04-24-2021, 01:49 AM
(04-23-2021, 07:15 PM)sclady Wrote: Would a higher minimum wage increase costs and discourage people from starting businesses?
Most people who start small businesses do not start with mass hiring. Wage payments of any kind are huge costs to a struggling entity.
Do you know what really gets people to start new businesses?
Hard times.
That's right. Small businesses are low-yield, long-term, illiquid investments. When the choice is a low and uncertain return on investment, long hours, and no leisure -- or on the other side, no income at all -- people start businesses.
The Great Depression was one of the peak times for the formation of small businesses. Think of what was right for starting a business: property rents were cheap; a competent and reliable workforce was available cheaply due to mass unemployment; inventory was available for fire-sale prices without the smell of smoke; many previously-existing entities had vanished as business failures. If you had to hire someone not from within your family, you had an employee who knew enough to draw his kinship network in as customers. Most importantly, there was little easy money to make. But earning a little the hard way was better than being unemployed.
People who start small businesses are often people from marginal communities within a society.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.