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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Soul Crusher on February 09, 2011, 05:15:32 AM
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Why Small Business Isn't Hiring And Won't Be Hiring
oftwominds ^ | 02/08/2011 | Charles Hugh Smith
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Pundits and politicos promote a magical myth: a coming small business hiring boom. That fantasy is completely disconnected from the harsh realities of private enterprise.
Regardless of their ideological persuasion, pundits and politicos reliably repeat the mantra that "small business is the engine of jobs growth." The mantra is followed by the pundit-politico's belief that a "small business jobs boom is right around the corner."
I have news for the pundits and politicos: ain't gonna happen. Why? The answer cannot be found in the manipulated and massaged Bureau of Labor Statistics numbers (have any real jobs been created, net of jobs lost, in the past year? Who knows?) or in the punditry's Cargo-Cult-like belief in a mythical "small business jobs machine" that they have never experienced and know nothing about.
While a handful of the new crop of politicos are entrepreneurs, most Washington denizens are attorneys, the offspring of wealthy or politically connected families or people who have lived off the government at some level their entire lives. Most have never had a customer or client or had to borrow off a credit card to make payroll. (I have; any pundits who can honestly raise their hands for that one?)
Pundits come in two flavors: the academics, happily making mud pies in the moat surrounding their secure Ivory Tower, and the loud-mouths who have screeched louder and longer than the other media-monkeys. All know less than zero about actual small business.
To understand why small business isn't hiring and won't be hiring, you need to understand the psychology of this era and the systemic pressures on all small businesses which don't live off Federal government contracts. In a very powerful sense, those businesses which live from one government contract to the next are not private businesses at all: they are merely proxies or extensions of the government. Their non-governmental work is either trivial or non-existent.
So when some government set-aside program sanctions $40 million or whatever for "small business," it's no different than opening another government office: the only difference is the employees are not Civil Service. The competition is not between private-sector and government, it's only between rival government contractors.
What pundits and politicos don't get is small business knows the "recovery" is totally bogus. Why hire somebody who you'll have to lay off a few months from now? Laying people off is emotionally painful--you dread it, tire of it, are wearied by it. This is a real human being who is losing their job, not some ginned-up statistic hyped by some think-tank-pundit pulling down $15K a month for dishing whatever flavor of propaganda he/she is paid to churn out.
The Washington establishment--the Fed, the Treasury, Congress, the Obama Administration-- seem to believe they've successfully pulled the propaganda wool over Americans' eyes, and that the yokels actually believe "things are getting better and better every day and in every way."
Only the yokels without clients, customers and payrolls can believe the propaganda.
Meanwhile, back in the real world, small business income is down 5%. Small Business: Still Waiting for Recovery.
According to data from the Bureau of Economic Analysis. Proprietors' income-- the profits of unincorporated businesses such as partnerships or individuals who work for themselves--is down nearly 5 percent from two years ago, while corporate profits have jumped 21 percent in that period.
About 19.9 million partnerships and sole proprietorships with no employees existed in 2008, the latest year for which U.S. Census Bureau data are available. That number fell almost 2 percent from the previous year.
In a private-sector workforce of about 106 million, that's about 19% of all people with a job. Recall that the BLS counts you as employed if you work one hour a week or if you're "self-employed," even if you aren't making a dime.
Only in the Fantasyland of propaganda does nobody notice that self-employed people who are seeing revenues and profits fall do not need to hire someone: they're sinking all on their own.
Only in the Fantasyland of propaganda does nobody seem to notice that for every celebrity-chef restaurant opening to gushing hype in Manahattan, West L.A. or San Francisco, two other restaurants quietly closed.
Small business understands uncertainty is now permanent. That's why 26% of all new private-sector hires are temporary--and if we subtract the bogus phantom jobs created by the BLS "birth-death model," then the number is probably more like a third or even half.
Small business understands that the "recovery" is merely a Federal towel stuffed in the gaping hole in the rowboat's leaky planks, and that it's literally insane to hire workers when your revenues could evaporate next month.
Small business re-discovered it could do more with less. Once businesses trimmed payrolls to survive, they discovered they could make more money for themselves and do so with fewer people. Why add to staff when all that means is transferring your own paycheck to someone else?
Small businesses are closing, not opening. Rents have barely dipped, local government taxes and junk fees have skyrocketed, and the complexities and costs of the new healthcare bill have all added systemic pressures on every small business: it's either adapt quickly and successfully or perish, and many are choosing to close down and quit working so hard for so little payoff.
When leases expire, the doors close, and no one leaps in to pay boomtime-level rents, and heavy business licence and permit fees. The only people insane enough to hire anyone are three guys working in a living room somewhere, trying to hire a few Javascript programmers to finish their app so they can cash out by selling the "company" to some larger enterprise.
The programmers are independent contractors who have to take care of their own healthcare and taxes, or they're young and single so the healthcare insurance costs are modest--if they even bother with buying insurance.
Nobody's hiring for the long-term for the simple reason that there is no long-term: we're either selling the company as soon as we can, or we're waiting for the next dip in revenues to close down before we lose everything.
Local government has grown accustomed to small business being uncomplaining tax-donkeys, silently paying every junk fee and every additional tax the government levies. Only a funny thing happened on the way to local government's plan to fill the shortfalls in its own revenues by taxing small businesses even more: they're closing down.
The reason is simple: why work for free? This is incomprehensible to both local governments, who expect all those "filthy-rich small-business Capitalists" to pay higher taxes and fees, and the safely remote-from-the-real-world pundits and politicos.
These members of the academia-think-tank-media-politico Cargo Cult have a magical belief in a mythical "small business" which is anxious to get out there and create new jobs because "to get rich is glorious," as if "getting rich" is even an option for 90% of real small businesses.
In the real world, small businesses aren't getting rich, they're going broke and closing down to save whatever remains of their sanity and assets. You want high-tech and "clean energy" jobs? Well, how about MySpace laying off half its 1,000-person staff? How about Evergreen Solar closing its Devens, MA plant, laying off 800 workers and moving production to China? Did the pundits honestly think that globalization was over?
Memo to pundits and politicos: you worship at the altar of Capitalist profits driving small business--get real. People will do whatever they have to in order not to go broke.
That's why the three guys or gals aren't renting an office--who needs the overhead? They also don't have health insurance: who can afford $1,000 a month for crappy, confusing "care" young people rarely even need? Better to pay cash.
And they aren't hiring "employees": they're paying their friends with equity shares, or cash, and paying their own taxes is up to each free-lancer.
That is the new model of American entrepreneurship: no office, no overhead, no employees, no health insurance, no business travel. That's the only way any new enterprise can survive.
Everyone who buys into the myth and pays absurdly high rents, junk fees and healthcare insurance will be ground down and bled dry. The only exception are those well-connected enough to run a pipe into the limitless lake of Federal money. Yes, 40% of the lake is borrowed from our kids, but no matter--the "recovery" is real, and this stone with a crudely painted radio dial is in fact a working radio. It's magic. You just have to believe.
Small business can't afford to believe in myths and fantasies. They are dealing with the harsh reality of adapt or die.
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SPOT ON.
HOPE & CHANGE BITCES!
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Small businesses are closing, not opening. Rents have barely dipped, local government taxes and junk fees have skyrocketed, and the complexities and costs of the new healthcare bill have all added systemic pressures on every small business: it's either adapt quickly and successfully or perish, and many are choosing to close down and quit working so hard for so little payoff.
When leases expire, the doors close, and no one leaps in to pay boomtime-level rents, and heavy business licence and permit fees. The only people insane enough to hire anyone are three guys working in a living room somewhere, trying to hire a few Javascript programmers to finish their app so they can cash out by selling the "company" to some larger enterprise.
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Toobad the economic illiterates like obama, pelosi, reid, barney frank, dodd, kerry, waxman, boxer, feinstein, and all the other pieces of shit who stand for more govt. don't grasp this basic concept.
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In Germany they have a booming economy.
Much of the success has come from making it easier for companies to fire people and hire them part-time
It wasnt popular to get through but it seemed to work in the long run.
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Huh ???
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Great damn video. Watch it. It talks about what is going on in the economy why we re FFFUUUCCCKKKED.
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Great damn video. Watch it. It talks about what is going on in the economy why we re FFFUUUCCCKKKED.
Im gonna watch it
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10 Reasons employment in the USA is getting worse.
http://www.businessinsider.com/reasons-its-hard-to-find-a-job-in-america-2011-2?slop=1
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Obama did it
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Yeah maybe, but I donno, some of this crap is just crap I think.
Right now, there are 21 hotels in e Disney world/ epcot center. And they are all nearly booked. Go to Vegas, i was there last summer and it was a zoo of people gambling and spending every where. My daughter had no problem finding 2 great jobs with benefits, both small businesses (less than 100 employees) with in the last year.
I think extending UE benefits is part of the problem here.
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What pundits and politicos don't get is small business knows the "recovery" is totally bogus. Why hire somebody who you'll have to lay off a few months from now? Laying people off is emotionally painful--you dread it, tire of it, are wearied by it. This is a real human being who is losing their job, not some ginned-up statistic hyped by some think-tank-pundit pulling down $15K a month for dishing whatever flavor of propaganda he/she is paid to churn out.
The Washington establishment--the Fed, the Treasury, Congress, the Obama Administration-- seem to believe they've successfully pulled the propaganda wool over Americans' eyes, and that the yokels actually believe "things are getting better and better every day and in every way."
Only the yokels without clients, customers and payrolls can believe the propaganda.
Meanwhile, back in the real world, small business income is down 5%. Small Business: Still Waiting for Recovery.
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I deal with dozens of small businesses daily. things are getting worse not better overall. Recod foreclosures, record food stamps, record debt, states near bankruptcy, massive vacancies, etc.
Additionally, we have the least amount of participation in the workforce since 1940!
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Obama did it
He's made and currently making a bad situation far worse with his WTF policies. If someone spent 100% of their time trying to wreck the economy worse, they could not have done as ruthless and proficient a job at it than Obama has. Whether its ObamaCare, regulating carbon, Card Check, regulatory uncertainty, he has only added to the bad situation.
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Maybe so 3333,
I just know what I am seeing and it doesn't always match the gloom of what I read.
And you have got to be sick that only 51% of peeps polled believe Obama won't be elected. That poll makes it look like he will.
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Obama's base is made up mostly, no all, of those who would votefor him even if the entire nation were literally on fire.
The blacks supports him 95%, hispanics 65%, guilt ridden libera whites - 30%, govt employees - 75%, deadbeats - 100%, non-taxpayers - probably 90%, and that adds up to close to 50% of the nation right now.
Its a sad state of affairs - the slackers, leeches, parasites, moochers, takers, and non-productive elements of society are now close to a majority and they will always vote the guy promising more free shit from everyone else, regardless of the impact on the people actually pulling the load.
Sad but true.
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A nation infested with leeches, parasites, and barely-humans like this can't survive.
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Obama did it
...."intentionally"
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Eat shit lurkinmenstoilets, CBO Director just confirmed ObamaCare will cost 800000 jobs.
Yes its intentional.
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*yawn*
Why... crazy talk like that is just "hysterical".
I am disappointed you didn't post one of your little photoshop pictures or make up some silly little acronym in your reply. PPPOOOFFFSSS poster.
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Yeah ok lurkertwat. 800000 jobs lost due to the asshole you support. Nice.
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How many of those 800000 are doctors that walked off their jobs like you claimed that would happen?
How many of those 800000 are zombies rioting in the streets like you said would happen?
I take it that in your rush to back those little black duffel bags that you were convinced you would need one day, you failed to pack any common sense, credibility, or your prozac.
Good job.
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Record level on ue
Record level foodstamps
Lowest level labor force in decades
Health premiums skyrocketing.
Inflation taking hold.
Yeah hope and change you twat.
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All Obamas fault. And intentionally too right?
Just like you are intentionally trying to ruin the Getbig Politics board? Is that how it works. I mean, all these half truths, exaggerations, out right lies and other bullshit. The constant 24/7 whining and crying? The no life outside the internet because you have to post on Getbig every single hour... all day long... with more of the same old same old.
Just a straight up honest question here :
When does being a crybaby become just too much by YOUR standards?
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What statement did I make that was not true you trolling twat?
What's wrong? Your little hope and change express off the tracks got you down?
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What statement did I make that was not true you trolling twat?
What's wrong? Your little hope and change express off the tracks got you down?
You said Obama Called Swat on Grandmothers
then you said his security detail did..based on nothing
You said Obama Spent 2bil in India or some shit
You said You got a letter saying due to obama care your insurance rates were being raised
You said that i dont tolerate any and all criticism of Obama.. after i have posted my qualms with the Administration many many times.
But this is the killer.. and what shows the true colors of 3333piece of shit..cbo says its Defecit Neutral, its complete bullshit.. CBO says its gonna cost.. its spot on...
Obama takes too many Vacations and is lazy...um i mean Obama is hell bent on destroying the country and will stop at nothing.. dude offf yourself
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33333. Has been called on this stuff before regarding misleading posts. This is nothing new. He hates anything that's not fully right wing to the point of posting petty digs and half truths.
That aside, much of what he does post is true and is concerning.
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CBO did not include the DOC Fix in their analysis. Not that it matters to Team KP.
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What statement did I make that was not true you trolling twat?
What's wrong? Your little hope and change express off the tracks got you down?
Mal beat me to it.
But don't forget all the doctors you knew that were going to quit their jobs. ::)
The getting spit on incident. ::)
Obama stating he liked high gas prices. ::)
Obama intentionally.... on purpose.... blah blah blah.... ::)
People planning to riot in the streets. ::)
and so forth.... Again, it is evident that all your whining is more about your own self loathing than it is about anything Obama has done. I am surprised with all the time you spend on the internet (read : all fucking day long) you still get busted time and time again on simple shit that could have been avoided by either 1) fact checking or 2) waiting for the real story to come out instead of jumping on the Whine Wagon.
Anyone melting down 24 hours a day really has some mental issues.
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You got utterly wrecked on the gas prices thing. Do you really want us to bump that thread and expose your stupidity and ignorance again?
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You got utterly wrecked on the gas prices thing. Do you really want us to bump that thread and expose your stupidity and ignorance again?
Hmmmm. I wonder which is worse........
You essentially posting lies, or him being ignorant ?
You're both fucked lol
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You got utterly wrecked on the gas prices thing. Do you really want us to bump that thread and expose your stupidity and ignorance again?
and what did i utterly wreck you on?
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CBO did not include the DOC Fix in their analysis. Not that it matters to Team KP.
We have to get something straight here: Is it "Team KP" or TK (with Kneepadder being a compound word)?
;D
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Don't know - maybe a few off statements here and there out of 45k?
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Don't know - maybe a few off statements here and there out of 45k?
45k. Omg. You should win an award or something.
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Don't know - maybe a few off statements here and there out of 45k?
Maybe a few off statements.. boy boy you couldnt cut on the team i coach.. when my players i tell them.. there is no "probably i could have done it better" or "maybe i could have done it this way"...As a man.. OWN IT.. "Yeah i fucked up... ill get better.." thats it.. own it. but i guess its a different breed of people.. its cool
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as a man.. your words are your words.. they should always be consistant.. 10 or 10million posts.. they should all line up if they are coming from the same man.. now a woman/bitch on the other hand.. they change their minds like the wind blows..
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For small businesses, a hesitancy to hire (fearing taxes, discimination lawsuits)
Boston Globe ^ | February 14, 2011 | Megan Woolhouse
FRANKLIN — For the first time in years, Bill and Donna Olson, owners of a small contractor supply company, feel hopeful. Sales of power tools, ladders, and generators are up. More customers are visiting their showroom. Most important, nails — their business’s lifeblood — are selling again.
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At Marathon Tool, the Olsons said hiring one counter clerk at $35,000 a year would require them to also pay $1,750 in state unemployment insurance premiums, $2,170 in federal payroll taxes, $583 for workers’ compensation insurance, and $280 for federal unemployment insurance. Just covering the salary would require them to sell about 17.5 million more nails; add the nonwage costs, and that’s another 2.4 million nails.
Costs are rising, too — which must also be considered in the hiring equation. Between 2009 and 2010, for example, Marathon tool’s state unemployment insurance costs jumped by $10,000 even as company sales plummeted 60 percent.
The Olsons are also bracing for another 40 percent increase in the spring as the state replenishes the fund that pays benefits. The state Senate recently approved freezing the rates this year to avoid such a big increase; the House has not taken action yet.
Donna Olson said she understands unemployment benefits are an important safety net for workers. But the anticipated costs make her rethink hiring.
“You’re hurting the people who should be the solution to the problem,’’ she said. “Anyone who thinks it doesn’t hurt small business is crazy.’’
Bill Olson started Marathon Tool in 1986 with a loan from a friend, buying nails manufactured in China and Korea and reselling them to New England contractors. Operating out of a sunroom in Olson’s Norfolk home, the company was a family affair. Donna Olson left her job as an elementary school teacher and helped build the business.
(Excerpt) Read more at boston.com ...
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It paid off. By 2006, Marathon Tool had a storefront and $4 million in annual sales. At their peak, they employed 17 full- and part-time workers. “We were humming right along,’’ Donna Olson said.
In general, hiring workers in the United States is expensive, especially compared with emerging competitors such as China and India. In Massachusetts, the costs are even higher.
Massachusetts has the highest labor costs of any state, according Moody’s Analytics, a forecasting firm in West Chester, Pa. The firm’s Cost of Doing Business index estimates that overall labor costs in Massachusetts are 14 percent above the national average.
“It’s certainly a problem for employers, and if it’s a problem for enough employers, it’s a problem for the public,’’ Northeastern University economics professor Alan Clayton-Matthews said. “For job growth, one of the things you need is competitive business costs. You need to be competitive.’’
Massachusetts experienced strong job growth in the first half of last year, but the economy slowed considerably in the second half, with the state shedding 2,100 jobs in December. While Massachusetts has added jobs faster than the nation as whole over the past year, it has historically lagged national job growth.
The recent recession hit the construction industry and Marathon Tool hard. Struggling to survive in 2008 and faced with rising health care costs, the Olsons eliminated health care coverage, offering employees a one-time payment of up to $5,000.
They also laid off workers for the first time. And the layoffs of those five employees came with a price tag. Much the way auto insurance rates rise after a crash, the Olsons’ unemployment insurance rates rose after the layoffs, tightening the financial squeeze.
But in the past three months, contractors have been buying more of the cases of nails that had gathered dust in the Olsons’ warehouse. The sale of each case — containing 4,000 nails — gives Donna Olson hope.
As demand has increased, the Olsons, like many other business owners, have increased the hours of existing employees, rather than take on the costs of hiring new ones. Their company recently started scheduling overtime for the first time.
Sitting in their office, warmed by a space heater, Donna Olson said that whenever sales pick up, costs do, too. There is little break from the strain of decisions affecting their livelihood and their employees.
And hiring new employees — as Obama’s recent speech urged — still feels like too much of a risk. Yes, she said, things are better, but only in a relative way: “We’re treading water instead of sinking.’’
Megan Woolhouse can be reached at mwoolhouse@globe.com.
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These people who run this tool store are more in tune with reality thn the assholes in DC.
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You got utterly wrecked on the gas prices thing. Do you really want us to bump that thread and expose your stupidity and ignorance again?
Please do. Because as it stands, the thread consisting of me asking you to verify your claim with actual proof where Obama stated he liked high gas prices and you did everything but.
So yes... if you want to revisit the scene of your constant back pedaling and excuse making go right ahead. You still haven't posted a single link or proof where Obama said the words that you claim he said.