Election 2020 Survival Guide for Entrepreneurs: Understanding Biden
With Biden taking office in January 2021, changes are coming to the white house that will ultimately affect how small businesses are able to conduct business.
Author: Frank Wazeter, Nov. 30, 2020
During the particularly volatile 2020 Presidential election, influenced by COVID, the economy and the love-him or totally-despise-him polarization of Donald Trump, Biden offers calmness, change and a different approach.
As always, with these kinds of political posts, we are taking a strictly non-partisan approach, and simply giving context of political actions to their impact on business, and at times, historical examples of past events to make current times “make sense.”
If you’re looking for hyperbole and extreme statements in support of either side of the aisle, you’re in the wrong place.
This is part 2 in a series covering the aftermath of the 2020 Presidential Election that seeks to bring understanding to what may happen in 2021 and beyond and how to prep for them as a small business. You can read part 1 here, which covers a lot of the crazy claims made during the election so you can understand truth and reason.
Get To Know Biden So You Know What To Expect For Your Small Business
When you’re looking at a President, it’s important to know who they are to determine what they’ll actually do, rather than looking simply at what they’re doing in front of crowds, on twitter and in the media. For instance, Trump is one of the loudest polarizing characters when it comes to the internet and media. He speaks over opponents in debates, uses intimidation tactics and throws his weight around. In private, however, the man is a bit different. Numerous accounts tell of a man who spends more time listening and weighing the input of others than speaking himself.
No matter which way you slice it, Biden is significantly less controversial than Trump. He’s also significantly less polarizing than Hillary Clinton was and Bernie Sanders has been. Watch a Biden presentation of any kind for more than 20 seconds and you instantly get a ‘grandfather’ type feel from the guy, in part from his age (78) and in combination with the way he talks.
Even if you hate Biden and you make fun of his sentence forgetfulness habits, you can’t help but admit that he has much more of a calming personality than any candidate in recent memory.
Obama’s elections felt historic, at first it was the first black President in history being elected during the backdrop of the 2008 Real Estate crash. There was an immediate call for action and immediate need of drastic measures to save the US economy and bail out banks who’d gotten too far deep in over their heads.
It was also the first campaign that was largely influenced by social media and twitter, specifically. A large reason for McCain losing to Obama was Obama embracing tech and twitter, and McCain “looking into” that internet thing.
Obama’s re-election campaign was heated among a slow economic recovery and outright hatred for the Affordable Care Act (Obamacare) and it’s mandate requiring everyone to enroll.
Trump vs. Clinton in 2016 was fueled by more polarization than anyone in recent memory can attest to, made worse by the huge impact of social media, twitter and facebook in influencing political opinions of people.
Trump’s messaging often seemed to reflect his favorite platform twitter (which focuses on short concise messages), statements like ‘Make America Great Again,’ ‘Lock Her Up’ and ‘Build a Wall’ that you can still remember four years later. Even if you hate Trump, you can’t deny a certain level of marketing savviness here. I’d challenge you to remember key statements of Clinton without having to look them up, and the fact that you can’t immediately remember them is a fundamental contributor to her losing.
Trump continued his Presidency like he was still on the campaign trail, employing many of the tactics he used while campaigning to push his particular agendas and policies through. This led to even more polarization and during the entirety of Trump’s Presidency Democrats were convinced that “democracy was at threat of being destroyed” because of this man.
Whenever statements like ‘democracy is in jeopardy’ are being thrown around, it’s always a bit melodramatic, reminding you of a kid throwing a temper tantrum.
Temper tantrum is a great way to describe the past 4 years for the majority of America.
Remove the COVID factor and Biden feels ‘boring.’
If you remove the backdrop of COVID from the election, remove political affiliations from your opinion and Biden’s...well boring. He’s not particularly inspiring, or the inspirational leader type. You wouldn’t expect huge speeches that rouse you to action or inspire you and the direction of America. His best attribute is probably that he’s a calming presence if anything else.
He doesn’t have particularly extreme views and he hasn’t had a particularly remarkably unique political career. He’s mostly made decisions that align with the mainstream. In fact, the biggest criticism against Biden was a lack of originality in his resume and actions as senator. He’s so unremarkable in that sense that the extreme opinion against him believes he’s just a puppet.
Someone so unremarkably average as a politician can’t possibly be the real President, right?
At least, not when we’ve had such dynamic figures in the Presidency the past 12 years. This just seems...normal.
And in that normalcy, there’s a certain power. America probably needs to ‘Netflix and Chill’ politically for a while and turn the temperature down, and if we’re being honest, Biden’s got as good a track record as anyone in setting the tone for being reasonable.
Understanding Biden’s Political Views
Biden doesn’t have particularly strong long standing opinions about any topic except labor. Coming from Scranton, PA, Biden is deeply influenced by a strong work ethic and blue collar and middle class type of industrial work ethic. He’s very passionate about raising the federal minimum wage and he’d likely be a union supporter if they were prevalent on a national scale.
Biden has believed deeply in the ‘honor’ of a good day's work and that pay should be appropriate for it. If you were to ask him one on one what the biggest thing he’d want to get accomplished is, it’s going to be labor related.
You can expect a lot of campaigning against big corporations and more support of labor groups to go against big corporations and get better treatment. He simply isn’t the candidate that’s going to trust corporations to make the best labor related decisions without being forced into them.
The issue with that is how it trickles to small and medium businesses. Blanket legislation like creating a higher federal minimum wage is simply going to result in less employment from small and medium businesses in many areas or a reduction of hours.
For skill intensive work, the impact probably won’t be as dramatic, and in theory raising the minimum wage like that should inflate the amount of money in the economy being spent, therefore leading to higher prices being charged for goods and services to support the higher minimum wage (which calls into question the effectiveness of the minimum wage to begin with).
As a small business owner myself, the likely shift will be to simply hire more contract work before fully committing to employees and many small businesses will follow that pattern, as it’s a very common strategy from tax planners.
For highly skilled labor, the impact will be minimal, they’re already going to get the pay levels they are, it’s entry level positions that are going to suffer. As a result, you’re going to see an increase in ‘contract labor,’ reduced hours and increase in internships or other vehicles to get around it.
Economically de-incentivize an action, and businesses of all sizes are simply going to find a way around it. Forcing a national minimum wage doesn’t do much to help the majority when costs of living are so rampantly different across the nation. $15 an hour is going to be tough for rural Wyoming to afford while in downtown San Francisco or New York City, you still aren’t going to have a ‘living wage.’
Minimum wage needs to be a local issue, not a federal issue. I don’t agree that raising the minimum will put businesses out of business, I think they’ll just change their hiring practices and adapt to a different strategy with their financial, legal and tax advisors. All cases which hurt the employee more than the employer.
The Problem With Biden’s Labor Support Is It Hurts Freelancers and Contractors
For Biden’s labor laws to work (as in the example above where I cite specifically that the default small business strategy would be to hire more legitimate contract workers and freelancers rather than actual employees), he needs to cut off avenues for businesses to hire independent workers.
59 million Americans create their income through freelancing, and many service based businesses who do business in a B2B capacity (like ours), are heavily reliant on the model. It’s a simple concept: you, as a business owner, don’t have enough money to hire me and my expertise, Frank for a year.
But you can hire me and my company on a contract where you get the benefit of our expertise, without the full time liability of making sure Frank’s living the life Frank wants or he goes to some other competitor.
That’s the advantage of freelance, service and for-hire contract based work. You get access to a higher level of skill for a price that isn’t going to break the bank to keep that higher level skill on board.
Biden publicly supports California’s AB-5 union backed law, which was the huge push to classify rideshare workers as employees, not contractors. While on the surface this may ‘make sense’ to a casual observer, Uber and Lyft contractors are legally contractors and not anything remotely close to employees.
The big problem with AB-5 for freelancers is the “B” part, which states that to be considered a contractor, workers must be performing work outside the ‘usual course’ of business for the company that’s hiring, which makes it very difficult for many freelancers to work for clients within their own industry, which is typically a major source of revenue for freelancers.
There’s nothing immediate in the works for Biden, as he’s a bit preoccupied with COVID, but knowing the President’s singular passion politically, and knowing his support of like programs, we could very well see support, endorsement and promotion of similar laws on a national level.
Key Takeaway: Don’t Panic yet employers, but expect a shake up in the way employment is handled in the next 4 years.
Conclusion - Breaking down Biden's Core Politics
Biden’s biggest ‘knock’ against him is that he’s your average political figure. He’s not ‘exciting’ or majorly controversial. That’s probably a good thing for America to kind of ‘cool off’ for the next four years as we head further into COVID and move past the polarizing figures of the 2010’s and into the new decade.
Supporting labor has been Biden’s one unique passion in his political life, and you can expect a lot of change around labor and how compensation works as it’s core to his philosophy of politics and life. It’s truly the area he’s passionate about and you can’t expect a guy who's just gotten the Presidency not to work towards his passions. Everything else on Biden’s agenda is up for debate and negotiation, and Biden typically goes with the flow of what national opinion supports for other issues, but labor is his big sticking point, so expect for that area to be ‘uniquely Biden.’
If you enjoyed this article, check out part 1 if you haven't yet.