Comments like this give the impression that there’s an assumption that business owners are all just swimming in money and not one or two bad months away from bankruptcy. Most businesses do not survive more than 5 years for a reason.
Also as a principle, regulating said free markets for QoL improvements (e.g. min wage, HI, disability, comp, soc sec, etc.) affect all participants - both efficient and destined-to-die businesses alike. If you can't exist through playing by the rules that everyone has set, why are you still in business?
This assumes that such "more efficient organizations" can even exist. If they are possible, why aren't they already around? Are those "Businesses that cannot afford to retain talent and remain competitive" that you speak of somehow preventing them from existing?
In most markets where efficiency is not achievable, then businesses are not entitled to exist. This is why things such as tax subsidies and other forms of funding are used to bootstrap new markets (e.g. green energy) that have a net social gain.
When you start a business there’s an expectation that you’re probably not taking a paycheck from it for a few years while you try to attract customers to provide steady cash flow.
While doing this, you somehow have to find a way to hire people to help you grow.
If it doesn’t work out, the business owner loses everything most likely and will probably be on the hook for the space they were leasing.
Now if you survive and make it past all that, hopefully everything stabilizes and you’re able to run a successful business that can return more to you than you put in…but it’s hard. Very very hard.
This “should that business even exist” stuff comes from not having any idea how hard it really is and how much is really on the line or the ups and downs along the way (which are even harder when you’re trying to make payroll).
If it was easy, everybody would do it.
I think this is only true for a newfangled SF business.
Traditional business gets a bank loan, has a business plan, and pays salaries from the start (including to the owner).
Make no mistake, the only reason a company closes is because they run out of cash. Old-style businesses have been doing that forever. SV businesses do the same when that "next round" fails.
Which leads me to conject that a VC business is just a bootstrapped business, where VCs are the customer...
>> While doing this, you somehow have to find a way to hire people to help you grow.
Where is that expectation coming from? It's fine if it's a side business you're looking to bootstrap or something, or if you have enough seed funding (which can be in the form of your own savings if you're okay risking that) to be revenue negative for a time, but if you have enough funding or revenue to consider hiring people, the first person you should be hiring is yourself.
>> If it doesn’t work out, the business owner loses everything most likely and will probably be on the hook for the space they were leasing.
This is why you create a -business-. A legal entity separate from yourself. An LLC at the minimum. So that your personal liability is (wait for it) limited. If you're doing a sole proprietorship or something, where you'd be on the hook for everything, WTF are you doing hiring people and signing leases?
Creditors and lenders are not fools. They'll often require the owner of an LLC to personally sign for the note.
Owners get pais last, not first. Sure you make enough income to pay yourself first, then you hire. Time passes, there's a bad month or 3, employees still get paid, owners start accumulating loan accounts.
LLC's and other structures are designed to limit downside, but some creditors will end-run this with personal sureties. This is really common with leases, but also other forms of credit. Inexperienced business owners may not push back against these as hard as they should (you can push back, but most starting out don't know that they can...)[1]
Building a business from scratch is hard work, and most fail within 5 years because failing is really really easy, and success requires someone to do a lot of different tasks well, and almost always some "luck" [2] as well.
[1] most bootstrappers try once, and are thus inexperienced. The folk they are dealing with (landlords and suppliers) are very experienced. This imbalance leads to contracts that are very often one sided.
[2] the best luck is advice from an experienced bootstrapper, ideally for free. They can help you avoid the most common mistakes. Of course you'll ignore some of their advice because "experience doesn't work like that".
Reads like maximalist statement with zero clues about the subject.
However if you reject this ideal which is the western worlds baseline, then you really have to provide some info on what framework you are arguing from…
Yes some companies will optimize for profit - some already do that, amazon makes a killing while warehouse staff are low paid. Uber makes everyone a contractor specifically to avoid benefits and so on.
Other companies pay a living wage, and cost a "cost to company" for each employee. These may choose to pay the benefit as cash.
Where I live the tax benefit of health care applies to companies and individuals alike. Some companies have mandatory health cover, others have optional health cover, others have no health cover. Since there is no tax implication it's not hard for prospective employees to compare one with another.
Ultimately, some companies pay low wages, some pay high wages, that's somewhat tangential to health cover or not.
Speculating on what most employers would "most likely do" is, well, just speculation[1]
[1] large companies like amazon known for screwing employees? Yeah, I'm with you there - but I don't think most employers are like that.
The leadership at my employer talks big about how much they care about their employees, and indeed, the vacation and benefits are very good. Yet even in the face of record profits they gave me a 1.5% raise this year, despite the 8.5% inflation. I'll believe that they'd pass benefits package savings onto me when I see it.