Tuesday, November 30, 2010

One suggestion to improve employment in the US

Of course, I know that TPTB will never take this suggestion, but here it is:

1. A very large fraction of the employment in the US is by small and very small businesses
2. Administrative, legal, and tax codes are absolutely full of constants of the form---this applies to all businesses with more than N employees
3. A lot of businesses deliberately stay lower than various values of N because of the immense compliance burden involved with the addition of employee number N+1
Therefore, take all such constants, and double them. Thereafter, index them to the population of the US.

You'll probably see a large wave of pent-up hiring where economically hiring the N+1, N+2 makes economic sense but for the added compliance costs for those employees AND the 1st-Nth employee. In addition, you'll have to enforce these rules on less companies, which means it'd cost a negative amount of money. By allowing 'small' businesses to scale to a larger size, this will also increase the competition they represent to the 'big boys', who love rules that protect their incumbency and increase barriers to entry.

1 comment:

B Lode said...

I agree 100%. I was going to agree 50%, but with these new economies of scale....