Think back to when you were a kid growing up in your parent's house. Too young still to go out and get a part-time job, you use some budding entrepreneurial instincts to work out a deal with your parents and other neighbors to help out around the houses and yards on some small tasks in exchange for some spending money. So far, so good.
But now what if your older, bigger brother decides, under threat of physical force, that he is going to "regulate" your fledgling endeavor? In addition to a handful of different taxes to keep him off your back, he institutes a variety of ways to fine you to increase his share. Conduct your chores using the wrong equipment, during the wrong hours, in the wrong order, at the wrong houses, or competing against his buddies, and additional fines come your way. It'd be enough at that point to just forget about it and stick to playing video games.
Welcome to the current world of running a business (or trying to). It's an era where our collective Big Brother has shifted posture from a protector to, in some cases, a bully.
The new era of regulations aimed at businesses is unprecedented.
While many of us are impacted by growing regulatory threats from the National Labor Relations Board or Environmental Protection Agency, consider the anatomy of an example from the Occupational Safety and Health Administration. The Obama administration seems to believe that measuring the amount of fines levied and the number of enforcement agents on the government payroll is somehow evidence of safer, fairer workplaces.
That answer is a perfect summary of the attitude the current administration has adopted. Under Presidents Clinton and Bush, OSHA worked more cooperatively with business and had a broader view. They did 'consultative visits' visits which were designed to educate and correct deficiencies during a first site visit so that the first priority was an open dialogue about improving worker safety. Any future scheduled or surprise inspections that showed a lack of compliance from the consultative visit were dealt with especially harshly. That is as it should be.
The good news was that paradigm worked—the trendline for reportable cases to OSHA has decreased steadily. But instead of sticking with what works, the administration has changed the system from help-first to fine-first with an enforcement-heavy view. Business owners we don't even get a first pass or guidance. Every business begins with two strikes and the ball is already half way to the plate.
Think of the impact as the difference between a felony and a misdemeanor. Every government inspector approaches their work now as if businesses are not just guilty, but that we are deliberately trying to break their increasingly onerous and bewildering regulations and probably are covering up other actions as well. It is as if we are merely organized conspirators, rather than honest Americans trying to run a business to feed our families and contribute to the community.
Ironically, this will lead to less-safe workplaces, as employers will be unlikely to want to seek out connections with OSHA and may accidentally run afoul of more important measures to protect employees. And it will, at a minimum, force employers into more costly litigation against the government—money that could be going to hiring, training, and ensuring the safety of employees.
The worst part: this OSHA example is indeed just an example.
A recent Heritage Foundation examination of regulations found at least 75 new major regulations on businesses, whose cost of compliance is estimated to be $38 billion annually. A look at the overall numbers shows that the Obama administration has added roughly 10 new regulations a week since taking over the beginning of 2009. A quick Google news search for OSHA will return pages of stories of fines being levied against companies just in the last few days, and that doesn't even include the scores of other agencies with increasing regulatory power.
While it's hard for some to understand, or remember, the simple equation is that unnecessary regulation (especially hostile rules) kill jobs. Lower regulation would mean a better chance at job growth and economic recovery.
The American economy was built and runs on the back of small business owners. We are the ones who employ a majority of people and give millions the opportunity to generate wealth. Any hope of an economic turn-around rests on business owners succeeding, which is near impossible when all energy is being directed into trying to stay afloat in a regulatory hurricane. It's almost as if the government is begging entrepreneurs to outsource their labor overseas, or maybe to forget it and just sit at home and play video games.
Brett McMahon is president of Miller & Long DC, Inc., a concrete construction contractor, and spokesman for the Halt The Assault campaign to expose over regulation in the workplace.
