U.S. entrepreneurs rank behind Azerbaijan | Don Brunell

With the ongoing debate about income inequality and increasing the minimum wage, it’s important to revisit the basics. In order to demand a wage increase, you must first have a job. In order to have a job, someone must create that job. In order to create that job, someone must start a business

With the ongoing debate about income inequality and increasing the minimum wage, it’s important to revisit the basics. In order to demand a wage increase, you must first have a job. In order to have a job, someone must create that job. In order to create that job, someone must start a business. But now, when our economy desperately needs more – and better – jobs, a major study shows that starting a business in the U.S. is more difficult than ever. The study by the World Bank and the International Finance Corp. ranked 189 nations on how easy it is to start a new business. They considered the number of procedures required, the time necessary to complete the paperwork, and the expense involved. The U.S. ranked 20th, down from 11th last year. Our showing was well behind countries like Rwanda, Belarus and Azerbaijan. The good news? We narrowly beat out Uzbekistan. New Zealand is the best place in the world for entrepreneurs, according to the report. Starting a business there requires “one procedure, half a day, (and) less than 1 percent of income per capita and no paid-in minimum capital,” the study noted. New Zealand was followed by Canada, Singapore, Australia and Hong Kong in the top five. By contrast, the U.S. requires, on average, six procedures, takes five days and requires 1.5 percent of the company’s income per capita. The study also listed the countries that made it easier to start a business in 2012/13. The U.S. was not on that list. Despite our slide in this global ranking, the U.S. couldn’t hold a candle to Surinam, where it takes almost 7 months to start a business. Why is this important? Because most jobs are created by small businesses, and research shows that economic growth is driven by the entry of new businesses rather than by the growth of existing firms. Chances are we wouldn’t be debating income inequality or the minimum wage if we had a robust, expanding economy that was creating tens of millions of new jobs. However, an annual avalanche of federal and state regulations is making it increasingly difficult to run a business. Bernie Marcus, co-founder of Home Depot, says he never would have been able to start the company in today’s regulatory environment. “I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today.” How does Washington rank? It depends on whom you ask. Chief Executive magazine ranked Washington 36th out of the 50 states in 2013, up one from the previous year. While we get good marks for quality of life and workforce, we take a hit when it comes to taxes and regulations. Forbes magazine ranks Washington 9th overall, but places us 27th in business costs and 32nd in regulatory environment. The bottom line is this: While news coverage tends to focus on “big business”, most jobs are created by small business. And launching a new company is risky in the best of times. In many ways, it’s like skydiving: You prepare the best you can, but in the end, it is a leap of faith requiring enormous courage and personal risk. Many entrepreneurs mortgage their homes and empty their savings in order to start a business. In this economy, they lie awake at night, worrying how to make payroll for the employees who depend on them. Elected officials in Washington D.C. and Olympia – most of whom have never run a business – should keep that in mind when they consider imposing new regulations and taxes that make it harder for employers to sustain and create jobs.

Don Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at TheBrunells@msn.com.

More in Business

Seattle’s misstep highlights need for new approach

Last week, Seattle’s City Council did an “about face” revoking the onerous… Continue reading

Washington’s expensive culvert court case

Too much money is spent in court where it should go to increasing the salmon population

Lt. Dan needs lots of helping hands

Gary Sinise formed the “Lt. Dan Band” in early 2004 and they began entertaining troops serving at home and abroad. Sinise often raised the money to pay the band and fund its travel.

New Enumclaw wine bar aims for broad audience

Bordeaux Wine Bar is scheduled to be open Wednesdays through Sundays.

Streamlining regulations makes more housing affordable

There were over 21,000 people homeless in Washington State last year.

New approaches needed to fight super wildfires | Don Brunell

Last year, wildfires nationwide consumed 12,550 square miles, an area larger than Maryland.

Skilled trade jobs go unfilled in our robust economy

Known as blue collar jobs, they routinely pay $45,000 to $65,000 a year or more.

Streamlining regulations helps Americans compete

The cost of regulations is a key American competitiveness issue. It is a major reason our companies re-locate to other countries and our manufacturers and farmers have difficulties competing internationally.

Water pressure mounting in West as population spikes

What is happening in California with water allocation disputes is a harbinger of what is to come in our state as well.

Railroads implementing positive track

While the investigation continues into the deadly AMTRAK derailment near Dupont, the clock continues to tick on the implementation of Positive Track Control (PTC). The deadline is Dec. 31, 2018.

Keep the holiday spirit all year long | Don Brunell

During the holidays, our thoughts naturally turn to giving — not just giving gifts, but donating our time and money to charities, disasters and community programs.

Finding balance in occupational licensing

Recently, the Institute for Justice (Institute) determined state licensing barriers for lower-income workers and aspiring entrepreneurs not only hurts people trying to establish themselves in a profession, but annually drives consumer prices up by $203 billion.