I don’t usually delve into politics on this blog, but when the actions of the government begin to affect the economy and in particular small businesses, I’ll break my rule.
I was a bit shocked to learn recently that Congress continues to get paid while government workers remain unpaid due to the shutdown. Some of these workers must continue to work because their jobs are essential to our safety and security.
In 2018, the salary for all U.S. Congress members except those in leadership positions was $174,000. The Speaker of the House of Representatives receives a salary of $223,500, while all other leadership positions pay $193,400. The average net worth of a member of the 115th Congress is 5x that of the average person that they were elected to represent. Four dozen are amongst the richest 1% of Americans.
During the time of the Internet Bubble Burst and the Financial Crisis, whenever I was sitting on the board of a company that was experiencing financial difficulties, which was most, the first to take a pay cut were the leaders. I can’t imagine any board member allowing a salary freeze, a salary cut, or a layoff without the leaders of the company taking some of the pain themselves. It is also important to note that few, if any, of these leaders were wealthy people at the time. Sure the media and politicians alike enjoy condemning the few breakout success stories who become millionaires or billionaires, but they never mention the risks involved in pursuing breakthrough technologies where around 25% of the businesses persist after year one and, depending upon whose study one uses, about 5% actually achieve real success. Just what risks are Congressional leaders taking?
Given the average net worth of a member of Congress, how can any of them look any member of their staff in the eye and say, “I feel your pain”? Why do they continue to get paid when other government employees have to tap savings, or take out loans to feed their families? How can they justify junkets when those who support them can’t support themselves or their families? The shutdown is beginning to have a deleterious effect on the economy and small business in particular. Many of these businesses are already suffering from tariffs and the lack of H1B visas, which are wounds inflicted upon them by their elected officials. In the startup world leaders take the pain first. Only Nero would be proud of this bunch.