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Instead of helping to encourage small businesses, the government is freezing their economic growth through excessive taxes, over-regulation, and complicated compliances.

America leads the world in small business creation. These small businesses hire millions of employees and helps the country in it’s overall economic growth. Yet the federal, state, and city government is slowly killing small businesses through excessive taxes, over-regulation, and complicated compliances.

Raising the Minimum Wage

The American government has recently tried to raise the minimum wage in order to help employees make a better living. For example, in Seattle, Ritu Shah-Burnham’s pizza franchise was required to raise her pay for employees from $7.25 to $15 an hour. As a result, she could no longer cover her costs, lost her business, and all her employees lost their jobs.

The Affordable Care Act

The Affordable Care Act requires that all businesses must provide health insurance for everyone with at least 50 employees who work full time. As a result, many small businesses have reduced the hours of their employees to under 30 hours a week and are keeping their workforce under 50 employees. For example, Richard Clark’s janitorial business in Florida went from 50% of his 200 employees working full time to 20% of his now 150 employees working full-time.

Over-Regulations

There are over 175,000 pages of regulations for small business from the federal government alone, not to mention many more from states and cities across the country. For example, Kenneth Jaroshch’s bakery in Chicago is now banned from using trans fat and partially hydrogenated vegetable oil. He worries that without these key ingredients, people will no longer like the new taste and texture of his baked goods, and therefore, could lose his profits, and eventually, his business.

When you look at the overall value of small businesses on America’s economy, you would think that the government would do everything possible to encourage their creativity and promote their growth, but sadly, the opposite is true. Through things like raising the minimum wage, the Affordable Care Act, and over-regulation, small businesses are struggling to survive. Unfortunately, some things that the government tries to do to help small businesses grow, only, ends up creating more problems that they cannot overcome.

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Key Points:

  • Raising the minimum wage.
  • The Affordable Care Act.
  • Over-regulations.

Quote This:

The American Dream is that any man or woman, despite of his or her background, can change their circumstances and rise as high as they are willing to work. -Fabrizio Moreira

See Also: Culture, Politics

Talk About It
  1. What is your initial reaction to this topic? What jumped out at you?
  2. Name a small business you loved, but it ended up going out of business? Why do you think they failed as a business?
  3. How could raising the minimum wage be a good thing for employees? How could it end up hurting a business?
  4. How did the Affordable Care Act help people who could not afford health care before? How could it end up hurting their overall income? How do you think the government’s replacement program for the Affordable Care Act will affect small businesses?
  5. Name some regulations you think are ridiculous for schools, cities, or big and small businesses.
  6. What are some other things the government has done to hurt small businesses? What are some government programs that have helped small businesses? What can the government do to help small businesses today?
  7. Write a personal action step based on this conversation.