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Policy Matters: Doing Your Homework
a weekly column
by Dawn Rivers Baker
Imagine for a moment that you have an inflamed appendix.
As medical emergencies go, this one is fairly routine, right? It's not the sort of thing that ought to inspire you to insist on dictating your will before you leave for the hospital, is it?
But what if you found that the individual peering at you over the top of the surgical mask was not the calm and competent physician you were expecting. What if you found yourself looking into the eyes of Bob, instead.
Bob is a really nice guy and a top notch veterinarian. He did a splendid job neutering your cat just last year.
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This week's news briefs
Smaller Lenders Stand Ready But Need Help
Lawmakers at a House subcommittee hearing last week seem to have uncovered the real problem with the SBA loan guaranteed program, which has seen an 18% decline in loan volume so far this fiscal year. First, a handful of large banks that happened to be hip-deep in the sub-prime mortgage mess were making 60% of the loans. They have had to pull back and retrench. And community banks and federal credit unions, which steered clear of the mortgage market fiasco and have no liquidity problems, can't step into the breach for a variety of reasons including steep lender and borrower fees, caps on lending by credit unions, and dense SBA loan procedures that defeat the smaller banks. Pending legislation can fix much of this, if Congress will get its collective act in gear — preferably in time to produce some stimulative effect in the current economic downturn.
Auto-IRA Plan Bad News for Micro Employers
Here's a question for you microbusiness employers out there: what would you think of a plan proposed in Congress that would require you to set up a payroll direct deposit into an IRA for as many of your employees as wanted it? Of course, we want to encourage people to save for retirement but, as the National Association for the Self-Employed points out, we should try to do it without burying microbusinesses under paperwork. According to their latest member poll, a whopping 77% of micro employers handle payroll chores themselves, by hand. And, among microbusiness employers that offer retirement plans, about half are administered by the business owners, across all plan types. It's probable that the lawmakers in question didn't know all that, of course, but that only makes it just a bit scary to think how little they know or understand of how microbusinesses operate.
Study Explores Women Entrepreneurs and Human Capital
Last week, the SBA Office of Advocacy released the results of a new study on women entrepreneurs and how they stack up against their wage and salary counterparts in several measures of general and specific human capital. Basically, the study found that self-employed women are better educated, have more managerial experience, have more life experience (which is a euphemistic way of saying they tend to be older), and are more likely to have experience in non-traditional industry sectors. When the researchers compared self-employed women to self-employed men, they found that women had less managerial experience, worked fewer hours, made less money and were more likely to report that their firms were not their household's primary source of income. All interesting in light of another piece of research, the Kauffman Entrepreneurial Index for 2007, which found that entrepreneurship rates among women declined last year while the rate for men increased significantly.
If you found any of these news briefs intriguing and you want to know more, visit the MEJ Article library! You can purchase and immediately download any of these articles, or pick up articles from the MicroEnterprise Journal archives. Only $2.50 each! Visit the MEJ Article Library today!
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