Cutting Regulation Should Help Small Businesses

by Norris Law Group on August 22, 2014

Cutting Regulation Should Help Small BusinessesDr. Scott Shane, Professor of Business at Case Western Reserve University in Ohio and contributor to Entrepreneur Magazine, offers a simple solution to many of the problems facing small businesses in the United States: cut regulation.

Shane notes that federal regulations have increased since President Barack Obama took office in 2009 (with the exception of 2014, when the number of regulations added to the Federal Registry’s Unified Agenda went down about 24% from the previous year). He claims that the increase in regulations from 2009-2013 is “unfair and inefficient: Compliance with governmental rules and laws is a greater encumbrance on small companies than large ones, and regulation hinders small business formation, growth, and job creation,” and cites a Heritage Foundation finding that the cost of federal regulation increase by about $70 billion during President Obama’s first term in office.

According to Professor Shane, respondents to surveys conducted by the National Federation of Business said that “federal regulations and red tape” went from being the fourth-biggest problem for businesses in 2008 to the “#1 problem” for businesses in 2013.

Shane says that the current regulatory burden on US businesses in unfair, based on a report for the Office of Advocacy of the U.S. Small Business Administration by Nicole and Mark Crain of Lafayette University. This report shows that “the per-employee cost of federal regulatory compliance was $10,585 for businesses with 19 or fewer employees” while companies with 500 or more are only required to pay $7,755 per employee.He also says that these regulations put an undue burden on the US economy, as it makes it more difficult for businesses to grow and expand internationally: “…heavier regulation makes domestic companies less competitive internationally, and motivates businesses to transfer operations to less heavily regulated venues overseas.”

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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