Last week, Jay Lunt, Owner and President of Folkers Windows in Pensacola, Florida, showed local business owners and media around his business, which has been open for 40 years. Jay hopes that his business tour will highlight the challenges posed to small businesses by complicated and costly regulations. In fact, Jay told attending reporters that complying with the growing number of federal regulations is the biggest obstacle his company faces – not competition from other firms.
One of the problems with new regulations is the compliance cost– a cost that is passed on the customers. Jay is forced to increase the costs of his services and many customers are not willing to pay the higher costs. This reduces the amount of customers he has, reducing his bottom line. With the hit his company took from the housing market crash, federal regulations are harming Folkers Windows’ ability to operate, invest, and hire.
In fact, according to Jay, any sort of reduction in government regulation would allow him to hire three new employees to operate machinery within a matter of days. With staggeringly high unemployment, we need regulatory reform that allows small businesses like Jay’s to hire more people. Small businesses employ 60 percent of the private sector workforce and historically create two-thirds of net new jobs each year.
Jay is not alone in his sense of disappointment in the federal government’s over-regulation. According to a recent Gallup poll, 63 percent of voters believed that government regulations over the past 5 years have done more to hurt than help small businesses and 75 percent thought the government should focus on creating jobs instead of issuing new rules and regulations. With the ever growing list of new regulations – around 4,200 new regulations are pending in Washington – small business are forced to divert more resources than ever on regulatory compliance, at the cost of potential growth, expansion, and hiring.
Like most small business owners, Jay understands the importance of reforming our current regulatory system to create a healthier business environment. If regulators would work with small business owners to create fair and efficient rules, both sides might be able to achieve their goals. In order to restore balance to the rulemaking process, commonsense reforms need to be enacted, such as giving small businesses a greater voice in the process, standardizing methods of evaluation across agencies, and requiring government agencies to provide compliance assistance to small companies.
Small business owners like Jay need sensible reforms to the regulatory process that will allow small businesses and the American economy to grow and succeed.