Opinion: New burdens on entrepreneurs hurts minority economic advancement
By Wayne Winegarden and Kerry Jackson
Florida’s nickname is the Sunshine State, but it could be the Entrepreneur State. In 2019, prior to the pandemic, no state had a higher rate of entrepreneurs starting new businesses.
But that’s only part of the story. Only California (1.6 million) and Texas (1.1 million) have more minority-owned small businesses than Florida (926,000).
Minority entrepreneurship is vital to our economic recovery from the COVID-19 pandemic. It is also key to empowering people economically, lifting those at the bottom out of poverty, and improving social mobility. According to the Hamilton Project, “entrepreneurship could play a prominent role in reducing the wealth gap between whites and African Americans,” and “may help close the gender wealth gap as well.”
Without the right policy mix, entrepreneurs struggle to grow their businesses, work their way up the economic ladder and create jobs for those out of work.
Florida is fortunate to have an economic climate that allows innovators and those willing to invest in sweat-equity to flourish.
Some states, however, handcuff their risk-takers with policies hostile to entrepreneurship. High taxes, heavy regulation, licensing, permits, and additional government-imposed costs make states such as California difficult places to start and build news businesses.
Unfortunately, the Biden administration is advancing some of these poor ideas at the national level.
While the Build Back Better plan looks doomed to fail, the Administration continues to add crushing regulatory burdens on businesses, is accommodating a destructive surge in inflation, and has engineered an unaffordable surge in spending that, one way or another, would impose a huge tax burden on the economy.
These policies will hurt American job creators.
The administration is also promoting the PRO Act, a rewriting of labor law that would hurt gig workers. The bill is similar to California’s controversial Assembly Bill 5, which in essence outlaws independent contract work, with some politically decided exceptions. It reclassified freelancers in a way that makes it nearly impossible for them to work as independent contractors.
AB 5 has proven to be anti-worker, anti-job, anti-entrepreneur, and anti-freedom. Job losses and forgone opportunities began to stack up even before the bill became law.
The PRO Act would do similar damage in Florida and nationally if enacted at the federal level.
The gig economy is the future of entrepreneurship and policymakers in Florida and Washington, D.C., must remember that it is key to future job creation and economic growth. It empowers gig workers free to engage in the opportunities of their choosing and helps small business owners more easily find workers who have the skill sets they need.
Most importantly, the freedom brought about by the gig economy provides the foundation that inspires the creativity that will fuel the next big American innovation.
At an uncertain time economically, adopting policies that make it difficult to start businesses in Florida and elsewhere is not the best of plans. Washington would do far better by examining the policies of the Sunshine State that have made it an entrepreneurial haven and put them into practice nationwide.
Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute
Kerry Jackson is a fellow with PRI’s Center for California Reform