I have long believed that the most oppressed and discriminated against minority in the United States is the self-employed entrepreneurs. Now Bard College professor and editor-at-large for The American Interest agrees with me. Some may consider Professor Mead somewhat left of center in his views, and he may be on some issues, but he is squarely libertarian in this regard.
Writing for The American Interest online (link here) Mead opines that “the American legal and regulatory system is set up to bind as many people to employers as possible. The government wants you to be a wage slave and sets up a regulatory framework that keeps as many of us as possible yoked to bosses and management.”
“The IRS doesn’t like the self-employed, fearing they may conceal income. Banks and credit card companies view such people with suspicion, and it is notoriously difficult for start ups and part time enterprises to have access to formal finance . . ..”
He goes on to demonstrate that the self-employed pay both sides of the payroll taxes, cannot deduct medical insurance premiums, and are subject to all kinds of regulations that disproportionately burden them.
“There are other, subtler ways in which the current system favors old style large employers over small firms. The cost of hiring people can be prohibitively high for small businesses: the paperwork involved in hiring so much as a cleaning person or babysitter can be cumbersome. Hiring full time workers involves negotiating the requirements for worker compensation, unemployment insurance and much else. The cost of these barriers cannot be calculated: jobs foregone, businesses stifled in their cradles, ideas untested, innovations untried.”
Mead makes some suggestions as to how government can help self-employed entrepreneurs – mainly by getting out of the way (a suggestion Ayn Rand made 55 years ago).
“In order to create the kind of job and service explosion that can provide better incomes for more Americans going forward, the government needs to shift policy. It must favor the small firm and entrepreneur: the owner-proprietor group needs to become the apple of the government’s eye. Their taxes should be cut; their paperwork burdens drastically reduced; regulations should be rewritten and simplified to meet their needs.”
Having been self-employed for over 30 years, I can attest to Mead’s observations.
Walter Russell Mead’s comments are also in today’s Wall Street Journal in the Notable and Quotable feature. See link here