Multiple Surveys Show Regulations Not Major Concern to Small Business

October 31, 2011

The current jobs crisis is being used as an excuse for rolling back the nation’s public protections. However, most small business owners don’t cite regulations as a major problem for their businesses or as a disincentive for hiring. According to recent surveys, the biggest problems facing small business are the current lack of demand for products and services and worries about when demand will pick up.

The Small Business Majority (SBM) recently released a report, Small Business Owners Believe National Standards Supporting Energy Innovation Will Increase Prosperity for Small Firms,” which found only 13 percent of small business owners believe regulation is the biggest problem facing their businesses:

“When asked which factors most negatively affect business, the results were clear. Contrary to arguments that ‘regulation’ or ‘taxes’ are what mostly ail business owners today, economic uncertainty and the rising costs of doing business are ranked by entrepreneurs themselves as the biggest problems facing small business,” according to the SBM.

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McClatchy/Tribune News Services recently surveyed a random sample of small business owners nationwide and found Big Business rhetoric over regulation to be completely overblown:

“McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.

Their response was surprising.

 None of the business owners complained about regulation in their particular industries, and most seemed to welcome it.”

The National Federation of Independent Business (NFIB) periodically asks its members, “What is the single most important problem your business faces?” During the Obama administration, the number one response – with nearly 30 percent – has been “poor sales.” Only 13.9 percent have identified “government regulation” as the most pressing concern.

These figures come from an Economic Policy Institute analysis of NFIB’s entire historical series (back to the fourth quarter of 1973) on this survey question; EPI constructed averages for each presidential term. It turns out that small businesses have always identified regulation and taxes as concerns, but this concern has not changed sharply under Obama. The concern about regulation under Obama (13.9 percent) is not substantially higher than under George W. Bush (9.9 percent and 11.0 percent) or Ronald Reagan’s second term (12.8 percent). There is also less concern about regulation under Obama than there was under Bill Clinton (when job growth rose sharply) or George H. W. Bush. The distinguishing feature of this historical series is the recent jump in NFIB members identifying poor sales as the single most important problem facing small businesses.

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Even the U.S. Chamber’s own survey of small business shows small business owners do not name regulations as a major cause holding back job growth:

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