Like the heads of so many businesses, I hope that our new U.S. president can somehow turn around this economic disaster we are facing. But because of the policies he is advancing -- taxes for families earning $250,000 a year (that's families, not individuals), potential health care mandates, and who knows what else, I, like CEOs of most small-to-medium sized businesses, must take preemptive measures.
Unlike most media companies, we are avoiding laying off employees. But we are having to cut their pay and benefits. After all, we will all be making less.
Many of my employees and contract workers supported Sen. Obama. I admired the fact that they wanted change. And I do believe that perhaps, in the end, his "spread the wealth" plan might just give folks enough extra cash to get them shopping and spending again.
The problem is that smaller businesses are not only suffering from getting paid late or not at all on what's owed us; many of them must also prepare in advance for the consequences of the likely Democratic tax plan.
What many don't realize is that most "bosses" of smaller companies aren't eating caviar and sipping champagne in the first place. And if they did in the past, it was probably due to increases in their own personal wealth related to the general increase in financial security that many Americans enjoyed in the latter part of the Clinton years and again in the first few years after the Bush tax cut.
Take the man and woman who founded a small- or medium-sized private business, and may have spent 18 hours a day to keep it afloat. These folks know they will be taking a bath in the coming years, thanks to a weakened economy, but also to the new concept of taxation that the Democrats clearly support. As a result, there's little room left to share the pain.
From my own viewpoint, I'd rather cut folks' salaries and benefits, as most of my contemporaries are being forced, at minimum, to do, than lay off people and add them to a growing massive heap of unemployed Americans. I recognize that many employees of smaller businesses bought houses that they really couldn't afford, partied on weekends at nice clubs and restaurants, bought cars that were nicer than they ever thought they could have, and charged a "better life" on credit cards they should not have used.Most of us who employ people don't want to contribute to anyone being homeless or without a job, so when we ask folks to think about that vacation they took, or the party they threw, or whether everyone in the family is working a paying job -- well, I think we are trying to get them to realize that a 20 or 30 percent cut in pay or benefits might be tough, but it's better than no job at all.
I believe all this doom and gloom will pass. I am bullish on America because I believe in the resourcefulness of our nation's entrepreneurs. In the end I believe companies such the one I head up -- because we are lean, fast, smart and cost-effective -- will grow and flourish.
But what the Democrats and the new president must explain to the American people is that you can't bail out the banks, insurance companies, the automakers, folks unable to pay their mortgages and so many other institutions without finding a source of revenue to pay for those bailouts. And that will include owners and managers of smaller corporations that might become large corporations in a few years -- after the initial pain and costs of the Democratic agenda is in place and America starts moving again.
If you own or run a small business, you might want to share this memo with your own employees; particularly those who enthusiastically supported the huge Democratic victory. They may well expect that "change" is coming immediately and that it will be in the form of financial reward. And that may be true. The president-elect is pushing for another stimulus package, so that folks might get another check from the government, like they did earlier this year.
But they will need to understand that it comes out of the wallet of the owner or manager of their company, and that means their take-home pay and other benefits will likely have to be reduced for some time to come.
I'm sure that's change they can live with. After all, they voted for it. Now we must share the pain.