Well, we’ve seen the President’s new jobs plan—The American Jobs Act—and it looks pretty much like the programs of the 1930’s (which didn’t work very well then until the second world war started). Although I think it is a good idea to fix some of our roads and highways before they are beyond repair, the jobs incentives fell woefully short of accomplishing much of anything.
All the small business owners I know hire employees to grow their business in support of an increase in sales. Likewise, when sales fall off, we all reduce our workforce because there is not enough for all the workers to do. Most small businesses do not have huge cash reserves to carry non-producing workers.
To take it one step further—in a growing economy most small business owners will hire more employees in ANTICIPATION of increased business. However, no anticipation—no hiring.
The federal government can pass out all the incentives they want—in the form of hiring bonuses, payroll tax reductions, and on and on—but the fact remains; if a small business owner does not need a new employee to fill a current (or anticipated) job opening, they will NOT hire a new employee. Small business owners are too savvy to fall for the government’s financial smoke and mirrors incentives.
Why aren’t the people in the White House and Congress smart enough to know this?
Maybe this is one reason why:
- Only 8.4 percent of all lawmakers majored in a field related to economics.
- Only 13.7 percent of lawmakers studied business or accounting.
- Only 11.5 percent studied a field related to science or technology.
- Over 55 percent focused on government or law studies (perpetuation of professional politicians?).
(Data from The Employment Policies Institute [EPI]).
I have yet to find any information on how many people in the White House, or in Congress, have actual experience as an entrepreneur in a small business—but it appears the number would likely be quite small.
And we wonder why Washington cares so little about small business!
Where does this situation leave American Businesses? I think a recent article in The Huffington Post spelled it out pretty well—at least in the manufacturing sector—with the title: “American Manufacturing Slowly Rotting Away: How Industries Die.” What more can I say?
What about your business? Your industry?
I am also wondering if this situation is endemic to the U.S., or do other developed nations, such as the European Union also suffer from government suppression of small (or not-so-small) businesses?
Leave a comment and let me know how your business/industry has been (and is being) affected over the last few years.