Last week , after over forty years in business, A Maine institution closed in Manchester, Maine. Ballard Meats and Seafood was a locally owned family business that epitomized small businesses in Maine. And now it is closed. For the first time in US history, there are more businesses closing than are being started in America. There is no expectation that that trend will change unless the climate for starting and running a business changes.
Running a business in the climate we are in today is much like being the target in a game of whack-a-mole. Except that the game is a little twisted, with the business owner as a single mole-in-the-hole, and government bureaucrats, politicians and the like circling with hammers, just waiting for the mole to stick its head up.
Here in Maine, the hammers are poised, ready to whack business owners across the state. In Portland, the minimum wage is raised. And two restaurant owners are facing increased payroll costs that can render their businesses no longer viable. One, a very popular family restaurant, faces an increase of fifty to sixty thousand dollars a year. Another, a Portland icon, is looking at one hundred to one hundred fifty thousand dollars a year in added payroll costs. Yet they will get no additional hours of work, no additional productivity from their cooks, waiters and other staff. And the cook making fifteen dollars and hour will look at the sixteen-year-old kid washing dishes making fifteen dollars and hour, and say what? “I want a raise!” Costs skyrocket. Whack!
My own company has been notified that our health insurance premiums will be raised by one hundred thousand dollars next year. After a thorough review, we are forced to absorb these costs, or pass them on to employees. This is typical under Obamacare, and across Maine. I have heard of increases of as little as 7% to as high as 40% for premiums in Maine businesses. Wham!
The IRS comes a knocking. OSHA pays a visit. The EPA finds a reason to check on the disposal of a cup of solvent. Every one of these agencies, with the direction of the Obama administration, can cause death by alphabet for any given business. This has almost become a hidden, indiscriminate tax on unsuspecting businesses across Maine and the country. Bam, Bam, Bam!
The Justice Department finds that you do business in cash, seizes your bank account, and never even files any charges of wrongdoing. They don’t have to. Its enough that they can simply make the accusation. Businesses and business owners across the country have been faced with these asset seizures, and forced out of business before they could get to court and resolve the illegal taking of their money. Bang!
Between 2009 and the end of 2013, the Federal Government created over 13,000 new rules and regulations. Most of these rules and regulations, with the force of law, impact businesses with compliance costs, penalties, direct costs. Even when there is no way to even know that these new rules and regulations exist. Whack, wham, bam, bang……….
There is also a chicken and egg thing going on in today’s workplace. There is a lot of grumbling from employees regarding the perceived push from corporations, company owners and corporate managers to get more from their people. The work force is under the gun, working longer hours, pressed to be more productive. And this is where the chicken and egg thing comes in.
With these laws, rules and regulations being as extremely disruptive to the market as they are, business owners and managers are conceding these things that they cannot control, and then turning to the things that they can control. Payroll reductions through layoffs, and then relying on those still working to fill the gaps.
Pressing staff to do more with less. Working longer hours themselves, compromising their personal lives as well as those that work under them. Reducing benefits, asking employees to pay a larger share of their health insurance, increasing deductibles. Anywhere they can squeeze to remain in the black.
This is the real world in today’s marketplace. Until we address these staggering costs to businesses in Maine and across the country, we can talk until we are blue in the face about business development and growing the economy. Without small businesses, and the business owners that make them work, we will struggle. Ballard Meats & Seafood sited the high cost of energy, increased insurance costs, and the recent escalation in costs for their meats as their reason for closing up after forty years. They are but the tip of the iceberg if we don’t reverse the trend of driving market disruption through government fiat.