NFIB: New Study on Regulations Should Trigger Alarms Washington
Study by manufacturers shows how regulations siphon capital from economy and hurt small businesses
Washington, DC (September 10, 2014) — The National Federation of Independent Business (NFIB) today said that a new study released by a group representing American manufacturers should force Congress to get serious about taming a regulatory system that is increasingly, and perhaps prohibitively, expensive for small businesses.
“The real cost on small manufacturers, and therefore the larger cost to the economy, is staggering according to this research,” said Dan Bosch, NFIB Manager of Regulatory Policy. “The relationship between federal regulations and economic policy is badly out of balance and it’s undermining everything that the Administration and Congress say they want to accomplish.”
The report, by the National Association of Manufacturers, finds that the average American company with 50 or fewer employees pays nearly $12,000 to comply with regulations. Remarkably, the average small manufacturer (those with 50 or fewer workers), must pay nearly $35,000 per year, per employee to be in compliance.
“A small manufacturing firm with 10 employees must spend $350,000 per year, before they make a single dollar in profit, to comply with federal regulations,” said Bosch. “That’s a massive barrier to entry for small businesses and a powerful incentive to invest and create jobs outside of the United States.”
President Obama and every member of Congress claim as a central economic policy the revitalization of the manufacturing sector, which has shed millions of jobs over the past decade under withering pressure from overseas competitors whose regulatory costs aren’t nearly as high. That’s the right goal, said Bosch, because manufacturing jobs generally pay more than service sector positions. Clearly, though, that goal is undermined by the bewildering proliferation of regulations and the costs they impose on small businesses.
“It’s always been one of the main pathways to the middle class for Americans and the federal regulatory bureaucracy is now blocking it,” he said. “We’re not going to have a serious jobs policy, or a serious economic policy, unless we get serious about reigning in the regulatory system.”
NFIB is part of a coalition of organizations calling for sensible regulations. Its website provides research on the rules affecting small businesses and their effect on the economy. For more information about NFIB please visit www.nfib.com.