530-993-4379
Sierra Booster
  • Home
  • Newspaper
    • Latest News
    • Letters to the Editor >
      • Submit Letter to the Editor
    • Old News Archive
    • Photo Tour
    • Events
    • About Us
    • SUBSCRIBE
  • Advertiser Directory
    • Advertiser Press Releases
    • Website Sponsors
    • Advertiser Area
  • Buy Ads - Services
  • Fishing Report
  • Contact Us
  • Admin Log In

Embrace Entrepreneurship to Win the War on Poverty

1/23/2020

0 Comments

 
By Wayne Winegarden

More than 38 million Americans are living in poverty, according to the latest U.S. Census data. That's just under 12 percent of the population.

Not exactly what President Lyndon Johnson had in mind when he declared war on poverty in 1964. Since then, the U.S. poverty rate has averaged about 13 percent. It's declined slightly during economic booms and ticked up during recessions.

In other words, the War on Poverty has been fought to a draw, despite trillions of dollars in federal spending. Yet more spending is exactly what the leading contenders for the Democratic presidential nomination are calling for as part of their effort to alleviate poverty.

There's a better way to help people climb the economic ladder. And that's by making it easier to be an entrepreneur.

Entrepreneurship is one of the surest ways for those with low incomes to beat a path into the middle class. A study from the Small Business Administration found that "self-employed workers who own incorporated businesses have much higher earnings than all other worker groups in low-income areas."

Entrepreneurship is also a pivotal way for immigrants to secure the better life they sought by coming here. Nearly 30 percent of all new entrepreneurs are immigrants.

But as a new report on the state of entrepreneurship from the Pacific Research Institute shows, government has erected barriers that make it difficult for low-income entrepreneurs to get their businesses off the ground, hire more workers, and work their way out of poverty.

These barriers include costly business taxes, fees, and permits; a complicated tax code that requires significant out-of-pocket expense for compliance; nonsensical occupational licensing laws that impede a person's right to work; and exceedingly high minimum wage laws that make it difficult for entrepreneurs to create jobs.

All told, small businesses with fewer than 50 employees face nearly $12,000 in costs per worker just to comply with government regulations. Adhering to the tax code costs very small businesses -- those with one to five employees -- about $4,300 per employee.

There are several market reforms that policymakers can deploy to reverse this trend. In light of these unconscionable tax and regulatory costs, policymakers should cut bureaucratic red tape, simplify the tax code, and jettison ill-considered new regulations such as a $15 minimum wage.

Reforms should also focus on improving low-income entrepreneur’s access to capital, which is perhaps the biggest hurdle aspiring businesses must overcome.

Starting a business takes an estimated 4.4 times the median net worth of an African-American household. It takes four times the median net worth of the average Latino family.

The Federal Reserve’s annual Small Business Credit Survey notes that firms seeking between $100,000 and $250,000 have the most difficult time securing financing. These are the microbusinesses that low-income entrepreneurs are building from the ground up.

Community banks are the traditional providers of credit for these firms. But they've been stymied by overly burdensome federal regulations. Reforms enacted in 2018 exempted small banks from some of the Dodd-Frank Act's most onerous regulations; that should help improve small businesses' ability to access credit in the future.

Starting a new business has always been a piece of the American dream. Unfortunately, too many government-created obstacles stand in the way of entrepreneurs toiling to produce better lives for their families. Removing these obstacles is essential to ultimately winning the War on Poverty.

Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute. Download a copy of his study “Entrepreneurship as a Pathway to the American Dream” at www.pacificresearch.org. This piece originally ran in the San Francisco Chronicle.
0 Comments



Leave a Reply.

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    April 2014
    September 2009

    Categories

    All
    2015
    Sierra County News

    RSS Feed

    Vie
    ​w Old News

CONTACT US:

Sierra Booster Newspaper
PO Box 8
Loyalton, CA 96118
Phone: 530-993-4379
Fax: 844-272-8583
Email: jbuck@psln.com

Website Privacy Policy​
Picture
Local Weather
©Copyright Sierra Booster - Sierra County News - Editorial
Website by Chamber Nation