It’s no secret that small business and entrepreneurship isn’t as easy of a task as it used to be. Now regulations and guidelines keep the “American Dream” under wraps. There was a time when anyone that had an idea could open a shop and peddle their wares and services, but now licenses and permits are required. There was an article posted on Forbes not too long ago that states President Obama saying, “In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.”
Well thank you for approving less, but how about not placing anymore regulations and reversing some of the old ones. It is understood that these regulations are to help consumers as a whole, but you’re regulating small business right out the door. In fact a recent census showed that more companies are dying than being born in the United States for the first time in 35 years. We have fallen to 12th in the world, somewhere behind Italy, in net business formation per capita, according to The San Diego Union-Tribune.
One of the largest reasons for the decline is regulation. It was Obama’s economic team that issued a report concluding that excessive licensing rules from state governments destroy jobs and opportunity, especially for the working poor. I find it interesting that the federal government is passing the blame onto the state level rather than taking responsibility for their own passing of regulations.
The issue isn’t whether regulation is at a state or federal level, it doesn’t matter where the regulation is coming from, it’s that there are more regulations coming at all. Federal regulation alone cost nearly 2 trillion in 2014 through higher prices and lost productivity, estimates the Competitive Enterprise Institute. So what will it take for small businesses to survive as regulations continue to be created? Nobel laureate economist Milton Friedman stated that regulation doesn’t start with the consumers, but rather the industry itself trying to block competition.
The problem of excessive regulation doesn’t seem to have a resolution, but rather looks to gain more regulation over time. What are your thoughts on regulation of small businesses? If you are a small business owner do you struggle with licensing and regulation?
Read the full article from The San Diego Union-Tribune HERE