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YOU MIGHT BE ABLE TO FIND A JOB AT STARBUCKS, BUT GOOD LUCK OPENING YOUR OWN COFFEE SHOP!!

Regulations Harm Small Business and Protects Corporations

February 22, 2012
James Hall, BATR

The prospects for conducting commerce are never an easy task. The hurdles to start a business much less stay competitive demands the greatest skill and fortitude. Innovation and inspiration often is the best course for those bold enough to become an employer. The idea that a level playing field exists for all comers is preposterous. The entire macrocosm for business rests upon separating your enterprise from that of your rivalries. Such is a basic lesson for those brave or foolish enough to enter the arena.

Courtney Rubin cites the following in Inc. Magazine:

“Businesses with 20 employees or fewer pay 36 percent more than their larger counterparts (defined as those with 500 or more employees), says the report – called “The Impact of Regulatory Costs on Small Firms” — from the SBA’s Office of Advocacy. This is because a lot of costs are fixed — the same whether you have two employees or 2,000. Total annual cost of following the rules for a small business: $10,585 per employee, or about $2,830 more than big business. Businesses with 20 to 499 employees paid about $7,454 per employee, or about $300 less than the largest companies.

The report estimates that 89 percent of all firms in the U.S. employ fewer than 20 workers. By comparison, large firms account for only 0.3 percent of all U.S. firms.

Says the report: “If federal regulations place a differentially large cost on small business, this potentially causes inefficiencies in the structure of American enterprises, and the relocation of production facilities to less regulated countries, and adversely affects the international competitiveness of domestically produced American products and services.”

The screams for jobs, jobs and jobs would give the hint that federal, state and local business policy would favor the productive engine of employment. However, in the real world of political influence and favoritism only the well connected get the advantages.

Government regulations are meant to stifle competition. The legislative process graces those who are well connected, financially heeled and schooled in the art of writing the regulations. Few small businesses have a legal department or experienced lobbyists.

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