Small businesses have important economic role
May 18, 2011
York County (ME) Coast Star
National Small Business Week is a time to recognize the extraordinary contributions that small businesses make to the health and vitality of our economy. With more than 30 million small businesses nationwide — nearly 150,000 in Maine alone — these firms are the engines of our economy and our lifeline to emerge from this economic downturn. In fact, a full 97 percent of Maine companies are small businesses.
Generating two-thirds of net new jobs annually and creating over half of our nation's nonfarm private gross domestic product, small businesses are fundamental to our nation's identity and critical to our economic strength. Firms like Fiber Materials in Biddeford and Ocean Farm Technologies in Morrill, both recently recognized by the U.S. Small Business Administration for their innovative contributions to society, are leading the way in their respective fields, and are proud examples of Maine's entrepreneurial spirit. It is therefore imperative to promote governmental policies that create a climate ripe for small business growth and innovation.
As the top Republican on the Senate Committee on Small Business and Entrepreneurship, I make a point of telling my colleagues about the challenges, successes, and priorities of job-creating small business owners. Time and again, these entrepreneurs tell me the policies emanating from Washington are simply not conducive to business growth, especially at the levels necessary to meaningfully reduce the nation's unemployment rate.
I agree with these legitimate concerns and frustrations. From our dangerous $14 trillion debt level, to onerous federal regulations and outdated tax code, many federal policies crafted in Washington simply do not aid our job creators. The status quo will not pull us out of the current economic downturn, and the numbers speak for themselves. Between June 2009 and December 2010, the economy netted just 70,000 jobs total — a mere .06 percent growth in 18 months according to the nonpartisan Congressional Budget Office. That amounts to less than 4,500 new jobs per month for 18 straight months, when we require at least 285,000 new jobs per month for five years just to return unemployment to "normal" levels.
Supporting our nation's small businesses means freeing them from onerous and outdated federal regulations. According to job creators in Maine and around the nation, comprehensive regulatory reform is critical to their ability to grow, innovate and add to their payrolls. The $1.75 trillion cost of federal regulations is stifling economic growth and saddling small firms with fewer than 20 employees with a disproportionate cost burden that is 36 percent higher than the regulatory cost facing larger firms.
One need not look far to find alarming examples of overreaching regulations that fail to account for their impact on small business. A recent instance was the "proposed reinterpretation," from the Occupational Safety and Health Administration (OSHA) of its so-called "noise" rule. While I commend OSHA's end goal of preventing hearing loss due to high workplace noise levels, unfortunately, OSHA circumvented its obligation to convene a small business review panel and conduct a small business economic analysis on its proposal. The resulting proposed rule would have imposed yet another onerous layer to the staggering regulatory burden confronting small manufacturers when less costly and equally effective alternatives are available. Thankfully, in response to complaints from me and others, OSHA withdrew this proposal, citing the need to conduct more stakeholder support.
Commonsense regulations will support growth and prosperity among our nation's small business job creators, increasing the number of good paying jobs available throughout the country. In Congress, I have joined with Senator Tom Coburn, M.D., from Oklahoma to introduce the "Small Business Regulatory Freedom Act," legislation that would specifically require federal agencies to conduct comprehensive analyses of the potential impacts that regulations have on small businesses. This legislation was strongly supported by major small business groups like the National Federation of Independent Business, and the U.S. Chamber of Commerce.
Regrettably, the Senate Majority prevented a vote on this critical effort, foregoing a vital opportunity to address the serious impediment that inefficient and ineffective regulations are having on small business' job creation across our nation. Not surprisingly, a few days after denying that vote, the Department of Labor confirmed that unemployment continues to stagnate, increasing from 8.8 percent in March to 9 percent in April.
I hope my colleagues in Congress will join me in celebrating National Small Business Week this week, and every week, of the year by reflecting on the countless contributions small businesses make to our nation and focusing on initiatives that enhance, not inhibit, their ability to prosper, innovate and create well paying jobs for Americans.