Last week, in a White House news conference, President Obama gave his candid assessment about the state of the economy: “The private sector is doing just fine,” he said. Those six words characterize what seems to be a growing disconnect between policies drafted in Washington and what hardworking Americans are really feeling. Talk with small businesses owners across the country or look at recent economic indicators and you’ll get a much different evaluation of how they are doing. Small businesses particularly continue to struggle to keep up with the hurdles the government continues to put in the way of their success.
The most recent jobs report found only 69,000 jobs were added to the workforce last month, and national unemployment actually increased to 8.2 percent, hinting at dangers of economic stagnation. Additionally, study after study has found that small businesses continue to struggle to keep up with complex regulations Washington is churning out at an alarming rate. A Gallup poll earlier this year found 85 percent of small businesses weren’t hiring, and nearly half cited government regulations as the reason why. Last fall the rate of new start-up businesses reached record low.
Small businesses are the bedrock of the economy, and long-term recovery will hinge on their ability to invest and grow. Small businesses create about two-thirds of new jobs each year and employ 60 percent of the private workforce. But keeping up with the steadily increasing rate of new and often changing regulations, and the threat of thousands of more rules pending approval, hampers their ability to invest or hire.
To provide business owners the relief they need policymakers need to focus on simplifying new rules and managing the rate at which they are created. Regulators should work with the business community to create smarter policies that meet our regulatory objectives and help businesses operate more efficiently. There should be a constructive spirit between agencies and the private sector, not a combative one.