Thursday, February 13, 2014

Small businesses can now cut every expense but labor.

Every day, I become more and more convinced that we are being governed by idiots, and that Barack Obama is their king. 

As anyone who has ever run a 5-employee coffee bar knows that businesses have an income and businesses have expenses. 

Expenses are coffee, cups, cleaning supplies, cash register tape, stir sticks, flavor for shots, milk, chocolate and, yes, employee labor. 

Income is income.  It could be dollars, or it could be javelins, Coca-Colas, gasoline, eggs, butter, ammunition or anything else you would swap for a double-espresso.   It's what people swap for your coffee, cups, cleaning supplies, cash register tape, stir sticks, flavor for shots, milk, chocolate and, yes, employee labor.

Let's pretend that you have a chain of coffee bars, and you have 100 employees.  If so, you're going to be hit with Obamacare costs.  But if you have 99 employees, you can avoid that expense for another year. 

Any sane human will find a way to avoid that expense.  All sane humans will avoid that expense, if at all possible. 

If the costs of cups goes up, they will try to find a cheaper cup.  Ditto for coffee or cash register tape.

So if expenses go up to the point where costs have to be cut (whether it is in cups, labor or chocolate), how will Obama's Mouth-Breathers protect their reputations? 

They will make it illegal to reduce the number of employees.  I swear to God, they're going to make you swear to them that you didn't cut payroll to avoid paying the Obamacare shakedown tax. 

 Consider what administration officials announcing the new exemption for medium-sized employers had to say about firms that might fire workers to get under the threshold and avoid hugely expensive new requirements of the law. Obama officials made clear in a press briefing that firms would not be allowed to lay off workers to get into the preferred class of those businesses with 50 to 99 employees. How will the feds know what employers were thinking when hiring and firing? Simple. Firms will be required to certify to the IRS – under penalty of perjury – that ObamaCare was not a motivating factor in their staffing decisions. To avoid ObamaCare costs you must swear that you are not trying to avoid ObamaCare costs. You can duck the law, but only if you promise not to say so.

If you've ever run anything and tried to make a profit by doing so, you know that this is lunacy.  Labor is the same as cups, coffee, or chocolate. 
If you aren't making money, you have to cut where you can.  Anywhere you can. 

Godalmighty, I'm ready for the Rodham Administration to take over. 


MingoV said...

"Every day, I become more and more convinced that we are being governed by idiots..."

I knew we were governed by idiots decades ago. Every day I'm more convinced that the quality of idiots keeps falling.

Anonymous said...

No argument that a business has to cut where it has to cut.

That said if labor is the #1 target its pretty deflationary, no scratch that crazy deflationary.

Wages are after all the only way that demand in the private sector is created. We cannot all be net exporters and count on someone else to consume or production.

Its also a fast track to crony capitalism since that's one way to stay in business.

Its either that or a nice hell-ride to the 3rd, bolstered by a nasty tide of immigration

Understand that we've had a nasty war on wages since the 1970's and between trade arbitrage, immigration, mass entry of women in the work force and technology wages as percent of GDP of the average worker (the only accurate measure of wealth and status) are down 50% .

That is what sustains the economic malaise and the growth of the state. Keep wages high,. control the borders and trade , work the meme streams and you’ll have mostly a Conservative population

And so its not wrong, its often the correct thing to get wages and benefits down when everyone does that, and everyone will just for the competitive advantage in effect you are pushing the "D" lever at the voting booth no matter who you vote for.

Choose Wisely