Small business owners, trade association representatives, think tank scholars, congressional staff, and elected officials came together to celebrate 25 years of the Regulatory Flexibility Act (RFA). The RFA, designed to make sure that small businesses are considered during the regulatory process, was signed into law on September 19, 1980.
But, as I wrote last week, there is a long way to go. Firms with fewer than 20 employees annually still must spend $7,647 per employee to comply with federal regulations, compared with the $5,282 spent by firms with more than 500 employees. Small businesses face a 45 percent greater burden than their larger counterparts.
The RFA requires federal rule writers to consider alternatives that will lessen a proposed rule’s impact on small business. Perhaps this it is no longer enough to “consider” alternatives for small business when it comes to drafting legislation aimed at commerce in this country.
Given the importance of entrepreneurship in today’s economy, a new paradigm is in order. Rather than make a bureaucratic pass at “alternatives” for small business it may be time to view all legislation through the lens of small business.
Most new regulations that impact commerce in this country are big hammers aimed at large corporations. But, given the smaller and smaller role that large employers play in our current economy it is like we are trying to kill squirrels with nuclear bombs.
Here is my proposal. Let’s pass laws that consciously foster small business development, while considering alternatives to specifically regulate the largest of employers as needed. We have been trying the reverse for decades, with only limited success.
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