Recent deregulation efforts have had a positive affect on small business optimism, but there’s still work to do.
In a 2017 survey conducted by NFIB, 25 percent of small employers considered regulations a “very serious problem” while another 24 percent said regulations were a “somewhat serious problem.” That same survey reported that 51 percent of small business owners experienced an increase in regulations in the last three years.
“Small business owners are disproportionally impacted by regulations,” says Karen Harned, Executive Dir. of NFIB’s Small Business Legal Center. “They can’t absorb the costs like a big business does. Whereas the cost to a larger business is going to be substantially lower, the regulatory cost is $10,000, $11,000, or $12,000 per employee, depending on what study you’re looking at, for a small business.”
However, the Trump administration has taken significant steps to deregulate—steps that have unleashed growth and prosperity for small businesses. Here’s a look at the progress made to date.
Steps to Roll Back Regulations
The Trump administration has taken significant steps to roll back regulations. Government agencies have withdrawn or delayed a total of
“The Trump administration has stopped the uncertainty of regulations coming out of Washington,” says Harned. “It was very clear under the Obama administration that they were going to be very aggressive promulgating regulations. So, our members literally didn’t know what was happening next or what new regulations were coming out of Washington. As a result, they just sat on the sideline. Ever since Trump was elected, it was clear he was going to pull back on regulations.”
By working to help inform and advise the White House on issues that impact small business owners, NFIB has continued to create positive change for small business. Earlier this year, the persuader rule was rolled back. The rule required business owners to publicly report any communication with outside consultants or legal counsel about employee relations or union organizing to the DOL.
“While a big business has in-house counsel that can provide legal advice on union issues, small business owners don’t,” Harned says. “Small businesses would have been hurt because there would have been nobody they could turn to when they had even basic questions, including what they can say to employees about unions.”
With a major win under the belt, NFIB continues to push for repeal or amendment of other Obama-era regulations like the Waters of the U.S. Rule, the joint-employer standard, and the Clean Power Plan rule.
Affect on Small Business
While deregulatory results are pending, the result of recent deregulation efforts is clear when it comes to the rise in business optimism numbers.
“It’s a two-part thing,” Harned says. “In addition to rolling back regulations, [the administration is] not issuing new rules. The decrease in regulatory burden was huge and, I think, that was responsible for the original jump—there was a direct correlation between the Optimism Index and the deregulatory effort.”
While there has been significant progress to deregulate, there’s still work to do. With the midterm elections approaching, it’s important to keep in mind that every voice and every vote counts.
“If there’s a change in Congressional leadership, you will start seeing a lot of new legislative priorities that are going to be quite harmful for small business,” Harned says. “And a lot of them are in the labor regulatory space. Maybe we will fight them back and successfully win, but that’s really not the part of the field we want to be playing on.”