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Celebrate Small Businesses – They Do an Economy Good

Posted By Ericka Andersen On May 20, 2011 @ 10:30 am In Economics | Comments Disabled

This week is U.S. Small Business Week, and it’s important to take a moment to recognize those companies that have done so much for the country. It’s especially important because so many of these businesses are being threatened by regulatory burdens imposed by Obamacare and a slew of other economic and environmental regulations.

America’s 27.2 million small businesses employ nearly 60 million people. Despite their important contribution to the country’s economy, these companies face some of the steepest regulatory costs around. According to one study [1] commissioned by the U.S. Small Business Administration, firms with fewer than 20 employees actually pay 36 percent more in regulatory costs per employee than larger companies. Such a burden makes it difficult for a small business to get off the ground and actually serves to discourage people from even trying to start one, resulting in a stunted economy and less job growth.

And it’s not just the small business owners that face these enormous costs. Taxpayers are also victims, paying for regulatory costs imposed on businesses in indirect ways. When businesses struggle to pay for their own regulatory costs, they are forced to raise praises, offer fewer choices for consumers, and decrease their overall innovation.

In this indirect way, Americans are paying $1.75 million per year for small business regulations imposed by big government bureaucrats with special interests in mind—and the cost is increasing every year. The total works out to about $15,000 per household in America. With 9 percent unemployment, it’s hard to justify such a crushing number.

In a recent testimony before the Senate Committee on Small Business and Entrepreneurship, Heritage Foundation fellow James Gattuso said [2]:

The impact on small businesses, moreover, goes beyond the direct costs of regulation on their own activities. Small businesses, like individual Americans, also pay “regulatory taxes” in the form of higher prices for goods and services, reduced economic activity and hindered innovation caused by excessive regulation generally.

It’s clear that quick action on regulatory reform in America is necessary as we struggle to bring our economy back from the brink. Making it easier for small business owners to thrive and create jobs should be a priority for government today.

In celebration of U.S. Small Business Week, Representative Darrell Issa [3] (R–CA) issued a statement today to support AmericanJobCreators.com [4], an online campaign to recognize the small business owners around the country who are contributing to job growth. The campaign also seeks to unveil the crushing costs of government regulation and promote the importance of private-sector job creation from a small business perspective.

Small businesses matter. Celebrate their contribution to our country today.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/05/20/celebrate-small-businesses-%e2%80%93-they-do-an-economy-good/

URLs in this post:

[1] According to one study: http://www.sba.gov/sites/default/files/rs371.pdf

[2] Heritage Foundation fellow James Gattuso said: http://www.heritage.org/research/testimony/assessing-the-regulatory-and-administrative-burdens-on-americas-small-businesses

[3] Representative Darrell Issa: http://issa.house.gov/

[4] AmericanJobCreators.com: http://jobs.majorityleader.gov/

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