Small businesses in America are struggling to stay afloat in the post-recession economy, but you’d have no idea after watching the State of the Union Address this week.
Unemployment numbers cited in the speech paint the American job market as the strongest it’s been in years. While the official number of unemployed Americans sits at 5 percent, a figure not seen since before the Great Recession, the statistic is skewed by the fact that the labor-force participation rate has plummeted to just more than 60 percent, a 37-year low.
A new poll of more than 400 small business owners released by The Job Creators Network illustrates the degree to which the reality diverges from the rosy picture laid out in the State of the Union. According to the poll just one in five of the business owners said they plan to hire new employees over the next year, while more than two thirds said they expect it will be more difficult for them to conduct business.
The cause of their turmoil? Overtaxation and overregulation.
Two-thirds of business owners said taxes threaten the viability of their businesses. Over 60 percent said recent government requirements do the same. Think about that. The biggest problem job creators face is not trying to get more customers or build a better product, but it is contending with government overreach.
It’s no wonder.
Data compiled by the Competitive Enterprise Institute shows that the regulatory burden on small businesses has exploded over the past two decades. The number of regulations published in the Federal Register shot up from around 4,300 in 1993 to more than 90,000 by 2014. Complying with these regulations costs small business owners thousands of dollars per employee. That’s money that could otherwise be used to hire more employees or expand a business, but is instead used to feed the regulatory beast.
The president even acknowledged the problem during his State of the Union, saying “there’s red tape that needs to be cut.” While these admonitions are all well and good, they are cold comfort to the thousands of people who lose out on career opportunities without meaningful government action to address the problem.
The Job Creators Network launched a major new campaign this week called “Bring Small Businesses Back” that seeks to do just that. We will work with actual small business owners to identify the taxes and regulations that affect them most and find solutions to correct their problems.
This week we ran commercials and print ads featuring real small business owners highlighting how government overreach affects their small businesses. We also released a comprehensive white paper that documents the true state of small businesses and the hurdles they face. Our ultimate goal is to pursue legislation that reduces the burden on job creators so that they can grow the economy, create new jobs, and increase our well-being. Check out DefendMainStreet.com to get involved.
Alfredo Ortiz is president and CEO of the Job Creators Network