Although we previously dealt with this topic in May 2017, it’s important enough to cover again. Government regulation (federal, state and local) is killing the American economy. Burdens on industry and businesses (there is a difference) often come from requirements for licenses and procedures of supervisory oversight.

Licensing costs over $203 billion nationwide to the economy. Common sense tells us that this is unnecessary.  Examples include (per The Wall Street Journal): 

  • To work in California as a door repairman, carpenter or landscaper requires 1,460 hours of supervised on-job training plus purchase of a $500 license.
  • Arizona harassed a student cosmetologist who gave free haircuts to homeless people without having a license to do so.
  • Several states and the Washington, D.C. government require six years of education with a final exam plus a $1,120-$1,485 license to be an interior designer. 

In 2015 the Federal Register grew by 81,611 pages over the prior year, publishing 3,378 regulations with 600 having direct impact on small businesses. These federal requirements cost nine times the stated cost of compliance; to this must be added state and local regulations and their costs. An unacknowledged factor is that compliance with EPA regulations actually costs fourfold more per employee for small compared to large businesses.

A survey in 2012 by the National Federation of Independent Business found that 72% of all business owners have serious problems with regulations, 25% found the extra paperwork the greatest compliance problem, and 22% cited actual compliance and the real complexity of it as the most expensive part of operational problems. The volume and complexity of all regulations was cited by 60% of businesses as the “costly headache”.

During the Obama presidency, 25,155 new regulations were issued, imposing a $727 billion cost on America’s economy and requiring 460 million hours of new paperwork. Current federal regulatory compliance costs are $1.88 trillion, or 11% of national GDP. Environmental regulations, tax compliance, occupational health and safety, and homeland security top the list of expenditures. 

And also realize that the number of small businesses is shrinking due to this overwhelming load, which does not account for existing state and local regulations. Experts summarize by saying that for every 10% increase in regulatory costs, the country experiences a 5-6% loss in businesses with fewer than 20 employees.

Is this burden, questionable in so many respects as needed or beneficial, worth it? For over 25 years, small businesses created approximately 64% of all new jobs in our country. But a practical remedy to this waste eludes the public. It is notable that the banking sector of the U.S. economy has a regulatory assessment process in place as required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 and implemented by the Federal Financial Institutions Examination Council. 

Two appropriate questions are: “What can you do about all this?” and “Are you going to do it?” The Small Business Administration (SBA) issued a public request for information (Docket No. SBA-2017-0005) Aug. 4, 2017. Remember that President Trump signed Executive Orders (#31771 and #31777) that addressed regulatory costs and relief of burdens, and this SBA request seeks relevant information. Questions and comments were solicited from the public covering items such as:

  • Are SBA regulations unnecessary or burdensome?
  • Which SBA regulations are outdated and/or should be repealed?
  • Cite regulations that are unnecessarily complicated.
  • What regulations need modification?

While the intent was for submission of comments by Oct. 16, 2017, the SBA must listen to an informed and cooperating public – you, the affected party. You are urged to contact Holly Turner, SBA, at 202-205-6335 or IGA@sba.gov.

Why not get involved and give it a try? If you get a response that says you are too late or that your concern should be addressed by another agency, call your Congressman and both Senators. It is time for citizens to hold government accountable for how societal behavior is coerced.