Not Such a Small Health Problem

The plight of small business during this severe recession is being exacerbated-at both the local and national levels-by ever increasing government mandates and new taxes. As Investors Business Daily points out: "While the stock market has been buoyant over the last several weeks, small businesses, the heart of U.S. job creation, remain extremely gloomy. April's survey of the National Federation of Independent Businesses shows deep pessimism among small-business owners with the "Optimism Index" showing readings under 90 for the 18th consecutive month. The NFIB calls this trend "unprecedented in survey history" and "not the picture of an economic expansion." The roots of this pessimism lie in slow sales, uncertain access to credit, uncertainty about the economy and the impact of increasing government regulations and spending, particularly with respect to health care and finance."

The problem with ObamaCare in particular, is that its mandates begin immediately, while benefits-unclear at best-don't kick in until 2013: "We have never before passed major legislation that both increases taxation substantially next year, while delaying the bulk of its "benefits" for at least four years. Whether or not you think that health care reform will benefit small businesses, what is clear is that for the next four years, as the fight continues, there will be more uncertainty surrounding the actual implementation of the reform, making planning more difficult, especially for resource-constrained small businesses."

And the uncertainty can be directly linked to the following frightening prospect: "It is true Speaker Nancy Pelosi said that "we have to pass the bill so that you can find out what is in it, away from the fog of controversy." Even this was way too optimistic. The fog is here to stay. The Patient Protection and Affordable Care Act creates roughly 100 new Washington bureaucracies that in turn will write the roughly 100,000 new regulations that the laws contemplate. Think of an instant replay of the IRS, its code and all its regulations, but happening in 100 days instead of 100 years. It's enough to make a small businessman's brain explode."

Indeed it does-and we haven't even touched upon the additional costs that kick in as soon as a small business owners payroll exceeds 50 workers. As one small businessman tells it: "The 51st employee could mean $100,000 in costs. I’ve been calling it the concrete ceiling,” he said. “No employer is going to hire No. 51 if it brings all these mandates down on you, because they’re pretty onerous.”

And on the local level, the city council is considering a paid sick leave law. It's proponents make the following point: "Between 1.65 and 1.85 million working New Yorkers do not have paid sick leave. (Sick in the City, Oct. 2009). For these New Yorkers, taking time off from work means the loss of a day’s pay, or worse, loss of a good shift, other retaliation, or firing. The New York City Paid Sick Time Act would enable workers in the City to earn up to nine days of paid sick leave per year, while employees of small businesses would be entitled to five paid sick days."

Yet, consider the potential impact that such a law might have on the viability of these already beleaguered small firms. Has the council determined the economic impact that this mandate would have on small businesses? And, if not, is it better to mandate this sick leave provision and thousands of jobs by doing so-as stores go under from the added costs?

We should all keep in mind the following observation from the IBD: "Without a meaningful upturn in the small business jobs picture there will be no real economic recovery." Yet, unmindful of this salient fact, the mandaters continue to wreck havoc on the economy. We'll give the IBD the last word: "For the small-business owner, Washington {and NYC} has become the arsonist pouring gasoline on the fire he is trying to put out."