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The key to the economic recovery is the creation of more jobs. Small business is viewed as the job creation engine and all small businesses were start ups at one point. Governments say they are spending lots of money to help small businesses create jobs. I'm interested in understanding how this is helping start ups.

What kind of job creation help are you getting from various government agencies and programs? Which agencies and programs are effective? Which agencies and programs are not helpful?

If you could ask your legislators to implement just one thing to help you create jobs, what would it be?

Thanks!

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6 Answers

up vote 5 down vote

Get businesses out of the health care and taxation collection business (It is not our job!)

Businesses of every size are tremendously burdened by the costs and distractions of collecting and accounting for employee health care, employee state and federal taxes, government employment and retirement (medicare, medical, SDI, SSI...) programs, and sales taxes. Startups and small businesses in particular suffer under these burdens since their resources are limited and every distraction can mean the difference between success and failure.

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How would you tackle these problems then? And how would sales tax be collected, also? Ok, so businesses get out of doing the tax withholding... Who is responsible for it, then? Wouldn't all of this be fixed by hiring a bookkeeper or a decent payroll service? They do all the of the withholding for you... – Gabriel Magana Mar 8 '10 at 17:42
Compliance with the entitlement of health care and state and federal tax reporting agencies sucks up an enormous amount of time and energy. I have two solutions: 1. Health care would be solved if we decouple it from employment. I'd happily add reasonable health care costs to employee wages and let the employee manage his own health care purchases. 2. If done correctly, a flat tax on consumption (rather than earnings) would effectively end and radically simplify the endless employee/wage related taxes levied on and collected by businesses for the government. – Keith DeLong Mar 8 '10 at 22:22
+1 I am always amazed at the confluence of events that gave us this horrible system of employer==health insurer. Absolutely one of the worth ways to go about the whole thing. – TimJ♦ Mar 9 '10 at 4:46
up vote 4 down vote

The only agency that seems to be making an impact on small businesses is the Small Business Administrations (SBA) Loan Program. The recent report card shows a steady increase in the amount of money loaned during the Recovery Act, which is good.

However, if you look at the amount of money allocated to small businesses, it's about $25-30B compared to $2,500B in TARP money that has already been spent (12,500 B has been allocated). On top of that, the SBA money is loans while most of the TARP money has been a challenge to account for.

The one thing that will help create jobs is to unfreeze the credit markets or loan direct to small businesses. Even though the SBA had loan guarantees, bank lending completely dried up during the crisis and is still a challenge today. Access to capital is the single biggest factor in launching small businesses and creating more jobs.

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up vote 3 down vote

At the risk of starting a political debate, I think universal healthcare would be huge for small businesses and startups. Many people simply can't afford to leave a large company to start a business due to health issues. My previous startup could have hired another employee with the amount of money we spent on healthcare and we had to be extremely careful in the early days to avoid issues with pre-existing conditions.

There are many ways to solve the problem using some combination of the free market and government, but the bottom line is that decoupling healthcare from employment while keeping it available to people on a low income would be a boon to small businesses and startups.

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Government run health care will be paid for by who? The premise of the whole thing is the individual cannot pay for it. Therefore it HAS to be another inefficiently government run, business paid for entitlement. This makes the problem immeasurably worse, not better. – Keith DeLong Mar 9 '10 at 16:29
Heavens No!!!! What else can a polite girl say in public? – jane Mar 9 '10 at 16:33
I'll leave arguing about the best way to provide healthcare to people that can't afford it for another forum, but I still maintain that if people could work for smaller companies without losing access to healthcare and if startups didn't have to deal with it for their employees, it would create jobs and be a net positive for society. – Brian Deterling Mar 9 '10 at 23:45
up vote 3 down vote

"What one government action would help the most to create more jobs"?

That's easy - get rid of all the government interference with health insurance and other instances where they meddle.

They are there to enforce laws and contracts, anything else is overstepping their role.

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up vote 2 down vote

I own a small business that employs 36 people here in California. Every year my business is saddled with more taxes, fees, obligations, reporting, and duties that are related to my role as an employer.

  • Unemployment taxes keep going up while at the same time the government (state AND federal) make it easier for fraudulent unemployment claims to be filed.
  • I have to pay my employees every week now instead of every two weeks just because the state legislature decided that I should do so.
  • Fraudulent workers comp claims cost me thousands of dollars each year through higher premiums and yet we can't prevent them because the law encourages them (read up on "moral hazards" on the web sometime!)
  • Obama and his collaborators in the senate and house want to make me pay for healthcare for my workers, when currently most of them refuse our offer of healthcare coverage because they're young and they don't want to spend money on something they think they won't use (we pay for part of the premium but they have to share in the cost)
  • Obama and his collaborators owe a huge debt to organized labor that will some day no doubt be paid with laws that make it much more difficult to keep the unions off our back

All these items, and more, make it MUCH less attractive for us to hire new employees, and yet as we grow we have no choice. The government knows this. They know that eventually businesses will have to hire people, and so they give lip service to helping small businesses. However, what they propose is that businesses be able to BORROW more DEBT. That debt is more likely to kill businesses than help them. Debt will cripple most small businesses. Businesses need to achieve positive cash flow, not higher debt service obligations.

The best way to help small businesses hire more people is to LESSEN the intrusion of government in our businesses, not load us up with more debt and more taxes.

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up vote 0 down vote

The answer is, and has always been, limited government. There is some pretty good reading on FaceBook about limited government.

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