Frustration With Feds Leading To Off-shoring?

By Darrin Tonsfeldt, The Village Business Institute

The Dow hit over 12,000 yesterday (Feb. 1, 2011), which seems to indicate the financial strength of a number of U.S. Companies is improving (i.e. Ford Motor Company, Hewlett Packard, General Electric, etc.).

So why are job creation and the return of better paying jobs not keeping pace with those improvements? There are some who think job growth is lagging due to the economy not growing fast enough [U.S. economy growing, but jobs still lag, Jeanine Aversa, 1-29-2011, Associated Press].

While this may be true, I also think business owners and financiers are increasingly frustrated with ever expanding U.S. federal bureaucracy and are simply taking their business (job) development off shore, or just choosing to not expand their businesses.

One example of this was a local small business owner who decided to contract his business, rather than expand. This entrepreneur had created a successful business and had grown his employee base from a handful of folks to a point that he now had to deal with often confusing and contradictory federal bureaucracies. He had always had to contend with FLSA, but now he had to contend with ADA and FMLA rules, and a litany of other regulations imposed upon him by the likes of the DOL, EEOC, OSHA, DOT and more.

This particular small business owner said the bureaucrats often treated him like a criminal, rather than someone who had taken risk and created jobs. So rather than grow his business he decided to pull back. This was not an easy decision—he liked his business, he liked providing jobs, and, yes, he had made a fair amount of money. But the stress, headaches, and frustration with a lack of consistent and fairly-applied regulations became to much and he decided to contract his business. Unfortunately this is not a rare situation.

So why should we care? Because it is the small business person, often claimed to be the lifeblood of the U.S. economy, that creates a large share of the employment opportunities in the U.S. According to the Small Business Administration, 65% of net new jobs over the past 17 years were created by small firms. Those small firms need a stable and fair regulatory environment in order to grow.

It is easy to blame the bureaucracies and look at their employees as entrenched and entitled–and with the singular mission of creating job security for themselves. Yes, there are certainly some less-than-competent federal employees, but placing all of the blame on them is very short-sighted.

The responsibility ultimately rests with our Senators and Congressmen who pass laws without real consideration for the consequences of those laws—just because they looked like a good idea at the time.

In order to create good jobs in this country, we need to insist that our legislative leaders not add more laws but rather focus their attention on creating a fair and more consistent regulatory landscape—one that ensures employers are rewarded for creating jobs, and that employees are fairly paid and protected.

How many bureaucracies and regulations do we really need to do that?