Cost Of Regulation Hits Small Manufacturers Hardest
A recent study has confirmed what we have all known, small manufacturers are disproportionately effected by federal regulation. These are not just our views, they are verified by a study released by the Office of Advocacy. The report titled “The Impact of Regulatory Costs on Small Firms”, written by Nicole V. Crain and W. Mark Crain, was released and presented by Crain at the Office of Advocacy’s symposium, celebrating the 30th anniversary of the Regulatory Flexibility Act.
The report found that by 2008, the annual cost of just federal regulations in the U.S. increased to more than $1.75 trillion. That amount divided equally among U.S. households would have left each owing $15,586, and that was in 2008.
By comparison, the federal regulatory burden exceeded by 50% private spending on health care, which equaled $10,500 per household in 2008. While everyone pays some portion of these costs, the burden of regulations if far from borne equally. The portion of regulatory costs that falls initially on businesses was $8,086 per employee in 2008.
Small businesses, firms employing fewer than 20 employees, clearly bear the largest burden. As of 2008, small businesses faced an annual regulatory cost of $10,585 per employee, which is 36% higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).
The regulatory landscape highlighted here is from an updated analysis of the regulatory record explored in three previous studies for the Office of the Chief Counsel for Advocacy of the U.S. Small Business Administration.
With U.S. midterm elections now less than a month away, we encourage members to take a close look at those who seek their vote. Do they support policies that add to the burden? If they are currently in office, what is their record on key pro-business votes?
Even in congressional districts where incumbents hold what was thought to be “safe seats” it’s worth taking a second look. The voters are clearly upset and this might be just the chance to elect representatives who will oppose over regulation of small business.
Agree or disagree, your views are always welcome. Send your comments to Shortliner@FarmEquip.org.
A full copy of the report is available at FarmEquip.org/Shortlinks. ◆