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The Morning After

Owner-operators could become an endangered species if the President gets his way

“The reason we’ve got an unparalleled standard of living in the history of the world is because we’ve got a free market that is dynamic and entrepreneurial, and that free market has to be nurtured and cultivated.”

Those are President Obama’s words, spoken from the White House during the post-election press conference on November 3. The President was responding to a reporter’s question about the state of the economy. The reporter asked, in part, “Do you think you need to hit the reset button with business?”

I was in the car driving to the airport listening the press conference live on NPR, and when those words floated out of the speakers, I thought immediately of the threat posed by the President and his administration — with help from legions of liberal apparatchiks in various agencies across the country — to the fate of owner-operators. Since his days as Senator Obama back in Illinois, our President has worked to undermine the entrepreneurial spirit he now says is responsible for our unparalleled standard of living.

In case we forget, as a Senator he was strongly involved with independent contractor reform initiatives, and he co-sponsored the Employee Misclassification Prevention Act in the Senate, along with Senators John Kerry and the late Edward Kennedy. When President Obama took office, he indicated that the misclassification of workers would be a priority issue for his administration, and he included $25 million in his FY 2011 budget proposal to target the misclassification of employees as independent contractors.

Obama hadn’t been in office very long when he appointed M. Patricia Smith as the Department of Labor’s chief solicitor. While Smith was New York State’s Commissioner of Labor, she oversaw that state’s Misclassified Workers Task Force. Smith has a history of cracking down on recalcitrant employers. She served as New York State’s Commissioner of Labor under former Governors Eliot Spitzer and David Paterson, and she created a program called the New York Wage and Hour Watch in which community organizations, immigrant groups, and labor unions served as the department’s eyes and ears to report violations.

Perhaps I’m not giving the President a fair shake here, but those actions don’t strike me as particularly friendly to business.

Now, I’ll be the first to acknowledge that employee misclassification goes on. I’m sure there are workers in the thousands forced to declare themselves independent contractors so employers can minimize their tax burden and other liabilities. I don’t think you’d find many owner-operators in those ranks, and that’s why I’m deeply concerned with the potential impact of the Obama presidency on the future of owner-operators.

They exemplify the entrepreneurial spirit in trucking. Many start as one-truck operators and go on to build small — and some very large — fleets. They are owner-operators because they want to be. But if the president and his Democratic colleagues succeed with their broad-based bills aimed at preventing employee misclassification, they will ruin a good small business opportunity, and make it very difficult for carriers to do business with their time-honored entrepreneurial partners.

Do I honestly think a few words in a morning-after press conference are indicative of a change in policy direction? No, but the words were encouraging. The President wound up his answer to the reporter with the following statement. Again, probably just fence-mending platitudes, but at least he’s on the record.

“I think as we move forward, sitting down and talking to businesses, figuring out what exactly would help you make more investments that could create more jobs here in the United States, and listening hard to them — in a context where maybe Democrats and Republicans are together so we’re receiving the same message at the same time — and then acting on that agenda could make a big difference.”

Here’s hoping.

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Business: Related News

11/12/2010 – The Morning After

“The reason we’ve got an unparalleled standard of living in the history of the world is because we’ve got a free market that is dynamic and entrepreneurial, and that free market has to be nurtured and cultivated.”…

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Tax, Accounting, Consulting - Emil Estafanous, CPA, CFF, CGMA