Debunking the "job-killing regulations" myth

Job-killing regulations. 

How many times have we heard this rhetoric from big businesses opposing new regulations while pretending that they are concerned about small businesses?  Yet polls of small business owners find that most understand the need for regulations. 

I outlined the results of one of these recent polls in an opinion editorial in The Hill.  The poll was conducted by Lake Research for three national business organizations, one of which is the American Sustainable Business Council (I serve as the Co-Chair of the Action Fund for the ASBC).  A summary of this poll is below.

But first, let’s look at how accurate the predictions have been of jobs to be lost from the passage of past “job-killing regulations”.

A new report released today by Public Citizen reviews 8 major regulations that have been implemented since the 1970’s.  Industry representatives directly impacted by these regulations predicted that if these regulations were put into effect, up to 55 million American jobs would be lost

These predictions included 1.5 million jobs to be lost due to requiring cars to get better fuel economy.  Up to 2 million jobs were predicted to be lost because of amendments to the Clean Air Act.  Forty-Three million jobs were supposed to be lost due to banning the use of lead in gasoline.  Public Citizen reviews these predictions and contrasts them with what really happened after each new regulation went into effect.   It’s a fun read.

Did we actually lose up to 55 million jobs due to these 8 regulations?  Of course not.  It is a frightening prediction.  But the 55 million predicted lost jobs is actually nearly 5 times greater than the current number of unemployed in this country, 11.3 million. 

Are there too many people unemployed in this country?  Of course.  Are these 11.3 million unemployed due to the 8 regulations (or any regulations) reviewed by Public Citizen? Absolutely not.

Yet the “job-killing regulations” fear mongering goes on today even though history has shown us that we should take these scare tactics with a mountain of salt.

Here is an excerpt from my opinion editorial on the small business owners poll on regulations that I mentioned above:

Contrary to anti-regulations rhetoric, 78 percent of small business owners see government standards as an important tool to level the playing field with big business and 86 percent view regulations as a necessary component of a modern economy: 93 percent agreed that their business could live with fair regulations and 78 percent agree that some standards are important to protect small businesses from unfair competition. Moreover, 76 percent said that regulations on the books should be enforced.

Small business owners express strong support for specific rules and standards:

•    84 percent support food safety standards
•    80 percent support product safety standards
•    80 percent support disclosure and regulation of toxic materials
•    79 percent support ensuring clean air and water
•    78 percent support rules to prevent health insurance companies from increasing rates excessively
•    67 percent support rules to curtail financial speculation by Wall Street and banks.
•    61 percent support moving the country towards energy efficiency and clean energy.

When it comes to predicting the impact of EPA rules, we can't trust the utility companies

Seven times either I or the SC Small Business Chamber has intervened in rate hearings for SCE&G and Duke Energy.  Seven times the public was told that these power companies had to have every penny of their rate hike proposal or their world would come to an end.  Seven times their rate increases have been cut by about 50% or more by the SC Public Service Commission.  Seven times SCE&G and Duke continued to rack up big earnings after the rate cases were over.

Just last December we settled with SCE&G for a 1.38%  rate hike compared to the 6.6% it asked for.  This month we settled with Duke which had originally asked for a 15.1% overall electric rate increase (14% for small businesses) but in the end was satisfied with a 8.16% overall rate hike (3.42% for small businesses).

This is the background you need to know when utility companies scream that new EPA rules on limiting carbon pollution from coal plants (which account for 40% of our carbon emissions in this country) will cause rates to skyrocket.  The track record shows that you simply can’t believe them. 

Below is a story today in The Hill in which I make this point.

 

The Hill
September 23, 2013

Emissions regulations are central battle in Obama climate agenda

 

 

By Julian Hattem and Ben Goad

If the Obama administration's proposed limits on greenhouse gas emissions from new power plants become law, they would represent the first major victory for the president on his second-term climate plan. But opponents are not ready to roll over.

 

The Enivronmental Protection Agency's (EPA) proposal has reignited a bitter fight over the consequence of the proposed regulations on businesses, with coal country and business groups warning that the announcement will be a death knell for the energy resource and have trickle-down effects throughout the economy.

“The facts are plain and simple: coal provides the greatest share of electricity we use,” said Sen. Joe Manchin, Democrat of West Virginia. “If these regulations go into effect, American jobs will be lost, electricity prices will soar and economic uncertainty will grow.”

Together with an upcoming proposal to cap emissions from power plants already in existence, Friday’s proposal from the EPA amounts to the centerpiece of the White House’s second-term climate agenda and a major effort to control releases of the primary greenhouse gas.

Power plants are the largest source of carbon emissions, accounting for about 40 percent of the nation’s discharges, but currently they are allowed to spew the gas without limit.

The proposal on future facilities sets caps for the amount of the greenhouse gas that new coal and natural gas plants will be able to send into the atmosphere. The draft rules also call for new coal plants, which emit more carbon than natural gas-fired facilities, to use a carbon capture and storage technology that opponents believe is too expensive and still not yet proven to work as planned.

Requiring that technology could amount to a de facto ban on new coal facilities, they have worried, and could hurt small companies disproportionately.

“It is clear that small facilities with sparse capital reserves will be the most impacted by stringent [greenhouse gas] standards,” the conservative American Action Forum concluded in a report issued Friday. “Even though they contribute less than one percent of U.S. emissions, small entities will face the same regulatory hurdles that large utilities encounter.”

Other businesses, however, counter that the realities of climate change present far worse threats to portions of the private sector than do the proposed regulations. Along the coast of South Carolina, businesses fear rising sea levels that could decimate the state’s retail and tourism industries, said Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce.

Knapp rejected claims by industry groups who say the regulations will necessarily raise energy costs for American households.

“The sky is always falling for those guys,” Knapp said. “They simply try to scare the public, and guess what? The next quarter, they’re still making profits – double-digit profits. It’s obscene.”

The White House is comparing its regulatory effort and the opposition it has stirred to Obama’s first-term focus on developing new fuel economy standards for cars and trucks, the second largest source of American carbon emissions.

“We saw a lot of the same naysayers who said that this would be really bad for the auto industry,” Josh Earnest, a White House spokesman, said on Friday. “But over the course of time in which those rules took effect, we have seen the auto industry strengthen significantly in terms of creating jobs and putting forward better products and improving sales and revenue.”

The administration is predicting that requiring the carbon capture technology will lead to new advancements, making it cheaper and easier to employ.

The power plant rules are the administration’s most prominent environmental and safety regulations of Obama’s second term to date, but they are hardly the only ones.

In recent weeks, the administration has issued proposals to certify that the EPA has the authority to regulate streams, estuaries and smaller bodies of water, and to curb cancer-causing dust that can occur at construction sites.

Coming down the pike are final rules limiting pollution from automobiles, upcoming yearly limits for the amount of biofuel that refiners must blend with conventional gasoline and new standards for smog.

Yet time is growing short for the Obama’s second term regulatory agenda, with the clock already ticking on the president’s time in office.

“It’s important to move quickly, both to finish it in this administration and because we need to end the unlimited dumping of carbon pollution from the existing fleet of coal plants, which are the biggest source of carbon pollution in the country,” Dave Hawkins, head of the Natural Resources Defense Council’s climate program, said.

The EPA has laid out a schedule of deadlines meant to ensure its goals are accomplished. Pollution standards for existing plants, for instance, are due to be proposed next June and finalized the following year.

“To do what is on his agenda is definitely within the realm of the practical,” said Abigail Dillen, vice president of litigation for climate and energy for EarthJustice.

Regulators certainly aren’t wasting any time. As it unveiled the proposal on Friday, the EPA announced that it would begin outreach on the second set of rules, for currently operational plants, which are sure to face greater opposition.

“We’re beginning the discussion, and as we go through that discussion lots of ideas will come forward about sensible and cost-effective ways to reduce carbon from the existing fleet,” an EPA official said.

Critics of the power plant initiative worry about the dynamic it will create, especially for other industries. 

“This rule sets a dangerous precedent that EPA will soon extend to other sectors, including refineries,” Rep. Lamar Smith (R-Texas), the chairman of the House Science Committee, said in a statement on Friday. “It is just the latest example of the President’s all-of-the-above rhetoric not matching his administration’s actions.” 

Ross Eisenberg, the vice president of energy and resources policy at the National Association of Manufacturing, shared Smith’s concern about other sources of greenhouse gases that the EPA might decide to regulate. “It’s chemicals, it’s natural gas distribution systems, it’s iron and steel, metal manufacturing, food distribution,” Eisenberg said. “We’re expecting the decisions and the precedent that’s being set here, in terms of what they can and can’t mandate, what data they need to set this rule, to matter for those follow-on regulations.”

Read more: http://thehill.com/blogs/regwatch/energyenvironment/323785-new-emissions-regulations-are-central-battle-in-obama-climate-agenda#ixzz2fioOWDlx

 

 

Recipe of obstruction

As the party conventions roll out this week and next, big business and its lobbying organizations like the Business Roundtable will be making big political donations and entertaining the influential in style.  Their collective message, says Donald Cohen, will be about “the ‘burden’ and ‘uncertainty’ of government action to remove toxic air pollution, stop climate change, stem the dramatic increase of workplace repetitive stress injuries like carpal tunnel and give consumers information about calories in our Big Macs and human rights abuses built into our iPhones.”

In his opinion editorial in The Huffington Post Cohen scolds big business for its consistent failure to acknowledge the problems it creates and its resistance to finding real solutions.    

“They use a cookbook of standard rhetorical devices and public relations campaigns designed to avoid responsibility for the pollution they create, the unsafe food and consumer products they produce, the dangerous work conditions they manage and the complex, indecipherable and ultimately dangerous financial devices they invent,” writes Cohen.

Cohen lists big business’s recipe of obstruction:

“First, they deny. Remember, smoking doesn't cause cancer, global warming is a hoax, fats and sugars don't cause obesity and the list goes on and on.

Second, they say it's not their fault. Remember, it's the "nut behind the wheel" that caused auto accident deaths, irresponsible workers cause workplace accidents, and women earn less than men because they just don't have the skills.

Third, they say the free market, not government action, will take care of problems. Business leaders assured us they just wouldn't produce unsafe cars, food or toys since consumers wouldn't buy them, financial markets will spread risk and self-correct and employers wouldn't be able to hire workers if their workplaces were unsafe.

Fourth, they brand every new rule as a job killer. They said seat belts would kill the auto industry, the Americans with Disabilities Act (ADA) would be a "disaster for U.S. business" and the minimum wage will destroy civilization as we know it.

Fifth, they bemoan the loss of American freedom. Social Security was "the end of democracy," the minimum wage is an "alien philosophy" and calorie counts on restaurant menus puts government in control over what we eat.

Sixth, they warn that unintended consequences will actually make the problem worse. Child-resistant caps on drugs and toxic household products would "lull" consumers into unsafe behavior, raising the minimum wage hurts poor workers and understandable credit charges would only confuse consumers.

And seventh, they claim that it just can't be done. Remember, catalytic converter technology to reduce auto pollution didn't exist, nor did substitutes for asbestos or ozone-depleting chemicals (CFC's).”

Cohen wants corporate America to “end their campaign of denial, delay and obstruction and become part of the solution to America’s most pressing problems.”

That would be great.  But for right now I would just like big business interests to stop using one of their most popular and effective tactics of obstruction not on Cohen’s list—protecting small business.

Whenever you hear big business claim they oppose a solution to a problem because it would hurt small businesses, just start laughing.  We can talk for ourselves and we want to help solve the country’s problems—not obstruct.

Tidal wave of lies

There are three main things holding the small businesses back in North Carolina, says Gregg Thompson the National Federation of Independent Business (NFIB) in that state.  “One is regulations, one is health care and one is taxes.”

Mr. Thompson’s comments were part of a nine-state “Stop the Tidal Wave” anti-regulations campaign recently launched by the NFIB and its new national project, Small Businesses for Sensible Regulations (created one year ago and now with an unimpressive 1,333 members).  The effort will include paid advertising and, of course, a lot of fear mongering about how we’re all going to be washed away in a tsunami of federal regulations.  Not present regulations mind you.  But future, mostly unspecified regulations.  Are you scared yet?

To buttress their argument that regulations are the number one problem for small businesses the NFIB cites a February Gallup poll as one demonstrating that “regulatory burdens are a top reason why small businesses are not hiring at pace with previous years.”

But as most polls have shown, regulations are not the reason small businesses are not hiring.  It’s the lack of demand. 

Even the Gallup poll the NFIB references says that. 76% of the small-business owners Gallop polled who were not hiring said that they do not need any additional employees and 71% said they were worried that sales won’t justify adding employees.  “Companies typically hold back on hiring when the economy is weak and when their operating environment is not providing sufficient revenues or cash flows.  This appears to be the case right now,” said Dennis Jacobe, chief economist for Gallup.

However, 48% of the business owners not hiring did say they were worried about the potential cost of healthcare and 46% were worried about new government regulations.  But these were concerns about something potentially happening in the future, worries ginned up by the NFIB’s relentless politically motivated PR campaign against the Obama Administration.  Mr. Jacobe refers to these concerns as “exacerbating an already uncertain and difficult situation.”

In other words, lack of demand is the driver of lack of new jobs, not concern about regulations and healthcare.  If it were the latter, no small businesses would be hiring but the truth is that small businesses are leading the new job creation in this country. 

When Gallup asked small-business owners why they were hiring new employees, 64% cited increased consumer or business demand and 55% said that sales and revenues justify adding more employees. 7% even cited government tax incentives as the reason (you won’t hear the NFIB talking about that). 

So while the NFIB misrepresents the Gallup poll findings, Mr. Jacobe throws cold water on the NFIB bogus claim that small-businesses owners are shaking in their boots over future new regulations.  “Right now,” he says, “economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time.” 

This is exactly what the NFIB political machine is afraid of—small business optimism.  It must be stopped.  Thus their 9-state anti-regulation campaign built on distortion and lies.

Oppose the Regulatory Freeze Act---NOW!

Tomorrow the U.S. House is scheduled to vote on H.R. 4078, the Regulatory Freeze Act. 

The legislation would stop the federal government from promulgating any new regulations until the unemployment rate is 6% or below.  If this bill should ever become law, which it won’t, the coal and oil companies, health insurance companies, big pharma, multinational corporations, and the “too big to fail” banks will have all won.  There will be no regulations to implement recent laws aimed at protecting consumers and leveling the playing field for small businesses.  And there would be no need to pass any new laws to do likewise because it is the regulations that are needed to carry out the intent of Congressional laws. 

Below is a letter from the American Sustainable Business Council laying out the small business argument for not passing the Regulatory Freeze Act.

If you like your government to actually work to protect your health and safety and also protect small businesses from unfair competition from corporate giants, call your House member today.  The House switchboard is (202) 224-3121.  Call and just ask to be connected to your House member.  The message is easy:  Vote NO on H.R. 4078.

American Sustainable Business Council

July 23, 2012

Re:  H.R. 4078, Regulatory Freeze Act

Dear Representative:
 
I write you today to urge you to oppose the “Regulatory Freeze for Jobs Act of 2012" (H.R. 4078), the “Midnight Rule Relief Act of 2012," (H.R. 4607), and the “Sunshine for Regulatory Decrees and Settlements Act of 2012” (H.R. 3862). Votes on these bills are expected this week. These bills hurt small and medium sized businesses by halting the regulatory process that levels the playing ground for these businesses to compete, creates incentives for innovation and protects our customers and employees.

These three bills constitute a shift away from forty years of regulatory precedent that protects the public against a range of market imperfections. The bills will also lead to a more chaotic and less competitive market. And finally, the bills will also have the unintended consequence of shifting the burden of proof for environmental, health and safety issues back to taxpayers and away from powerful corporate interests. Eroding the operational capacity of regulatory agencies to do their job, as these bills appear designed to do, will not foster productive growth among small and mid-sized firms. Instead these actions will allow the largest firms to further dominate the marketplace.

The American Sustainable Business Council (ASBC) is a growing national coalition of businesses and business organizations committed to advancing policies that support a vibrant and sustainable economy. ASBC, through its partner organizations, represents over 150,000 businesses and more than 300,000 business professionals, including industry associations, local and state chambers of commerce, microenterprise, social enterprise, green and sustainable business, local living economy groups, women and minority business leaders, and investor networks.

While some inside the Beltway claim that regulations are holding back our economic recovery, ASBC has a different view. ASBC, along with other small business organizations, released back in February a poll of small business owners which found that small businesses don’t see regulations as a major concern. Instead, the vast majority of small business owners believe weak demand is the primary challenge for their business right now.

Our polling confirmed that small business owners value regulations if they are well-constructed and fairly enforced:

 Small business owners believe certain government regulations play an important role: 86% believe some regulation is necessary for a modern economy and 93% of respondents believe their business can live with some regulation if it is fair and manageable.
 78% of small employers agree regulations are important in protecting small businesses from unfair competition and to level the playing field with big business.
 79% of small business owners support having clean air and water in their community in order to keep their family, employees and customers healthy.
 61% support standards that move the country towards energy efficiency and clean energy.
 
If enacted, the bills we oppose would open the door for more problems like the financial and mortgage crisis of 2008. The bills, in our view would further damage our economy, stifle consumer demand and put small companies out of business.

We believe an approach to make the regulatory process help businesses be more successful is to increase the capacity at the regulatory agencies. This would enable the agency ombudsmen to be more responsive and effectively address small businesses’ questions when they arise. Our experience has been that the ombudsmen process works well.

Blocking, weakening or delaying critical standards and safeguards will worsen the uneven economic playing field that leaves many small and medium sized businesses at a competitive disadvantage. It also inhibits innovation in new technologies that can create good, sustainable jobs and create safer products, workplaces and communities.

We call on the House of Representatives to reject these three bills.

Sincerely,

David Levine

CEO & Co-Founder

National Poll Shows Bipartisan Support For Stronger Protections From Toxic Chemicals

WASHINGTON, DC (July 19, 2012) – A nationwide poll and four separate, statewide polls found similar strong support for bolstering protections against toxic chemicals. By overwhelming bipartisan margins, Americans support strengthening the 35-year-old Toxic Substances Control Act (TSCA), according to new polls released today by the Natural Resources Defense Council (NRDC), the Safer Chemicals Healthy Families Coalition, and the Ecology Center.

“Americans of all stripes have real concerns about the toxic chemicals we are exposed to every day – and the serious health problems they cause,” said Daniel Rosenberg, director of NRDC’s toxic chemicals reform project. “Protecting us from chemicals linked to cancer, learning disabilities, infertility and other health problems should be a top priority for Congress. This really can’t wait.”

NRDC and the Safer Chemical Healthy Families coalition strongly support the Safe Chemicals Act, S. 847, introduced by Sen. Frank Lautenberg, D-N.J. The bill updates TSCA by requiring manufacturers to show that their chemicals are safe in order to sell them. It also streamlines the Environmental Protection Agency’s (EPA) ability to limit uses of a chemical that may harm public health or the environment.

“As the Senate moves closer to a vote on the Safe Chemicals Act, Senators should keep in mind that the partisan divisions that wrack Congress do not reflect the views or desires of the American people,” said Andy Igrejas, campaign director of Safer Chemicals Healthy Families.

A nationwide poll conducted by Public Opinion Strategies (POS) for NRDC found:

-Nearly 74 percent of those polled think the threat posed to people’s health by the exposure to toxic chemicals is serious, with 34 percent saying they think the threat is “very serious.”
-68 percent of respondents support stricter regulation of chemicals used and produced in the United States, with support across all demographic sub-groups, including those typically opposed to government regulation, such as self-described conservatives (54 percent) and tea party supporters (51 percent).
-Description of a proposal that would require the chemical industry to prove that its products are safe and give EPA greater authority to restrict some or all uses of chemicals that may harm health or the environment garnered support from 77 percent of respondents.

“Even when we presented robust arguments on both sides of the issue, those we polled continued to side with supporters of reform,” said Lori Weigel, a partner at polling firm Public Opinion Strategies, who conducted the national poll for NRDC.

POS and Fairbank, Maslin, Maullin, Metz & Associates (FM3) also conducted a poll in New Mexico that found:

-76 percent of respondents consider chemical exposure a serious health threat in day-to-day life.74 percent of respondents support the legislation described that would increase EPA authority and require that the chemical industry prove its products are safe – including 81percent of women, and 78 percent of Latino respondents.

Meanwhile, separate polls conducted by The Mellman Group for the Safer Chemicals Healthy Families Coalition in Nevada and Missouri found:

-62 percent of respondents in Missouri support stricter regulation of chemicals, and 64 percent support the provisions of legislation to strengthen the current law;
In Nevada, 61 percent of respondents support stricter regulation while 64 percent support the provisions of the legislation.

“There is a rare depth of public support for tackling the issue of toxic chemicals that crosses party lines,” said Mark Mellman of the Mellman Group, who conducted statewide polling on the issue in Nevada, Missouri this month and Montana, Ohio, Wisconsin and Pennsylvania in 2011.

Finally, a Michigan poll conducted by POS with Greenberg, Quinlan, Rosner Research for Ecology Center in Michigan found 74 percent of respondents supportive of legislation described to increase EPA’s authority to regulate chemicals and require chemical companies to prove that their products are safe. The poll also found 61 percent of respondents were extremely or very concerned about the health impacts from toxic chemicals in the Great Lakes, and 32 percent were somewhat concerned. A mere 6 percent were not concerned.

"The findings of this poll demonstrate that Michiganders support a change in the way our nation deals with toxic chemicals," said Rebecca Meuninck, campaign director of the Michigan Network for Children's Environmental Health. "Michigan residents are concerned about the impacts toxic chemicals have on their health and the health of the Great Lakes."

About the poll: For the national poll, Public Opinion Strategies conducted a telephone survey of 800 registered voters nationwide. The survey, conducted June 25 through June 27, 2012, has an overall margin of error of +/-3.46 percent nationwide.

Anti-regulation folks have chance to be specific or shut up

Efforts to blame regulations for the economy have been raging for quite a while in Congress and on the campaign trails.  Clearly the rhetoric of “job-killing regulations” has been used by partisans to score political points.  And just as clearly small businesses, as seen in most polling, have said regulations are not holding them back from hiring—lack of consumer demand is doing that.

Yet every week in Congress, especially in the House, hearings are held to blame regulations and the agencies that regulate for all our economic problems.  Most of what we hear are generalities instead of specific problems.   Of course, this makes for generating a lot of heat but little light on the issue.

So the White House has launched a new website that will allow businesses to say what regulations are specifically causing them problems and taking suggestions of what the businesses would like to see changed.  Here is the website.

This is the time for regulatory-complainers to step up with clear examples of the problem.  We’ll have to wait and see what kind of response the White House will receive but it should be interesting.  Hopefully there will be some good responses that can focus on a particular regulatory problem. 

But my guess is that the responses will continue to be general in nature preferring to turn up the heat without the providing any light.  And that in itself will be enlightening. 

Congressional field hearing yields real small business issues

South Carolina Congressman Mick Mulvaney held a field hearing in Rock Hill, SC, yesterday titled “Caught Up in Red Tape: The Impact of Federal Regulations on Small Businesses and Contractors”.  Mr. Mulvaney is the Chairman of the Small Business Subcommittee on Contracting and Workforce.
I wasn’t able to attend the meeting but did have a long conversation with the Rock Hill Herald reporter, Ms. Jamie Self, who covered the event.

I expected the hearing would turn into a showcase for anti-regulation mantra we hear so often from politicians.  To my surprise, I was told that no one testified that regulations were killing jobs.  Instead the views expressed were about big businesses having an advantage over small businesses getting government contracts, lack of knowledge about the Affordable Care Act benefits for small businesses and the lack of customers—all very real issues.

So congratulations to Mr. Mulvaney for not trying to stack the deck with anti-regulation rhetoric testimony.  By simply opening up the forum to all comers, he heard real concerns from small business owners—not political talking points.

And maybe it was this lack of negative comments about regulations that inspired Mr. Mulvaney before the hearing ended to say that regulations can be good.  According to the news story:

“Mulvaney emphasized that not all regulations are ‘bad,’ including those regulating safety in the workplace and in food and drugs and those that ‘keep our financial markets transparent.’”

Small business survey

A revealing survey of small business owners was released yesterday by U.S. Bank.  The survey was conducted in only 36 states with the over 3200 sample including sole proprietors through businesses with fewer than 100 employees.  Unfortunately the survey also included 3% of businesses with over 100 employees, not my definition of a small business.  

While the survey’s accuracy in reflecting the true composition of all small business owners can be questioned (93% of respondents were white), here are some interesting findings:

·         71% believe that we’re still in a recession

·         69% feel their business is in good or excellent health

·         Which issues are more important today than in the 2008 Presidential election

o   Healthcare/Medicare (65%)

o   Federal Deficit/Debt (64%)

o   Jobs/Unemployment (59%)

o   Energy Costs (56%)

o   Taxes (54%)

It is this last question that I find interesting.  When these same small business owners were then asked what would be the one thing they would do if they were President of the U.S. for one day, here were the top three responses:

·         Lower Taxes/Tax Breaks (20%)

·         Reduce Regulations (17%)

·         Health Insurance Issues (15%)

Obviously there is a disconnect between what these respondents said were their most important issues and what they said they would do as President to help small businesses.  The bottom line is that while these small business owners can identify their concerns, they don’t have good well-thought out responses of how to address those concerns other than the political talking points fed to them daily by Fox News and radio talk shows. 

Lowering taxes and giving tax breaks would seem to be a problem if your major concern was cutting the federal deficit and debt.  While these business owners have been seriously and needlessly frightened at the aspect of Obamacare (60% believed it would have a negative impact on their businesses), they have no clear ideas to offer for doing something about different.

Lastly, regulations weren’t a top concern but yet there were 17% regurgitating the boilerplate anti-regulation call to action.  Good grief.

South Carolina is one of the best places to set up and run a small business

Health, Safety and Environmental Regulations rated extremely business-friendly by local small entrepreneurs

South Carolina female business owners more optimistic about their financial future than their male counterparts.

South Carolina small business owners give lowest ratings to state and local governments’ training and networking programs.

Columbia, SC- May 9, 2012—South Carolina ranked among the top small business-friendly states according to a survey undertaken by Thumbtack.com in partnership with the Kauffman Foundation.  Thumbtack.com connects service professionals in its 275,000 small business network with prospective customers.  Over 6,000 small business owners, most with less than five employees, in the Thumbtack.com database responded to the survey.

South Carolina businesses responding gave the state a B+ grade for overall friendliness.  In particular, South Carolina earned an A+ grade for the business friendliness on health, safety and environmental regulations. The cost of hiring a new employee also received an A+ and the ease of starting a new business was given an A-.

Small businesses generally viewed state and local government regulations as very friendly giving them a solid A. Employment, labor and hiring regulations were given an A. Land use and zoning regulations were given an A-.

A B+ was given to state and local licensing that included licensing forms, requirements and fees.  Even the tax code and tax-related regulations were rated as a B.

“In spite of all the controversy about regulations these results indicate that there is little concern about them in our state,” said Frank Knapp, Jr., president and CEO of the South Carolina Small Business Chamber of Commerce, who pointed out that this finding was in line with other national surveys.

“What really brought South Carolina’s overall small-business friendliness score down was something surprising—training and networking.  Both received a C+.  We either don’t have enough of these opportunities or we aren’t doing a good job of getting the word out about them or both.  We obviously have a problem that needs to be addressed.”

Another unexpected finding of the survey shows that women-owned small businesses in South Carolina were significantly more optimistic about their financial future than their male counterparts. Female entrepreneurs were 15% more likely than male entrepreneurs to rate their companies' financial situation as likely to improve over the coming year.

For more information on the survey visit www.thumbtack.com/sc

Two small business polls you should read

What do the small business owners in Pennsylvania, Ohio, Virginia, Michigan, Nevada and Colorado have in common with those across the country?  On political demographics and opinions on some important issues apparently a lot.

Earlier this year a national survey of small business owners commissioned by the American Sustainable Business Council, Main Street Alliance and Small Business Majority found that 50% of the business owners identified as Republican or independents leaning Republican, 32% as Democrat or independents leaning Democratic and 15% as independents (not leaning toward either party).

A Small Business Majority poll released this week of small business owners in the 6 states mentioned above found that 44% identified as Republican, 38% as Democrat, and 10% as independent. 

Small business owners in both polls found high support for the federal government’s efforts to protect the environment.

In the national poll 61% supported moving the country towards energy efficiency and clean energy and 79% supported ensuring clean air and water.  The states’ poll “found that 71% of small business owners agree government has a role in driving our country toward a cleaner, more competitive economy” and 76% favored “the EPA’s federal rule that new power plants reduce previously unlimited emissions of carbon dioxide, methane and nitrous oxide.”  The states’ poll also found a majority of small business owners (58%) supporting the government investing in renewable energy “despite the failure of Solyndra.”

The two polls also found similar results relating to the continued off-base criticism in Washington that regulations are a primary concern of small businesses.  In both polls, small business owners ranked regulations way down on their list of problems—4^th in the national poll and 5^th in the states’ poll.

A sign that the economy is improving at a good pace can be found in the responses to both poll’s question of what is the biggest problem facing small businesses. 

The national poll conducted primarily in December of this past year found that the number one problem for small business owners at 34% was weak customer demand.  But in the states’ poll conducted just last month lack of customer demand came in 3^rd as the top problems at only 24%. 

Now that’s great news.

Look who wants more regulations

There are approximately 12,600 registered lobbyists in Washington (including one of the newest-- Supreme Court justice Antonin Scalia’s son Eugene).  Spending on lobbying activities last year was about $3.3 billion according to the Center for Responsive Politics.  Much of all this lobbying power has recently been aimed at convincing our elected and non-elected officials that all government rules and regulations are evil, contrived by haters of free enterprise and therefore are… (wait for it)…JOB KILLING REGULATIONS.

Of course this phony argument is being peddled primarily by the carbon and financial industries trying to maximize their profits at the expense of the public’s health and safety, consumers’ financial protection and a fair playing field for small businesses to compete.  Polls continue to show that the public and even small business owners understand the importance of regulations.  And apparently, so do Washington lobbyists.  

The American League of Lobbyists (LDA) approved a proposal this week to support new regulations on lobbyists.  Not only do the lobbyists want more regulation of their profession, they want better enforcement of the regulations. 

The LDA wants tougher registration requirements that will result in more influence peddlers registering with the government and be subject to all the public disclosure laws.  It wants regulations to require faster reporting of new clients, mandatory ethics training and no more registrations exemptions for state, local and federal government employees.  The LDA also wants to move enforcement of the regulations from the U.S. Attorney’s Office to the stricter Justice Department’s Foreign Agents Registration Unit.

Why this new found love of regulations by the same lobbyists trying to deregulate every other industry? 

It turns out that the lobbyists are concerned for the public good and fair competition.  Sound familiar?

According to the story in The Hill, the LDA wants to “help rebuild public trust in Washington”.

“If people don’t have confidence in their system of government, we’re in sad shape, and I think that has been one of the things that has been happening,” says Howard Marlowe, LDA president.

But the newly proposed regulations are not just good for the public; they are also good for lobbyists. 

Lobbyists, like every other trade organization, want to improve the professionalism of their industry and to protect their members from unfair competition.  The proposed regulations would level the playing field for all those seriously lobbying in Washington by requiring all of them to be regulated to higher standards.

But while the LDA is lobbying Congress for more regulations on their members, don’t expect to hear the phrase “JOB KILLING REGULATIONS” used in their effort.  Even if the LDA is successful, there will be more registered lobbyists next year and the year after that and the year after that and …..

NFIB poll: regulations vs. lack of customers

I know that I pick on these guys relentlessly but every once in a while they produce some good information.  I’m talking about the NFIB (National Federation of Independent Business) or in this case the NFIB Research Foundation.

The Foundation released a new study, Small Business, Credit Access, and a Lingering Recession.  William J. Dennis Jr., Senior Research Fellow and author of the report, concludes:

The many fruitless attempts by policymakers to understand and improve the credit market for small businesses are due to the fact that they have thus far failed to adequately address the root causes of the economic crisis – lost confidence and uncertainty, and the housing crisis. The real estate situation has been the elephant in the room since the onset of the Great Recession and remains a substantial variable in the current plight of small business. Washington has responded by doing just enough to be dangerous, but far too little to have any long-term positive impact. Until a workable solution is implemented, we can only expect glacial economic improvement from the small-business sector. It is not a good time to be optimistic, but small-business owners by nature seem to be.

I’ve been saying for some time that if we solve the foreclosure problem in the country and allow underwater property owners to refinance or reduce their mortgage principals, we will get the economy rolling by improving real estate values, invigorating the housing construction industry and putting more money in homeowners’ pockets.

But diving into the provided results of this study there is a very interesting finding related to another hot controversy in Washington—what is the top problem holding back small business growth?  Is it regulations or lack of consumer spending? 

Here is what the NFIB report found regarding the issue of greatest financial concern to small business owners--“uncertainty” (33%), “poor sales” (23%) and “inability to obtain credit”  (15%). 

The report further broke down the responses for those citing “uncertainty” and found that 54% of these were related to the weak economy (“will sales strengthen or slide? and by how much?  What will happen to their input costs?”).  Another 23% of the “uncertainty” respondents cited policy/political conditions—federal and state taxes and budgets, regulations, healthcare reform, etc.  Another 23% of the “uncertainty” respondents referenced both economic and policy/political conditions.

So that you don’t have to do the math, here are the numbers if we’re just interested in the regulations vs. lack of consumer demand issue.

Of all the responses to the question of what is the greatest financial concern for small business owners, somewhere between 23% and 47% were most concerned about poor sales now and in the future.  We can’t know for sure from reading the report because the author didn’t give us enough detail about some of the “uncertainty” responses.

But we do know from the information given that regulations are well down on the small business owners’ list of concerns.  The report barely mentions regulations as a response and lumps these with non-regulation responses in the “policy/political uncertainty” category that only accounted for 7.59% of the total responses to the question.

The U.S. Senate will be addressing three anti-regulations bills soon and you can expect a lot of heated rhetoric about “job killing” regulations.  Clearly based on this NFIB study, the Senate will be wasting precious time and energy that would be better spent on solving our housing crisis.

Small business poll

On regulations, taxes and money in politics…"We're not like them"

Columbia, SC—A national poll shows the opinions of small business owners differ dramatically from the advocacy of big businesses and multinational corporations.  The results of the national scientific poll were released over the past four weeks by the American Sustainable Business Council, Main Street Alliance and Small Business Majority.  The poll was conducted by Lake Research Partners between December 8, 2011 and January 4, 2012. 

"Many of the real opinions of small business owners are far different than what are portrayed by big business interests," said Frank Knapp, Jr., Vice Chair of the American Sustainable Business Council and President/CEO of the South Carolina Small Business Chamber of Commerce. 

"There are some real ‘man-bites-dog’ stories here that are particularly amazing since half of the respondents self-identified as either Republican or leaning Republican," said Knapp. 

"Small business owners do not hate regulations,” said Knapp.  “They support regulations ensuring clean air and water and those moving the country toward energy efficiency and clean energy.  And regulations are not stopping hiring as we've been hearing—lack of consumer demand is doing that.  In fact, small business owners view regulations as protecting them from big business."

“Small business owners also don’t agree with the big business mantra on taxation,” said Knapp.  “They say that big businesses and multinational corporations use loopholes to avoid paying their fair share of taxes which harms small businesses.  A majority of these owners also support higher tax rates on individual income over $1 million, even $250,000.”

“These opinions fly in the face of the rhetoric about not raising taxes on the wealthiest because they are the ‘job creators’”, said Knapp.  “Small businesses are leading the job recovery in this country and they believe the wealthiest corporations and individuals are not paying their fair share of taxes.”

“On other issues small business owners share the public’s disgust with money in politics and disapprove of the Supreme Court’s Citizens United decision,” said Knapp. “Citizens United has unleashed massive amount of money from big corporations and millionaires and billionaires into political campaigns.  Small businesses believed they have been harmed because of this.”

Below are details of the poll results:

• Small business owners see their top problem as weak customer demand, not regulations: 34 percent cited weak customer demand as the most important problem for their business, while only 14 percent named government regulations.
• On the question of what would do the most to create jobs, cutting regulations came in low on the list: the top response was eliminating incentives to move jobs overseas at 24 percent; reducing regulation was fifth at 10 percent.
• Small business owners see an important role for standards and safeguards: 78 percent believe some standards are important to protect small businesses from unfair competition, and 76 percent believe regulations on the books should be enforced.
• Small business owners see regulations as necessary for a modern economy: 93 percent agree their business can live with some regulation if it is fair, manageable and reasonable.
• Small business owners express strong support for specific rules and standards: 78 percent support rules to prevent health insurance companies from increasing rates excessively, 84 percent support food safety standards, 80 percent support product safety standards and 80 percent support disclosure and regulation of toxic materials.
• Small business owners support clean energy policies: 79 percent support ensuring clean air and water, and 61 percent support moving the country towards energy efficiency and clean energy.
• Small businesses believe in streamlining government processes: 73 percent of respondents believe we should allow for one-stop electronic filing of government paperwork.
• Nine out of ten small business owners say big corporations use loopholes to avoid taxes that small businesses have to pay: 92 percent say big corporations’ use of such loopholes is a problem. Three-quarters of owners say their small business is harmed when loopholes allow big corporations to avoid taxes.
• Nine out of ten small business owners say that U.S. multinational corporations’ use of accounting loopholes to shift their U.S. profits to their offshore subsidiaries to avoid taxes is a problem: 91 percent agree it is a problem, with 55 percent saying it’s a very serious problem. When asked what would do the most to create jobs, small business owners chose eliminating incentives to move jobs overseas.
• Small business owners say big corporations are not paying their fair share of taxes: 67 percent believe big corporations pay less than their fair share. An even bigger majority, 73 percent, says multinational corporations pay less than their fair share.
• Small business owners say millionaires pay less than their fair share in taxes: 58 percent say households whose annual income exceeds $1 million pay less than their fair share.
• Small business owners support a higher tax rate for individuals earning more than $1 million: 57 percent agree that individuals earning more than $1 million a year should pay a higher tax rate on the income over $1 million.
• Small business owners want to eliminate the “carried interest” loophole that gives hedge fund managers a big break on their taxes: 81 percent favor hedge fund managers paying taxes at the ordinary income tax rate, which currently tops out at 35 percent, rather than the 15 percent capital gains rate they pay now.
• Small business owners support ending upper-income tax cuts: 51 percent say Congress should let tax cuts on taxable household income over $250,000 a year expire (only 40 percent believe they should be extended).
• Respondents in this scientific national survey were politically diverse, with a majority Republican or independent-leaning Republican: 50 percent identified as Republican (27 percent) or independent-leaning Republican (23 percent); 32 percent as Democrat (14 percent) or independent-leaning Democratic (18 percent); and 15 percent as independent.
• Small business owners say Citizens United decision hurts small businesses:  66 percent of small business owners view Citizens United v. FEC decision as bad for small businesses; 88 percent hold negative view of money in politics overall.

Read the full poll reports at these links:

http://www.asbcouncil.org/poll_regulations.html

http://www.asbcouncil.org/uploads/Taxes_Poll_Report_FINAL.pdf

http://www.asbcouncil.org/poll_money_in_politics.html

http://www.asbcouncil.org/poll_access_to_credit.html