Thursday, October 29, 2015

Hillary and Bernie at War with Big Business

As long as I can remember, Democrats have hated big business. They claim that they have too many tax loopholes; don't pay their workers well; ruin the environment; don't provide good healthcare plans or other benefits; and ship jobs overseas.  Its no wonder then, that during this election cycle, both Hillary Clinton and Bernie Sanders have both tried to outdo each other by bashing big businesses and, in doing so, have promised big regulatory changes to put them in their places.

The problem is that this is simply unfounded, political talk.  Most people don't realize how crucial big business is to the economy and jobs.

First, there's job creation.

Data Source: Bureau of Labor Statistics
As you can see, since 1990, the vast majority of new jobs -- 65% --  were created by big business.  Before you decide this is some right wing propaganda, the above chart was put together by Jared Bernstein; a former economist for the Obama Administration and economic adviser to Joe Biden.

Besides creating a lot of jobs, large businesses pay well.  On average, those firms pay their employees 50% more than those employees working at small companies.  So, obviously, if we want to give America a raise -- as President Obama has said in the past -- our focus should be on helping big businesses grow jobs. 

Then, there's health insurance.

What this collection of charts shows is that -- 3 years before the ObamaCare employer mandate went into effect -- nearly 100% of large businesses offered their employees health insurance; even though the author of these charts considers businesses with 200+ employees a large business rather than the accepted standard of 500+ employees.   But, even so, it shows that large businesses -- besides paying better -- also provide greater benefits; this also includes retirement programs.  While most large companies offer profit sharing, pensions, or matching contribution 401K plans, only 24% of small businesses offer similar retirement plans.  Most workers at smaller firms must either rely on Social Security or their own savings after retirement.  Also, if they do offer a 401k, the value of it is most likely much smaller smaller employers simply cannot afford matching dollar programs like those offered by large organizations.  This is one of the primary reasons why 9% of retirees in this country are in poverty.

Last year, the Bureau of Labor Statistics reported that the typical American family lost $800 in income.  This tells me that we are creating too many small businesses and do not have enough expansion of existing big businesses which typically create more jobs with higher pay and better benefit programs.  We need to encourage the growth of large companies in this country by allowing them to bring back already-taxed overseas profits without having to be taxed a second time at the highest corporate tax rate in the industrialized world.  To that point, we need to lower the corporate tax rate to be competitive with other countries.  The last thing we need is Hillary Clinton and Bernie Sanders promising to further retard large business growth through more regulation.  We've had enough of that from Obama; resulting in overall lower pay for the middle class.  We certainly don't need Hillary's misguided pledge to be the "Small Business President".


On big business, Clinton moves to the left of Sanders:

Jared Bernstein: Getting Straight on Small Business Job Creation: Firms vs. Establishments:

President Obama: It's Time to Give America a Raise:

Big firms pay 50 percent higher wages than small businesses, study shows:

Employer-Sponsored Health Insurance - 3 Questions All Small Businesses Should Ask:

Working for a Small Business? Your 401(k) Is Probably Small, Too:

Why you may retire in poverty:

Typical American Family Earned $53,657 Last Year:

Obama’s 3 Strikes Against Big Business:

Small Business | Issues | Hillary for America - Hillary Clinton: 


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