Self Employed Entrepreneurs Are Key to Prosperity

The chart tracks the number of self employed people and the unemployment rate from the Labor Department’s monthly and annual surveys.  It confirms what is obvious to anyone except the leftist academics, politicians and media personalities who are the “experts” President Obama cites in support of his economic schemes.  As the number of self employed entrepreneurs who create jobs diminishes, the unemployment rate goes up.  [Continued below the chart]

In 2007 self employed men and women accounted for about 5.4% of the total U.S. population.  Now, they’re about 4.5% of the total population of 311 million people.

These are the entrepreneurs, the owners of millions of small businesses that employ 1 – 500 workers each.

This tiny minority is responsible for creating and sustaining roughly half the jobs in America.

Government can’t make successes of failing businesses.  But Government can and mustrefrain from interventions in the economy that make it more challenging for small businesses to succeed.

The cumulative effect of decades of ever increasing regulation, a process that has accelerated over the past three years, especially with ObamaCare, is a barrier to starting and growing small businesses.

ObamaCare supporters, with no experience in business operations, insist that since most of the employer mandates of ObamaCare are not scheduled to take effect until 2014, it can’t be blamed for lack of job growth in 2011.  But it is.

Business with fewer than 50 employees are exempt from some of the more onerous provisions of ObamaCare, including the fine an employer will have to pay for not providing health insurance.  But to be exempt when those provisions start in 2014 the business must have fewer than 50 employees as of the beginning of 2013.  Thus, ObamaCare is a powerful and perverse disincentive to job creation right now.  It’s safe to say that some businesses are already making plans to downsize, to be under that 50 employee threshold by the end of 2012.

Politicians assess a regulation is “good” by estimating  the dollar cost of its implementation, as if that were the only cost.  But unlike huge corporations, small businesses can not absorb the cost of regulations and then make it up later with higher prices.  Small businesses can’t hire staff attorneys to interpret thousands of pages of bureaucratese.  Too often a new regulation forces a small business to set aside plans to expand or even to shut down.  The chart at the top demonstrates the cost of regulations to those who are not self-employed entrepreneurs.

4 Comments so far

  1. Sarah Livingston on November 2nd, 2011

    I’m a small business owner. One of the 4.5% carrying the load. One of my suppliers just closed down because they couldn’t afford a new EPA reg. Now I have to pay more for the same thing from other suppliers.

    Thanks Obama

  2. BizMan on November 2nd, 2011

    This administration is toxic to small businesses. They don’t care. They only care about installing socialism. They bail out unions and Solyndra and Wall Street and then some of the money comes back to them.

  3. AzTex on November 2nd, 2011

    Stop whining. Obama has given several tax breaks for small business. The Health care law includes subsidies to help small businesses pay for health insurance for their employees.

    SBA gives special loans to small business that big business can’t get.

    Politicians from both parties grovel for small business friends.

    Obama’s new jobs bill that the Republicans are blocking in the House has even more tax breaks for small business.

    America is sick of whining, poor-me small businesses always with their hands out asking for something else.

  4. Travel Guide on November 6th, 2011

    I can not thank you adequately for the posts on your web site. I know you’d put a lot of time and effort into them and hope you know how much I appreciate it. I hope I’ll do exactly the same for someone else at some point.
    My blog is about Travel Guide.