A Hard Decisionbymadengineer3©
Copyright 2013 by madengineer3
There is no sex in this story.
I thought I was faced with an unsolvable problem. I spent the better part of a year coming to a final decision. That decision was unpopular with my family and friends. However, it was the only way I could express my anger in a legal manner. Let me tell you about it.
My name is Jeff North. Over the last forty-five years I have built up a small company, North Enterprises. I started out with an investment of only three thousand dollars (all I had and could borrow at that time). The first five years involved eighty hour weeks, no vacations and fortunately no severe sicknesses. My goal was not just to make money but to provide a much needed service. My company specialized in repairing older homes owned by less than rich senior or disabled citizens. My most important key people included a licensed electrician, plumber, a lawyer, and HVAC (heating, ventilating, air conditioning) specialist. They were the highest paid people on the payroll. They also had a burning desire to help people.
We, as a company, operated in a very strange way. We obtained our prospective customer list from local congregations. We had input from churches, synagogues, mosques, and an inside person with our county social services group. When possible we obtained much of our working materials from large construction firms who had left over supplies from industrial jobs. Used, but safe wire, plumbing fittings, excess siding, suspended ceiling supports, etc. You get the picture. If you are going to be able to keep a business afloat you need to minimize the overhead and material costs if you are going to control the prices you need to charge. (This is something that government officials seem to find as hard to understand as quantum mechanics is for a first grader.) Because of the way we operate, and what we do, our company is classed as a non-profit organization. Our goal is to help people, not make piles of money.
For the first thirty years our company had done well for itself. Our people were paid a fair wage and given very good benefits. Our retirement program was a 401k plan. Our health care was better than average, we had a good vacation plan, and we supported employee educational opportunities. I did this not because I had to but because my own moral code told me that this was the only way to run a business. (One of the old jokes around was that when your own way doesn't work read the instruction manual. My manual happens to be based upon the teachings of the Bible.)
Anyway ten years, or so, ago the problems started. First there was the push, by the NLRB (national labor relations board) to allow a small subset of employees to form an union even if the majority of the employees didn't want one. Our compensation package and working conditions were better than those of almost all of the local union workers. However, the painters, a group of twelve employees (out of sixty-three employees) insisted on forming a union. Since the NLRB had become a lap dog for organized labor this led to legal battles that were eating up much of our reserve cash.
Then there were the new health care mandates. Our company is self insured up to a certain point. After that we have a catastrophic medical policy that takes over. We cover the costs of generic drugs for our employees and have a two hundred dollar a year fund for each employee for over the counter drug needs. The new health care mandates for birth control go against the religious convictions of a majority of our workers. Beside that, they can buy any birth control devices (except surgical abortions) that they need using the over the counter fund. However, the small union group (remember those twelve painters?) filed suit against us for not providing the extra expense that they wanted.
I, personally, am a member of our local "tea party". I have many employees who are liberals and I don't have a "litmus test" for hiring people. After all, our goal is to help the disadvantaged with their needs without all the government's red tape and idiotic rules. It was quite a shock when I was informed, by our company lawyer, that we had lost our IRS tax exempt status. Not only had we lost it, they had decided to retroactively remove it so that I would have to pay back taxes from the beginning of the current fiscal year.
This situation led me to the crisis that I have faced this last year. With the costs of doing business, including insurance, and now the taxes; I would no longer have enough money to pay our people what they deserved. On top of that I would end up not getting any compensation myself. Now, in case you are wondering, I pay myself less than our licensed plumber, electrician, HVAC man, and lawyer.
What was I to do? I had talked things over with my friends and one old friend told me to re-read a book that we both had enjoyed while we were in college together. The book was Ayn Rand's "Atlas Shrugged". It is an excellent book. The title comes from an interesting question. If Atlas, who had the whole world on his shoulders, realized that the weight was going to make him crumble and die; why not simply shrug and let the world fall and take care of itself. It is a basic question of self preservation.
I spent a week re-reading the book and came to the same conclusion that John Galt and Dagny Taggart had reached. The system that I was supporting was no longer worth the cost I was paying.
It was with a heavy heart that I told our workers that we would be liquidating the company as soon as we finished the outstanding jobs that we had agreed to do. As it turned out there was only one painting job in the pipeline. I will let you guess the identity of the first people laid off. Over the next four months we worked our way through the remaining jobs.
The jobs were now all done. Almost all of the tools needed by our workers were owned by themselves. The company had purchased the expendables that they needed (sandpaper, saw blades, router bits, etc) we also had provided zero interest loans for workers who had to replace a tool that finally wore out (electric drills, circular saws, reciprocating saws, etc). The only permanent equipment were the work trucks. Each of the core construction employees was sold their work truck for a dollar each, after all I didn't want to have to pay extra taxes on money obtained by selling them.
Over the forty-five years that I had the company I had paid myself an average of fifty thousand dollars a year. I had saved about fifteen thousand dollars a year in a precious metals based Roth IRA. I had accumulate a bit over seven hundred thousand dollars in savings and about a three hundred thousand dollars in my house and work building.
After watching our government at work and especially watching the ever leftward path that it seemed to be taking, we decided to move abroad. We now live outside the United States in a small country that has almost no laws at all regarding private ownership of guns, etc. Also, if you open a business that employs poorer workers, and pay them fairly you get a reduction in your yearly taxes.
What was the result of the draconian federal government's rules? The bottom line is that over sixty jobs, the taxes paid by those workers, the increase in the unemployment numbers, the increases in social services costs, the costs for social services helping the people that we used to help, and some of the glue that held our community together have been lost.
When the load becomes too large, it is time for Atlas to shrug.