Not all regulation is necessary. According to the U.S. Chamber of Commerce Foundation “final federal agencies small business regulations have increased to more than 88,000 in the past 22 years. Of these rules, 15,458 have been identified by federal agencies as having a negative impact on small businesses.” The issues with over regulation in hiring practices has caused small business new hires to inflate to $11,700 a year per new employee.
These regulatory practices are not all federal level issues. According to The Foundation, regulation costs include red tape, compensation and unemployment insurance laws, and local, state, and federal licensing rules. What makes this issue more alarming for the country is that these high costs are only affecting small businesses. According to Small Business Trends “the costs of regulation to smaller businesses with 50 employees or less are nearly 20 percent higher than they are for the average firm.”
The US Chamber of Commerce Foundation’s report “The Regulatory Impact on Small Business” is a must read for politicians looking concerned about the future of small business. Government is definitely over reaching in terms of business hirings and something must be done to combat this. Tax cuts are a good start, but they do not affect the hiring process. More targeted legislation must be enacted to ease the burden of unnecessary small business costs and soon.