Perhaps nothing reflects the descent of the Yeomanry better than the fading role of the ten million small businesses with under 20 employees, which currently employ upwards of forty million Americans. Long a key source of new jobs, small business startups have declined as a portion of all business growth from 50 percent in the early 1980s to 35 percent in 2010. Indeed, a 2014 Brookings report revealed that small business “dynamism,” measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century.
This decline in entrepreneurial activity marks a historic turnaround. In 1977, Small Business Administration figures show, Americans started 563,325 businesses with employees. In 2009, they launched barely 400,000 business startups, long a key source of new jobs, which have declined as a portion of all businesses from 50 percent in the early 1980s to 35 percent in 2010.
There are many explanations for this decline, including the impact of offshoring, globalization, and technology. But in part it reflects the impact of the ever more powerful Clerical regime, whose expansive regulatory power undermines small firms. Indeed, according to a 2010 report by the Small Business Administration, federal regulations cost firms with less than 20 employees over $10,000 each year per employee, while bigger firms paid roughly $7,500 per employee. The biggest hit to small business comes in the form of environmental regulations, which cost 364 percent more per employee for small firms than for large ones. Small companies spend $4,101 per employee, compared to $1,294 at medium- sized companies (20 to 499 employees) and $883 at the largest companies, to meet these requirements. 20 The nature of federal policy in regard to finance further worsened the situation for the small- scale entrepreneur. The large “too big to fail” banks received huge bailouts, yet they have remained reluctant to loan to small business. The rapid decline of community banks, for example, down by half since 1990, particularly hurts small businesspeople who have depended historically on loans from these institutions.
From The New Class Conflict [1] by Joel Kotkin