Small businesses’ reluctance to hire has two, mutually reinforcing sides. On one side, technology is reducing the jobs that small businesses need other people to do. Artificial intelligence can help with a wide variety of knowledge- and information-based tasks, and automation can move things around and modify them with increasing facility.
At the same time, growing socialism and government interference in people’s occupational relationships make employees expensive both in cost and in risk. Even where business owners think it would be worth hiring employees in the current atmosphere, they can’t trust that the current atmosphere will last. Any given year, with minimal warning, wages and benefits could be mandated to increase.
There are two essential perspectives for understanding and responding to these changes:
1. We can increase the complexity of our attempts to manage change, sliding down the spiral of increasing requirements for businesses and increasing generosity of taxpayer-funded paternalism, or
2. We can see all people as their own employers, responsible for themselves, whether they are technically taxed as W-2 employees or 1099 contractors, using AI and automation to enhance themselves rather than being replaced by them.
Only one of these is genuinely humane, and it's the only one that has a chance of working.