Age of Overregulation
In light of the recent Supreme Court decision to decline hearing a challenge to a Seattle law that gradually raises the city’s minimum wage to $15, small business owners are facing hard times on the government regulation front.
Under the Seattle ordinance, businesses with more than 500 employees must raise the minimum wage to $15 an hour over a three-year period, while smaller businesses have seven years to phase in the raise. The law went into force on April 1, 2015.
The International Franchise Association (IFA) and five Seattle franchisees challenged the city’s minimum wage law, arguing that the law treats franchisees as large, national companies instead of small, locally owned businesses. The complaint also said the city’s ordinance was a violation of the Commerce clause of the United States Constitution.
The expanding scope and cost of government regulation are placing new burdens on America’s small businesses, hindering their ability to create jobs and drive economic growth, according to a new survey released by the National Retail Federation.
Nearly 60 percent believe proposed regulations to fine companies that allow flexible employee schedules due to changing worker demands or business needs would hurt their businesses. Overtime expansion proposed by the Labor Department would likely result in negative consequences for nearly half (44 percent) of small business owners, according to the survey.
And more than one-third (37 percent) of small retailers say raising the minimum wage to $15 per hour would either cause their business to fail or threaten its existence.
“Overregulation is undermining the resolve of small retailers,” NRF President and CEO Matthew Shay said. “To fulfill their role in driving the American economy, small businesses need the freedom to make the decisions that make sense for them instead of being burdened by one-size-fits all mandates.”
NRF worked with market research firm GfK to survey retail small business owners to gauge their views on the business environment, the health of their businesses and whether public policies that affect their operations support or hinder prospects for growth.
“It’s time for lawmakers, policymakers and candidates to take a hard look at how burdensome regulations are stifling America’s entrepreneurial spirit,” Shay said.
The survey revealed that while small retailers are generally optimistic about the future, they are increasingly concerned about the growing volume and cost of government regulations.
Among the key findings show:
• The vast majority (81 percent) say regulations weaken the appeal of owning a business.
• Nearly seven-in-ten (69 percent) say they are “overwhelmed by regulations, rules, and mandates,” including labor regulations, health care mandates, tax codes and safety guidelines.
• Less than half (44 percent) believe government regulations achieve their objectives.
Concerns were consistent regardless of political ideology and age, with majorities of conservatives and liberals, millennials and older generations saying they were worried about regulations.
The survey also looked at attitudes toward specific policies. Seventy-nine percent of small retailers support efforts to lower federal tax rates by eliminating tax loopholes, and 73 percent of small retailers are concerned by the complexity of the federal tax code.