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Issue Analysis

Real America Update: Vast Majority Of Small Biz Owners Say Regulation Is Choking Them

A tale of two perspectives...

The bureaucrats in charge claim that the Obama administration is "doing just fine" with its approach to small businesses.

“From day one, President Obama has made small businesses a top priority in his White House, giving them the tools they need to turn their dreams into small businesses, and their small businesses into world-class companies,” Mills told the crowd in Charlotte. “Giving them help, and then getting out of their way.”

A federal bureaucrat applauding the efforts of the federal bureaucracy...let's all take a moment to recover from the shock.

However, as often happens, once one tiptoes outside the Beltway and back into a little place the rest of us like to call "Reality", the picture is just a little different.

The National Federation of Independent Businesses and the National Association of Manufacturers commissioned a survey to see what those involved in the small business sector thought about all of this federal "help". (The link to the .pdf with all the results can be found here.)

Another shocker: the rhetoric and the reality aren't exactly waltzing in harmony.

The data paints a bleak picture, with a majority of respondents (55%) saying that compared to three years ago the national economy is in a worse position for American small business owners and manufacturers to succeed (compared to only 24% who say it is in a better position). There is limited evidence these respondents see a respite in sight in terms of economic improvement ahead.

Let's take a look at the notion that the administration is "Giving them help, and then getting out of their way."

Throughout the open-ends and the data, these respondents express significant concern that the government regulatory environment is getting worse (55% say efforts of federal regulators to work with small businesses are getting worse, compared to only 13% who say they are getting better) and is a significant burden on their business. The impact of the regulatory environment is clear, as respondents express concern about companies moving overseas (27% say this is the mostly likely result of new federal regulations), rising consumer prices (24%), and job loss (23%).

Over two-thirds of small business owners and manufacturers (69%) say President Obama’s recent Executive Branch and regulatory policies have hurt American small businesses and manufacturers, compared to only 29% who say they have helped.

But foreign competitors are not perceived to be as significant a negative influence as the United States’ own regulations and taxes. Sixty-two percent (62%) say the United States’ own laws, regulations, rules, taxes, and fees impact their company more negatively than foreign competitors.

Of course, one of the biggest looming regulatory burdens is the one touted as the signature achievement of the Obama administration.

Two-thirds of respondents who offer their employees health insurance think the new health care law will cause insurance costs to increase. More than one in five say they will consider dropping health insurance coverage for their employees as a consequence of the new health care law.

The results of this survey are indeed bleak but most definitely worth noting. Small businesses don't have the lobbying power to get waivers from Obamacare or the financial wiggle room to weather a sustained regulatory onslaught. More than half of the respondents offered this reflection of the current mood:

In this environment it may not be surprising, but is still concerning, that a majority of these respondents (55%) say that given what they know now and in the current economic climate for business, they would not start a business today.