Small business has been hammered over the last four decades by a combination of cheap imports, the unprecedented rise of big corporations, soaring health care costs, rapidly changing technology tools and compliance costs for regulations. For example, small manufacturing business spends on average $37k per employee to comply with federal regulations.
Yet, studies reveal that small businesses have traditionally been the driving force in job creation. However the deck has become stacked against them in continuing on with this tradition.
This perfect storm has resulted in fewer jobs. In the last ten years alone overall employment has fallen by over 10 million available jobs, while our population has increased by 26 million. Last month there were zero manufacturing jobs created. This has resulted in an explosion of individuals receiving federal and state assistance such as: rent assistance, medical insurance, child care, monetary benefits, unemployment, food stamps, heat assistance, transportation assistance, free education, cell phones, school lunch, needy families, refugee assistance, etc.
You get the point. In both scope and size the administration and cost of these programs are massive and full of fraud and abuse. This is unsustainable.
This current trajectory is socially unacceptable and extremely unhealthy for our society. It lowers our productivity and standard of living. Conversely, having a high percentage of citizens employed and self-sufficient will result in a higher standard of living, less need for government redistribution, and a more content population.
So my suggestion is simple and straight forward to jump start the economy.
Give every manufacturing business in America with less than 200 employees a $40,000 federal tax credit for each full time employee that has remained on the company’s payroll for a entire year and has participated in an company sponsored health care plan.
This simple act, will significantly increase employment, and lower the number of individuals on federal welfare. And more importantly it will pay for itself with increased economic activity.
In my opinion, if our lawmakers throw this type of life line to small business, not only will it be a life saver for them and the middle class, but more importantly our entire society will be repaid a hundred fold.
Because as John F. Kennedy once said, “A rising tide lifts all boats”.