hired the absolute perfect person, who never got sick or hurt, pregnant or otherwise decided to pull some sort of skulduggery as an employee, they could drag me into court over the least little beef they have with their job and ultimately tank my business.
  • And God forbid I have to deal with providing somebody with health insurance, forget that, I have plenty of headaches just providing my own dang health insurance.
  • Keeping the records of this employee that are mandated by the federal government, to include hours, wages paid, W-2s, would take me away the things that I do best.  Just too much hassle, although I really need the help.
I just can't risk hiring anybody, even though hiring a single person would probably increase my productivity by maybe 50% or more.  But that increase in productivity would not be worth the risk of that employee going south on me, and actively trying to destroy me with any myriad of potential bombs provided to them by the federal government regarding employment regulations.

And the above is just anecdotal evidence that I see with my own business.  Multiply this by the entire American economy, and you can understand why we as a national economy are just crawling along at 2% growth, if that.  Hiring people is just too dang risky, it can destroy a business if they are not extremely careful as to who they take on.

Now with the specter of a minimum wage being jacked up to $15 an hour hanging over small business owner's heads, there is absolutely no way I can even dream of hiring anybody, even though I would truly love to expand my business.

I just can't risk it.  I just can't get in bed with the federal government.  They would destroy me without even trying.  




LSP said...

But Fredd, you've forgotten that "the government is your friend!" Some people seem to believe that but then again, the turkeys have a habit of voting for Christmas.

Kid said...

Fredd, I've talked with Many small business owners who have told me they would NEVER try starting another business in this so overly regulated environment. Even in the same genre. For anyone who understands what effect the federal jack boot on their neck is this is easy to see.

The only still successful small businesses out there have been there a good while and have evolved and educated themselves to insulate themselves from the toxic environment that would otherwise kill them. Doctors too. How much longer can they hang on. Plenty of articles in the news also predicting the very quick destruction of the middle class. Yep.

It's going down fast. Imagine the last 20 minutes of the titanic movie.

Gorges Smythe said...

I was self-employed most of my life, and I couldn't agree more.

Fredd said...

Pastor: with 'friends' like the government, my enemies would be complete and total ogres. Every time I have to deal with the feds, such as during tax season, I get the heebie jeebies.

Fredd said...

Ed: not sure how you figure that.

Fredd said...

Gorges: unless they have walked a mile in my shoes, most folks will never understand why we don't just hire a staff of a hundred, us small business owners are just greedy, you see.

Fredd said...

Kid: yes, I operate much like a sole proprietor doctor, and you really have to watch out who you do business with, each one of them a land mine who could destroy you.

LL said...

I've hired my kids under the table to do some tasks for me. That still works, but I feel your pain. the overhead and trouble involved with even a minimum wage employee is considerable. The profit margin has to be high enough to justify the trouble.

I'm a sole proprietor and do pick up work here and there. I just relocated a woman whose husband wanted her dead, changed her identity, etc. on behalf of a large East Coast firm. I work for a university in TX as a contractor, and I do other contract work that pops up here and there. I've had people who want to attach themselves to me but it just doesn't work for me, and 99% of the trouble is the Federal Government. It's not about the money, it's about the government driving me mad and the standard problems that come from managing employees.

So, I feel you.

Fredd said...

Ed: that's ridiculous, and it's NOT the law. When you file your taxes with the IRS, you claim your revenues, you claim your costs, and assuming your revenues are greater than your costs, then THAT is your profit. How many hours it took you to earn that profit, divide the numbers and there you go: your hourly wage. It's NOT the law that this number be at least $15/hour. Maybe in communist countries, sure. Why not.

There's no guarantee or law as a sole proprietor DBA tax payer that you make a dang dime, Ed. Ed, you must have a government job. Get a clue, man.

Fredd said...

LL: I'm confident that you get it. Anyone who has been self employed gets it. And I am flabbergasted, or in terms LSP can grasp, gobsmacked, when I hear of a business owner who votes for Democrats, who want to increase the role of government in private enterprise. I truly am.

Like Warren Buffet, Bill Gates and Mark Zuckerberg. These guys have whole divisions of their company staffed with battaliions of lawyers devoted to legal and tax concerns, and have budgets annually that cover millions of dollars in employee lawsuits, EEOC complaints, and the general hassle that employees cost a company in general that are fueled by federal government butting into the employer-employee relationship.

Brig said...

I worked for myself, but never hired additional help for the very reasons you stated.
I also worked in a gov job that drove me crazy with the vendors raping the system. When I called them on it, they always said, "it's not your money why do you care?"
my boss saying "we are mandated to take the bid of the minority business" even if the only thing they do is install toilets that flush up, on the roof.

Fredd said...

Brighid: government jobs are terribly run. I often wonder how these government workers can sleep at night, particularly working at the Veterans Administration facilities. Those guys and gals are simply monsters.

My time spent in the army showed me how people treated other people's money, especially when it comes to money spent by the government. People just assume there's plenty more where that came from, and continue to waste it like there's no tomorrow.