Small Businesses Threatened by Increasing Regulation

A friend shared an interesting article that could threaten the livelihood of small business in America. Being a small business owner for over 37 years I understand the risk, effort and opportunities that making individual business decisions involve. This decision by the National Labor Relations Board increases the risk and effort, while decreasing the opportunities for small business owners by the government having greater control of a small business while taking that control away from the individual owner.

Business owners trying to keep a clear understanding and meet the federal guidelines regarding the separation of employees from independent contractors now will have the lines muddier. This opens the door for increased liabilities regarding workers compensation, unemployment compensation, insurance liability, overtime, etc.etc.

This reminds me of the gerrymandering of election districts that political parties do to control the outcome of elections. The control of  electing our electing government officials is taken away from the individual and put in the control by the parties redistricting.

Individual liberty and the freedom to succeed or fail has been the cornerstone of entrepreneurship. It is what made America a diverse nation in the first place. People flocked to America because they wanted the freedom to control their destiny and escape the governments controlling every aspect of their lives.

After reading this interesting article how do you feel about this decision by the National Labor Relations Board?

From – Small Business Solutions – by Diana Furchgott-Roth

Under a National Labor Relations Board decision released on Thursday, the Board has dramatically expanded the numbers of “joint employers” in America. Now, employees of franchised business such as Burger King may be classified as employees of the parent company. Employees of subcontractors, such as office cleaners, may be classified as employees of the company that hires the subcontractor.

With its decision, the Board overturned a prior ruling by its regional director that employees of Leadpoint were not joint employees of Browning Ferris, a recycling plant that subcontracted operations to Leadpoint. Subcontractors and franchisees across the country had better watch out for more lawsuits and higher costs of doing business.

Last week, speaking at the Detroit Economic Club, Republican presidential candidate Senator Marco Rubio said, “The National Labor Relations Board is on the verge of declaring that David doesn’t even own his business, that he is a ‘joint employer’ with his franchisor. The likely impact is that fewer franchises will open, and costs and litigation will increase for existing ones.”

Before this decision, if a firm did not exercise authority over the employees of its subcontractors then it was not counted as an employer.  Now the NLRB is saying that if a firm just possesses the authority to control its subcontractor’s employees—even if it does not use this authority—then it is a joint employer.

The implications of this decision are immense. Millions of franchises are at risk of being told that they are joint employers with parent companies such as Jiffy Lube, Dunkin Donuts, or H & R Block.  Millions of subcontractors may find that the company that is employing them has morphed into a boss. This raises the costs of doing business, encouraging companies to reorganize or go offshore.

The Board notes, disapprovingly, that “the diversity of workplace arrangements in today’s economy has significantly expanded. The procurement of employees through staffing and subcontracting arrangements, or contingent employment, has increased steadily…”

What the Board fails to note is that franchises and subcontractors have come about as the most efficient way of providing particular services.  Franchises make it easier for people to start their own businesses, and independent contractors can move from one employer to another at will, or work for multiple employers at one time.

The Board’s ruling follows guidelines from the Labor Department  on when to classify workers as employees, who are entitled to fringe benefits, or independent contractors, who are not.  These guidelines, which became effective in July, attempt to make it more difficult for employers to hire independent contractors.  In June the Labor Department issued new proposed expanded overtime revisions that would reduce workplace flexibility for millions more workers by prohibiting time off in exchange for extra time on the job.

With the new Labor Department rulings and the National Labor Relations Board decisions, President Obama wants to move America back to the mid-20th century when people worked for one employer for most of their lives and independent contractors were less common.  The sharing economy, with Uber and Airbnb, were unimaginable.

One result of the new 21st century economy is that unionization levels have decreased. People don’t want to pay union dues and initiation fees.With the share of wage and salary workers who belong to unions declining from 20 percent in 1983 to 11 percent in 2014, unions are feeling the pinch. They lack dues to pay salaries for union bosses and give political contributions to political parties, practically all Democrats.   That is why the Board is trying to make it easier for unions to coerce workers into joining. It is far easier for a union to organize one large workplace than several small ones.

Unions are particularly interested in the fast food industry because of its rapid turnover.  On average three people per year occupy one slot at a fast food restaurant. People come for a short period of time, such as the summer, then leave. Someone else might start in the fall. If each of these three people had to join a union, the union would get three sets of initiation fees per year.  With fees at about $50 per person, that is $150 annually.

As federal and state governments have tried to expand the benefits that employers must provide, it has become more advantageous for small firms to form to avoid these mandates.  Take the Affordable Care Act, for instance.  Firms with more than 50 employees have to offer a certain level of health insurance or pay a penalty.  Firms with fewer than 50 workers are often exempt from other mandates, too. Contracting out some operations keeps the size of the firm down, along with the costs of doing business. With the new rules, watch for more companies going offshore, and the share of Americans who are employed or looking for work declining further.

The franchise model has dramatically expanded the number of small businesses in America. Congress should place a clear definition of an employer and a subcontractor in the law.  The NLRB’s decision is a travesty that Congress and the next president can and should reverse.

 

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Slums and Opportunities

Below is an email that was sent to me from a friend who lives here in Pennsylvania but is originally from the country of India. He brings a unique perspective to everyone he meets because he has not only seen but lived in a country where opportunities are limited. Many Americans do not realize the opportunities afforded us here in America. I wanted to share this email to give you a first hand perspective of those less fortunate.

Dear Greg,

I returned from a week-long trip to India. I spent a week in New Dehli – India’s capital, where I was visiting my family. I just wanted to share with you an image that never ceases to disrupt my sense of reality.

The attached is a picture of a slum behind my father’s home. Let me describe it briefly. It is a slum comprised of the lowest caste of Hindus–you may know them as “untouchables.” They are in the trash collection “business” and unfortunately end up living in the midst of it. As a result of cultural stigma, and little opportunity to work themselves to a higher station in life they end up in these dire circumstances. Their life expectancy averages 45 years of age–most of them end up dying by a more lethal form of tuberculosis.

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In the midst of this mess was a child who might have been 3 or 4 years of age who smiled and waved at me. While this sign of life in the midst of poverty and death brought me great joy, it also made me think about her life. Knowing that she had few, if any prospects to make her way out of poverty, made this whole scene that much more dreary.

Let me be clear: the people in the slum do not lack ambition, and are not less able than the average person. There are simply fewer outlets that allow their ambitions and abilities to be realized. For every one that goes on to prosper, there are millions that continue to languish in such squalor. These scenes are common across India.

This is one reason I fight: to show the world that ideas matter. Ideas that respect the individuality and liberty of the person are critical to human flourishing. Ideas that promote free markets and limited government allow people to pursue their dreams and ambitions and, on their own, become productive and empowered citizens.

I’m glad to be back and fight with you and many others.

I look forward to connecting with you soon.

Best,

Abhi

(Disclaimer: I was more optimistic about India this time because a lot had, indeed, changed. No surprise to me though that lower taxes in the city of Delhi, and weeding out corruption coincided with it).

Abhi Samuel, a native of India is the Commonwealth Foundation’s Director of Entrepreneur Engagement.

Crucial Conversations

There are a few defining moments in our lives that make all the difference. Many of these moments come from crucial or breakthrough conversations with important people in emotionally charged situations where the decisions made take us down one of several roads, each of which leads us to an entirely different destination. When a challenge in life is met by a response that is equal to it you have success.
Just as the world is changing at a frightening speed, so have the stresses and pressures we experience. This makes it all the more imperative that we nourish our relationships, and develop tools, skills and enhanced capacity to find new and better solutions to our problems.

25 years of research with 20,000 people and hundreds of organizations, by Patterson, Grenny, McMillan, and Switler have proven that individuals who are the most influential, who can get things done and at the same time build on relationships are those who master their crucial conversations.

Crucial conversations create an entirely new level of bonding. They transform people and relationships. Not a compromise between two opposites but a higher middle way, like the apex of a triangle. Because two or more people have created something new from genuine dialogue, bonding takes place just like the bonding that takes place in a family when a new child is created. When you produce something with another person that is truly creative it’s one of the most powerful forms of bonding there is.

Crucial conversations are interactions that happen to everyone. They’re the day-to-day conversations that affect your life. What makes one of the conversations crucial as opposed to one that is not?
1. OPINIONS VARY
2. STAKES ARE HIGH
3. EMOTIONS RUN STRONG

What makes each of these conversations crucial?
It’s that the results could have a huge impact on the quality of your life.
By definition, crucial conversations are about tough issues and were masters at avoiding tough conversations.

For example:
1. coworkers send an email to each other when they should walk down the hall and talk turkey
2. bosses leave a voicemail in lieu of meeting with her direct reports
3. family members change the subject when a shoe gets too risky
4. a friend who learns through a voicemail message that his wife was divorcing him

We use all kinds of tactics to dodge touchy issues
If you know how to handle and even master crucial conversations, you can step up and effectively hold tough conversations about virtually any topic.

Educations Role in the Department of Corrections – Part 2

I agree with John Wentzel, Secretary of the Pennsylvania Department of Corrections, that investing in a community re-entry program is important, but the question is what kind? Do we need to develop more work skills and certification programs that will enable those coming out of prison to obtain a job? Many do obtain jobs but obviously the numbers demonstrate they don’t keep those jobs when life happens and they end up back in prison.

Think about this; How many of us thrive in a negative work environment? We’re educated, have a job, have a future yet it is easy to be negative in a negative work place. What is worse than a negative work place, or negative home environment? Our own negative mind. How many of you right now, while I have been reading this have been thinking of something else?

  • What are the kids doing?
  • Did I turn the iron off?
  • What do I need to finish or do instead of reading this blog post?

We talk to ourselves more than others talk to us. We create our own environment in our mind, and if that mind is negative so is our world. Or what if that person leaving prison sees themselves as a “Marked Man or Marked Woman”? Believing the world’s against them, or that their past determines their future.

I tell people all the time I don’t care if you just got out of Prison or Princeton – your future is how you view it

Negative Actions tend to produce Negative Results, just as Positive Actions tend to produce Positive Results… but not always, because life happens to all of us. So would you agree that it is important, no vital that we help these individuals create a Strong Positive Mindset and then the skills and direction to apply this attitude?

Then what skill sets do they need? Because even when we are positive things don’t always go as planned. The same skills you and I need to succeed in life. We all have the same needs and face the similar everyday obstacles and few of them have to do with a work skills, rather skills in areas of life that even people successful in the work world struggle with. In prison inmates have to be tough but are they mentally fit to fight the battles of life?

Consider these;

  • Purpose – how many adults have made this statement: I still don’t know what I want to do when I grow up
  • Character – how important is character in living your purpose?
  • Attitude – it determines how we deal with daily obstacles and failures as well as our successes
  • Programming the Elephant – the ability to be a visionary in our lives
  • Game Planning & Doing – what is the strategy to accomplish our purpose?
  • Keeping Score – how are we doing in the timeline of accomplishing our goals or purpose?
  • Friendship – do the friends we have add value or detour us from accomplishing what is important?
  • Financial Management – looking at our society it is a skill many need to develop
  • Leadership Resolution – can we resolve to lead when we need to?
  • Conflict Resolution – conflict happens but how do we deal with it?
  • Systems Thinking – there is a system to everything if we just learn to think it through
  • Adversity Quotient – how do we deal with adversities WHEN they occur?
  • Legacy – what legacy do we want to leave?

I think we could agree these are powerful items to consider, but few of us give them either any serious thought or are not pro-active to live on purpose with a plan to make that purpose a reality. I believe the same could be said for our prison population. Why not look at education as far more than math, tech, welding, or earning a GED, but rather educating in areas of life that are necessary no matter what technical skill or degree a person possesses.

I suggest we look holistically at equipping individuals with the skills they need to succeed. To increase their rate of job retention and life retention by helping them figure out why they are leaving prison and for what purpose? Then give them the skills to deal with the obstacles that they will face including their and our biggest obstacle, self-mastery. The Mental Fitness Challenge might be the challenge they need to take, to fight the inside fight, so they don’t need to fight the outside, and end up back on the inside.

Educations Role in the Department of Corrections – Part 1

I recently spoke for the State of Pennsylvania Department of Corrections to educators from various state correctional institutions in the Northeast.

The discussion centered around the impact educators can have in improving the recidivism rates of inmates leaving these institutions after incarceration.

Pennsylvania Department of Corrections 2013 Recidivism Report indicates recidivism rates have remained virtually unchanged over at least the past decade in Pennsylvania. Approximately 6 in 10 released inmates are rearrested or re-incarcerated within three years of release from prison. Younger released inmates are more likely to recidivate than older inmates. A released inmate who is under 21 at the time of release from prison is more than twice as likely to recidivate within three years than a released inmate who is over age 50. The current Pennsylvania budget at 2 Billion dollars is HUGE. In Pennsylvania it costs approximately $35,697 apiece to house the state’s 51,321 prisoners a year.  That’s more than it costs a family to raise a child annually.

National statistics are no better. In fact other states’ recidivism rates were last updated in a 2002 report generated by the Bureau of Justice Statistics. In that report an estimated 67.5% of prisoners released in 1994 were rearrested within 3 years, an increase over the 62.5% found for those released in 1983. This means in the last 30 years that 2/3 of the inmates released returned to prison, and that there has not been any improvement despite the billions of dollars spent in education and rehabilitation of inmates. Imagine going to a business and 2/3 of the time it failed to meet its’ objective? They would be out of business, but not a government institution. Whether it is the Department of Corrections or the Department of Education the reply always seems to be the same. Not enough funding. We cannot continue to justify spending the taxpayer’s hard earned income on more and more on programs when they continue to fail. What do they say the definition of insanity is; continuing to do the same thing expecting different results?

In speaking with officials in the education sector of the Dept of Corrections they indicated there are plenty of programs that provide adequate education for inmates to receive training and certifications that allow them to obtain employment. Numerous employers large and small have been willing to give former inmates employment. But too many times the employers have been disappointed after hiring an inmate over another qualified unemployed individual and  investing money into hiring and training only to have them quit or be fired for a character issue; not being on time, not showing up, disrespecting the job or rules of employment, etc., not for being unable to perform the functions of the job. This begs to ask the question; are we perhaps not focusing on a key area, life skills issues that we all need to survive on the job. In fact life skills issues are skills we need to survive and thrive in all areas of our personal lives.

One example of success in accomplishing lower recidivism rates is Oklahoma who has one of the lowest rates in the nation at 28 percent. The low rate is a result in part of a pilot program the DOC had for inmates from Oklahoma County. The program places great emphasis on an inmate’s re-entry into society, by providing the knowledge and skills necessary to successfully rejoin the community.

John Wentzel Secretary of the Pennsylvania DOC said without any corresponding attempt to reduce the number of people sent to prison through investment in evidence-based policies, addiction treatment and community re-entry programs, the budget will continue to go up.

I believe education is one of those community re-entry programs. But what education should we provide? What is the mindset and what are the skill sets needed for an individual to succeed?

Let’s address first the question what does an individual’s mindset have to do with it? I believe everything! Sports coaches and athletes understand the role a proper mindset has to do with success in the sports arena. Research has demonstrated the correlation between the mindset of a patient and the outcome of a surgery or illness. Employers hire more and more on attitude knowing they can train a motivated employee.

In leadership we understand that the Actions we take are based on the Information we have in our lives and those Actions determine Results.

Information — Action — Results

 

 

 

 

Gerrymandering a New Government

According to Wikipedia – the definition of Gerrymandering:

In the process of setting electoral districtsgerrymandering is a practice that attempts to establish a political advantage for a particular party or group by manipulating district boundaries to create partisan advantaged districts. The resulting district is known as a gerrymander (/ˈɛriˌmændər/); however, that word can also refer to the process.

In an article by Douglas J. Amy Department of Politics at Mount Holyoke College he states;

Most Americans believe that who wins political races is decided on election day by the voters. But in a single-member district electoral system that is frequently not true. Who wins is often determined before voters even go to the polls – sometimes many years before. The outcome is decided by those who draw the district lines. If they decide to create a district that is 70 percent Republican, there is little chance the Democratic candidate will win. And Republican candidates will usually lose if a district is drawn so that it is predominantly Democratic. Voters go to the polls confident in the illusion that they control the fate of the candidates. But in reality they are often only participating in the last act of political play whose ending has already been written.

Which party wins the most seats may not determined by how many votes that party gets, but instead by how the district lines are drawn. 

In a recent article on February 15th 2014 in the DavidsonNews.net a community news website to share information and promote discussion about town news, events, and issues in the town of Davidson, N.C.

Former Congressional candidate and author Harry Taylor states ending gerrymandering is critical for democracy. “The state General Assembly can redistrict, or re-establish voting districts, after every 10-year census,” Taylor said in an interview. “The party in control can do whatever they want to do.”

Is there a solution?

Oliver DeMille and Orrin Woodward in their Bestselling Book LeaderShift provide a comprehensive plan with 28 specific, non-partisan constitutional and policy proposals

Other considerations;

Again Professor Amy weighs in;

Given the pernicious and clearly undemocratic results of gerrymandering, its elimination is obviously high on the list of those who believe in fair elections. But reform in this area has been slow in coming, and the problem continues to plague our political system. Some reformers have tried to challenge this practice in court, but they have been consistently unsuccessful. While the Supreme Court has said that redistricting plans can be challenged in federal court, they have consistently refused to overturn them. Strangely, while the Supreme Court has been eager to label as unconstitutional the practice of “racial gerrymandering” – the manipulation of district lines to increase the representation of minorities – it has been reluctant to criticize partisan gerrymandering even in its most blatant and undemocratic forms.

Obviously those in Politics (the Supreme Court is appointed by the highest of elected Politicians – President of the United States) have little interest in changing this long standing political maneuvering. Since Politicians have little interest in changing something that both parties want to use to ensure their candidates get or stay in office, perhaps a system where we live within those districts would be a solution to satisfy both parties, at least until the impact of “brutal reality” reveals itself.

Here is my simple proposal;

We have the technology to know who lives where and what their political philosophy is in order to create these districts, so why not have two separate forms of government to match their political philosophies. Since all politics for the most part boil down to a couple major issues; money and power, let those who believe in more government power and those who believe in less government each run their own system.

Let each party whose district they control, levy their taxes and provide services according to their plan of governing. In those districts that believe in a more liberal system of government where the government controls the economy and provides liberal benefits for their constituents let them do so. In those districts where the constituents prefer a more free market approach and personal accountability let them also tax and provide services to people in their districts. Other than those items of National concern such as providing for the general defense of the nation, etc., the districts would be self governing and self sustaining.

I believe what would happen in a fairly short period of time, would be that the debate over which system of governing is best, will not be necessary. The reality of each system to its constituents would reveal itself.

2014 – Let’s Consider Our Legacy…..Again

2014

In a post I did on January 2nd 2013 entitled Your Legacy I challenged us all to;

  1. Be thankful
  2. Change our input
  3. Determine our Legacy

If you haven’t been able to determine what you want that legacy to be for you, perhaps I can give you a perspective you may not have thought of, or some insight into a legacy beyond yourself. That is you know what legacy’s are really all about….what we did for others or what we did for mankind.

 In this excerpt of a recent article on the Legacy of 2013  by Oliver DeMille are some facts and thoughts on where America is headed. For you maybe this article can give you some ideas as to what you want your legacy to be.

During 2013 state governments in the United States passed over 40,000 new laws.

That’s not a typo. It’s 40,000 new laws — which means five times that many regulations when all the agencies of government write these laws into agency policies. It’s even more if you add the new federal laws.

Taken together, these signal a serious period of decline for America. We are a nation being overtaken by our biggest competitor (some would say future enemy) China, and simultaneously mired in skyrocketing levels of regulation.

Governments, federal and state, now seem determined to regulate and overregulate every facet of our lives — private and business. Many entrepreneurs, who were already reeling from reams of Obamacare regulations, are now facing more government red tape from every flank.

The free enterprise economy is literally under siege. Those who think this is exaggerated should try to open a significant new business in the United States. Most of the biggest entrepreneurs and corporations who have attempted this recently have decided to build in China or some other economy instead. The U.S. government has become generally hostile to business.

This is a strange reality for the land of the free and the home of the brave. Long considered the bastion of world freedom and economic opportunity, America is consistently less appealing to many businesses and investors.

The December 31, 2013 issue of USA Today summarized this overarching trend by saying that “aristocracy” is now “in” in America.

Aristocracy, really? That’s a bold statement. Yet it is increasingly true. The lower classes are more dependent on government, and the middle classes only survive by using debt. Only the upper class, the elites, are financially flourishing — and many of them rely on international investment that is growing in foreign economies.

Anyone relying on the U.S. economy right now is concerned. What will the escalating rollout of Obamacare bring? How many more government regulations will come in 2014, and how will this further weaken the economy?

The experts are finally taking notice of sharply rising levels of regulation, even if Washington isn’t.

For example, Francis Fukuyama called our time “The Great Unravelling” (The American Interest, Jan/Feb 2014) and Steven M. Teles called it “Kludgeocracy in America” (National Affairs, Fall 2013). We have become a Kludgeocracy indeed, with more business-killing regulation every week.

In The Discovery of Freedom, Rose Wilder Lane said that,

“Men in Government who imagine that they are controlling a planned economy must prevent economic progress—as, in the past, they have always done.”

What is her definition of a planned economy? Answer: modern France, Britain, and the United States. She quoted Henry Thomas Buckle, who wrote:

“In every quarter, and at every moment, the hand of government was felt. Duties on importation, and on exportation; bounties to raise up a losing trade, and taxes to pull down a remunerative one; this branch of industry forbidden, and that branch of industry encouraged; one article of commerce must not be grown because it was grown in the colonies, another article might be grown and bought, but not sold again, while a third article might be bought and sold, but not leave the country.

“Then, too, we find laws to regulate wages; laws to regulate prices; laws to regulate the interest of money…The ports swarmed with [government officials], whose sole business was to inspect nearly every process of domestic industry, to peer into every package, and tax every article…”

This was written about France, just before it lost its place as the world’s most powerful nation, and it was published as a warning to Britain, just before it lost it’s superpower status. This quote applies perfectly to America today.

Great nations in decline need innovation and entrepreneurialism, but instead they choose anti-innovation and anti-entrepreneurial regulation. It’s amazing how every nation repeats this well-known but addictive path of self-destruction.

As Lane Kenworthy argues in Foreign Affairs, opponents of bigger government “are fighting a losing battle.” In the near future, he says,

“More Americans will work in jobs with low pay, will lose a job more than once during their careers, and will reach retirement age with little savings.”

But this will be offset, he suggests, by more vacation days, less working hours each week, and more government programs that pay for many of these people’s needs.

Many of the experts agree — he U.S. economy isn’t going to boom anytime soon, but this will be balanced for investors by significant economic successes in Mexico, South Korea, Poland, Turkey, Indonesia, the Philippines, and Thailand, among other places.

All of this adds up to an America on the verge of what Paul Kennedy called the “fall of great powers”: overreach in international affairs that spends much of the nation’s prosperity, and simultaneously too much government regulation at home — shutting down a nation’s innovative/entrepreneurial class at the same time that the government taxes and spends more and more.

This same pattern brought down the top leader status of Spain, France, Britain and the Soviet Union. Before these, it brought down Athens, Rome, and the Ottoman Empire. Unless the United States changes course, it is following this same blueprint for decline.

When historians look back on 2013, they may well see it as the tipping point to a rapid American downturn. Partisan conflicts, government spying on its own people, drastic government spending, constantly increasing regulation, the rapid rise of China — any of these could fuel real decline. Together they may be insurmountable.

But one thing stands out: In a nation desperately in need of innovation and entrepreneurial initiative, the government is handing out innovation-blocking regulations at a breakneck pace.

The good news in all this is that entrepreneurs don’t give up easily. Tenacity is part of their DNA. The future will be determined by this race between politicians (increasing regulations) and entrepreneurs (innovation and prosperity).

Whoever wins will lead the 21st Century.

Our future as a nation, as well as our children and grandchildren’s future depend on who wins. Perhaps the role you could play in helping to develop a stronger and freer America might be your legacy. So look at the last year and determine what you will do differently this year, then look beyond this year and determine when you get to the end of your life what you want your Legacy to be. Perhaps it will be one that changes the course of history for the benefit of all freedom loving people.

Be aware of the magnitude of YOUR significance and remember;

  1. Be Thankful – YOU are alive today to play a role
  2. Change YOUR Input – educate and develop yourself
  3. Determine YOUR Legacy – only YOU can