Thursday, April 11, 2019

Jobs combat poverty; over-regulation discourages businesses and jobs

Magatte Wade was born in the West African nation of Senegal, was educated in Germany and France, then came to the U.S. She is a frequent speaker at business conferences and college campuses, including Harvard, Yale, Columbia, Cornell, Brown, Dartmouth, MIT, and Wharton. She has started businesses and with her husband is working to create schools in Senegal.

Part of one of her addresses featured on YouTube dealt with how not to be poor. What she said to her audience is a good lesson for everyone.

“People are poor. Why are you poor?” She answered, “you're poor when you don't have enough money to meet your basic needs.” 

And then, the big question: “Where does a source of income come from for most of us?” The answer is, as former Vice President Joe Biden famously said: that three-letter word: ‘JOBS.’

This is not a bolt from the blue to most of us, but to her audiences in colleges and in her native Senegal, this solution may not be so obvious. In fact, some of her audiences responded that jobs actually come from government.

Yes, she responded, some jobs are provided by government. But where does government get the money to pay its employees?

“It comes from taxes. People who work, employees; people who hire them, the companies and employers, pay [taxes] so that we in turn pay these government people.”

So, “we're back to commerce … we're back to business.”

“So I say,” Wade continues, “okay, if ‘jobs’ is the solution to this massive, massive problem we have out there of poverty, then don't you think that maybe we should try to think about where jobs come from?”

If jobs are the answer, and jobs come from entrepreneurs, businesses, “then don't you think that we should really try and pay attention to what type of environment those businesses get to operate in,” Wade asked?

What a concept! Since businesses large and small provide the jobs people need to avoid poverty, and enable workers to pay taxes, and pay taxes themselves to support the government, let’s be careful about the environment that we create for businesses.

In America, it should be easy for someone with a new idea or just the drive to start a business that will provide goods or services, and hire some people to work in it, so long as it follows reasonable laws and regulations. The operative word is, “reasonable.”

Far too often, this is not easy, and sometimes impossible. 

Writing in Business Insider, Michael Snyder addresses this issue. “Small business in the United States is literally being suffocated by red tape. We like to think that we live in ‘the land of the free,’ but the truth is that our lives and our businesses are actually tightly constrained by millions of rules and regulations.” 

“Today there is a ‘license’ for just about every business activity,” Snyder adds. “In fact, in some areas of the country today you need a ‘degree’ and multiple ‘licenses’ before you can even submit an application for permission to start certain businesses.” It gets worse. “And if you want to actually hire some people for your business, the paperwork nightmare gets far worse. It is a wonder that anyone in America is still willing to start a business from scratch and hire employees.”

“The truth is that the business environment in the United States is now so incredibly toxic that millions of Americans have simply given up and don't even try to work within the system anymore.”

To put the regulatory issue into perspective, the Federal Register is where federal rules are catalogued. The number of pages in it was about 2,600 in 1936. That’s a lot of pages of rules, but it pales in comparison to the calendar year of 2016, when the number of Federal Register pages stood at 95,854.

Certain variables factor into this: Some rules take more pages than others, and page size is also important. However, most novels have 250 words per page, and a really long novel has 425 pages. At the end of 2016, the Federal Register had as many pages as 225 long novels, and 383 normal-sized ones.

President Donald Trump has implemented efforts to reduce regulations by signing an executive order on Jan. 31, 2017 for the agency requesting a new regulation to cut two older regulations.

A Daily Caller story said that the Trump administration “reported $23 billion in savings from 176 deregulatory actions in fiscal year 2018. Even more consequential, the administration has issued 65 percent fewer ‘significant’ rules — those with costs that exceed $100 million a year — than the Obama administration, and 51 percent fewer than the Bush administration, after 22 months in office.”

That’s a start, but a lot more needs to be done to give Americans the freedom and ability to start a business or get a job.

A final word from Magatte Wade: “Not living up to our potential is a failure for which the only person who can possibly be responsible is oneself.“

She’s right, of course, but things like over-regulation make that much more difficult for even those who are determined to succeed.

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