What kind of government regulations are keeping businesses from hiring?

Obama

Minimum wage laws reduce hiring although they don’t keep businesses from hiring.

@GabrielsLamb Obama is not a regulation. Just thought you might want to know.

@I know… But he makes um. *Grumbles… Single mom’s go back to school and better yourselves my booty!

I am the proud unemployed owner of a $20,000.00 piece of paper.

@wundayatta *And you’re right, I just wanted to gripe about Obama. ♥

POINTS for vague pointless unrelated rant tolerance!

Okay, Okay… Here it the right answer…

http://lwd.dol.state.nj.us/labor/wagehour/lawregs/wage_and_hour_laws.html

@Blackberry I too have wondered. The talking heads constantly refer to “regulations destroying jobs”, but I have yet to hear a concrete example of how.

@GabrielsLamb There’s an “edit your response” button that allow you to continue a thought within the same post, rather creating multiple postings.

In the United States, statutory minimum wages were first introduced nationally in 1938 And are you saying that someone forced you to seek out additional education?

Note: if you are going to say that a regulation is preventing a business from hiring, you need to also show that the business would actually hire if it had the cash/time supposedly drained by said regulation.

To wit: corporations are sitting on a record amount of cash. But they’re not hiring. Regulations may indeed cost businesses money and time—but having lots of money and time does not lead to hiring in today’s economy.

@Blackberry Thanks for the info… WIll do! I didn’t know that it was frowned upon… Sorry!

I don’t think its as simple as that. The American consumer is worried and depressed. Nobody dares to spend what little they have so that in turn keeps companies from making more money and they haven’t seen much need to get more people.In fact they find it easier to lay people off and expect those who made the cut to take up the slack. They think if there was somehow a Republican in the WH business would magically pick up without anything else being done so in a way it is Obama’s fault.
Businesses almost need a guarantee everything is going to be alright first because they all know there will be no more corporate welfare in the way of big bailouts anymore. They have seen the last of that this last go-around. They want guarantees that capitalism by it’s very nature is not capable of providing. They have become chicken shit because socialism won’t be there next time. It smells of irony just a little bit.

The thing keeping companies from hiring is they’re afraid the economy isn’t going to pick up, or is going to tank… hence making the additional work force a waste or a continuing loss.

It has little to nothing to do with regulation. In fact if you stripped out all the regulation in the United States (and taxes for that matter), and made it even easier to pollute and just generally cause havoc here… It wouldn’t change the fact that in China they can pay their workers a tiny fraction of what they would have to pay them here.

So there’s your answer, you want to increase hiring via removing regulation… then you need to basically strip out the standard of living in America and put it on par with your average Chinese quasi-slave-laborer.

@syz No, no of course not, it was my decision ultimately as everything is, I feel that I was however lied to about it being at all beneficial, because it wasn’t.

What new regulations have businesses had to put up with, that haven’t been there for decades? It’s just an excuse. It was the lack of certain regulations that helped us all into the mess we are now dealing with.

@Blackberry

It may seem paradoxical, but “extending unemployment benefits” keeps people from being motivated to take jobs that they currently believe to be “beneath them”. I know of at least two middle-aged women who took jobs that they hated (one as a school bus driver, and one as a “management trainee” at a Taco Bell restaurant) because they hated accepting unemployment even more.

There aren’t enough like them.

In another sense, it’s not as simple as “regulations killing jobs”. Even employers who do need extra help are reluctant to hire “permanent employees” when there’s a lot of uncertainty about what rules and regulations may be coming their way soon. For example, every employer mandate represents a cost to be borne by an employer.

When it’s not certain what those employer mandates will be, what size companies they will affect and how they will be handled, then employers prefer to simply add more overtime to existing employees, or farm out or subcontract work where they can.

Supply does not create demand.

@CWOTUS, who are these employers of which you speak?

I keep hearing from right-wingers that employers are spooked by regulatory uncertainty. And yet when asked businesses say they’re not hiring because the economy is crap and they aren’t sure there will be enough consumer demand for their products.

Again: you are asserting that if businesses had more cash, or if businesses could be assured that they wouldn’t have to spend more cash on regulations, they would hire. There is absolutely no evidence to support this.

@Qingu :: There is actually thirty years history that proves them wrong.

@Qingu

“Right wingers” ... it’s always “right wingers”, isn’t it?

I’m not currently looking for a job, but just for shits and grins I plugged in my home town in Connecticut into a job search board and came up with 254 positions listed on one web site for multiple employers within about ten miles of where I live.

There are jobs available.

@CWOTUS I know where I’m heading next.

I think that is a bit of a myth. There aren’t any government regulations that prevent businesses from hiring.

To understand what regulation does, you need to understand how the economy works. When the economy slows down there are two schools of thought on how to stimulate demand. Either the government spends money on hiring workers or paying unemployment, etc. or you cut taxes. With either one of these the idea is to put more money into the economy which will drive more private spending thus creating more demand and consequently more hiring for expansion. Overly simplistic but that’s the idea, inject more money into the economy.

Regulation on the other hand does just the opposite. It pulls money out of the economy. Regulation does not create any product improvement nor efficiency in production but only additional cost. The Small Business Administration has estimated that new regulation will cost $1.75 trillion annually. They said “The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008. Had every U.S. household paid an equal share of the federal regulatory burden, each would have owed $15,586 in 2008. By comparison, the federal regulatory burden exceeds by 50 percent private spending on health care, which equaled $10,500 per household in 2008. While all citizens and businesses pay some portion of these costs, the distribution of the burden of regulations is quite uneven. The portion of regulatory costs that falls initially on businesses was $8,086 per employee in 2008. Small businesses, defined as firms employing fewer than 20 employees, bear the largest burden of federal regulations. As of 2008, small businesses face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).”

In contrast Obama’s stimulus package cost about $850 billion. The regulation simply pulls about twice as much out of the economy as stimulus puts in. Is there any wonder Stimulus didn’t work?

There are thousands of new regulations slated for the next few years as a result of Obamacare, Financial legislation such as Dodd-Frank, and the EPA. A good example would be the EPA regulations for limiting CO2. It is estimated that electricity will double in cost over the next few years. This will rob resources from business but also from consumers. Consumers will simply have less money to spend as they are drained by these skyrocketing electricity costs. To compound the problem goods and services will become more expensive as business struggles to pay thier own increasing energy costs. Coal fired plants will be shut down eliminating jobs as well as increasing costs for those that remain. We simply can’t inject enough money into the economy to compensate for this flood of regulation.

Regulation is like traffic lights. It may appear to slow things down but without it there would be chaos.

Regulations build trust and confidence. Without trust and confidence, no one will invest in anything. Think of regulation as an infrastructure investment. Without federally funded highways, there would be no over-the-road freight transportation (which might be a good thing, but that’s another conversation). Without federally funded airport, no airline flights. Without regulations of all kinds, many industry sectors would be operating at a much diminished and much less efficient level.

Regulations cost, but lack of regulation costs a whole lot more. Just look at the recent financial crises to get an idea of how much the elimination of certain regulations cost us.

@CWOTUS, your post is in no way a response to mine….?

@Jaxk, you’ve been repeating this point over and over again on Fluther.

• You own a gas station. If you had less regulations to deal with, would you hire more workers? Why or why not?

• You cite the small business administration’s costs of regulation, but in another thread you’ve ignored the EPA’s estimates of regulations’ benefits. Why do you think it’s honest to simply deal with the cost of regulation and not address their benefits?

Also, scapegoating “regulations,” as if regulations were monolithic, is pretty inane. There are obviously a lot of stupid regulations (one of which @Jaxk had complained about… and Obama has instructed the EPA to do away with!). There are also obviously a lot of really important regulations that are probably necessary for businesses to do business in the first place.

I challenge people complaining about regulations to cite specific regulations that they think are harmful or wasteful. @Jaxk cited the EPA’s imminent carbon regulation… of course, Jaxk doesn’t believe in global warming, so that might explain why he doesn’t think such regulation is important. His ownership of a gas station may also influence his views on the benefits of moving away from a fossil fuel based energy infrastructure.

@Qingu

This will be my only response to your post. If you want to argue that the EPA regulation is necessary to save the world, then go ahead and make that argument. But be aware there is a substantial cost to the economy involved. Your statement:

“There are also obviously a lot of really important regulations that are probably necessary for businesses to do business in the first place.”

Makes it very apparent you know virtually nothing about regulation. You are like the little kid that continuously asks “why”. Not because he wants an answer but only because he knows it will get a response. It won’t

Restrictions against hiring undocumented aliens.

That went about how I expected it to go. I think your non-answers speak for themselves, @Jaxk .

Perhaps this will be illustrative.

Here’s a short list with some pretty specific examples.

@Jaxk A few points to note while skimming your posts.
-The stimulus bill was $787 billion. Not the $850 billion you posted, or the $800 I’ve heard other conservatives list. The number seems to creep higher as time goes on, but fact of the matter remains it was $787 billion.
-You’re trying to pin the failings of the stimulus bill on regulation, so from here on out in further threads I will remember that you said the stimulus would have worked if not for regulation.
-The Dodd-Frank bill re-enacted some of the financial regulations that stood since the market collapse that caused the Great Depression. Those regulations were put in place to prevent huge market crashes, and slowly over the course of the 90’s and early 2000’s they were stripped away… and what do you know, the market cannibalized itself again! Even more stringent financial regulations stood from the 1930’s until the 1990’s, and they didn’t seem to slow things down too much.
-You honestly think the cost of energy going up has anything to do with EPA regulation? How about the fact that our entire energy infrastructure is cornerstoned on increasingly rare and difficult to acquire fossil fuels, that are controlled by money-grubbing multi-billion dollar corporations? That didn’t factor in at all?
-Regulations in Obamacare, like not being able to deny coverage based on pre-existing conditions? Or not being able to make people suffering from potentially fatal illnesses jump through hoops just to have their medical bills paid? Or how about regulations keeping insurance companies that have virtual cartel-monopoly situations in some states from railroading their customers on the prices? Yah those are pretty horrible regulations.

You sit here and whine about government regulation killing businesses, and frankly I find that laughable. The regulations are keeping Big Businesses from killing us…. They’ve fooled you and millions of others into thinking regulation is un-american and bad for small businesses and small people with their billion dollar campaigns (ya wanna know who pays for the majority of the Tea Party???... look up the Koch brothers).

@CWOTUS I’m not sure if you were trying to be ironic, but the article you linked lists how existing businesses are pushing regulation to keep new businesses from establishing themselves. That would be government under the control of business, regulating as they are told.

The government is of the people/for the people and no one seems to understand this. If you elect people who are in businesses pockets, they’re going to do things that help those businesses.

I still haven’t seen any evidence for the fundamental assumption that Jaxk and CWOTUS are making: if businesses had more money, they would hire more workers.

Why do you guys think this is true in today’s economic climate?

Is it true for your business, Jaxk?

@tedd

It’s not at all ironic. Big business often colludes and conspires with big government to create artificial barriers to entry for new competition.

@Qingu

Did I make that assertion?

@tedd

The CBO estimates the actual cost of the Stimulus Bill to be $821 Billion. Down from their last estimate of $864 Billion.

The Stimulus bill failed for lots of reasons. Regulation is but one of them. Unfortunately it was poorly conceived and even more poorly implemented. It never had a chance.

You obviously know little about electricity since the bulk of it is generated with coal. Nothing rare about coal, we have the largest coal resource in the world. And it’s cheap. Only about 1% of our oil is used for generating electricity. The EPA is going after coal.

Obamacare is creating a lot of uncertainty while we wait for SCOTUS to strike it down. There were lots of ways to improve our health care system constitutionally. Obamacare isn’t one of them.

Overall it you think people are whining about not having jobs. That seems to be a common Democratic theme. Pass a bunch of poorly thought out legislation based on ideology, that kills job creation, blame the failure on others, and then tell them to stop whining. The truth is we could solve most of this quickly if we got government out of the way and let the country create jobs. Instead we’re stuck in this war of ideologies that is destroying jobs. And for some godawful reason we seem to think that more regulation will solve our problem.

If you want to start a new business, just finding out what regulations apply, requires a team of lawyers. and that doesn’t even count the cost of compliance. here is another example of ridiculous regulations.

@CWOTUS, the assertion underlies your argument. Regulation is bad because it takes money away from businesses, right?

@Jaxk, why do you think the stimulus was a failure? It created or saved millions of jobs.

Why are you tying regulation to the stimulus bill?

Why are you continuing to assert that lessening regulation will create jobs without offering a shred of evidence to support this assertion and without even answering whether you would hire more workers in your own business?

Just saw this on Ezra Klein. Look at the last graph.

http://www.washingtonpost.com/blogs/ezra-klein/post/regulations-arent-to-blame-for-the-uncovery/2011/08/25/gIQAIuuCAL_blog.html#pagebreak

Basically, survey of small businesses asked what’s their biggest problem. Over the past 50 years small businesses have fairly constantly said taxes were problem #1, followed by regulations. Guess what’s suddenly spiked as problem #1 now? POOR SALES.

Lack of hiring is not a supply side problem.

Thanks for introducing me to the Economic Policy Institute, @Qingu.

If their advice is as accurate as their assessment of themselves as nonpartisan, I can’t wait to drink their Kool Aid. After all, a Board of Directors made up of union presidents, academics (including Robert Reich) and sociologists can’t be anything but representative of all of us.

The Economic Policy Institute did not conduct the survey I mentioned. That would be the National Federation of Small Businesses.

And if you would like to actually argue against their findings or show how their findings reflect bias, please do so. Believe it or not, “You’re a liberal!” is not generally considered a valid point to make in these kinds of debates.

@CWOTUS

As much as I hate to do it, I’d agree with @Qingu that merely saying it is liberal (while accurate) should be followed with an explanation as to why it is erroneous/skewed/incomplete/biased/etc. It is interesting that liberals would see little connection between business investment and jobs. And of course they will use selective statistics to try and show why it doesn’t matter.

Mankiw explains in the NY times, “From the economy’s peak in the fourth quarter of 2007 to the recession’s official end, G.D.P. fell by only 5.1 percent, while investment spending fell by a whopping 34 percent.” then goes on to say “The subpar recovery has coincided with a historically weak investment recovery. Compare our recent experience with that of the early 1980s, when the nation last experienced a deep economic downturn in which unemployment topped 10 percent. That recession ended in the fourth quarter of 1982. In the subsequent two years, investment spending grew by a total of 54 percent. By contrast, in the first two years of this recovery, it grew by half that amount.”

So by using investment as a percent of GDP you can insinuate investment is normal even though it is way down because GDP is way down. Just another statistics trick.

“The great economist John Maynard Keynes suggested that investment spending is in part determined by the “animal spirits” of investors, which he described as “a spontaneous urge to action rather than inaction.” Recessions occur when optimism turns to pessimism, and businesses are reluctant to place bets on a prosperous future. Recovery occurs when investor confidence returns.”

All this of course is affected by the regulation that is damping the business climate (as well as most of the other Obama policies). It might also be significant to note that all three indicators on the last graph turned up during the Obama period. Since these are the three biggest problems it would seem they all would play a part. I also can’t help but wonder what fell off the list as these three rose.

@Jaxk, you didn’t respond to the points I actually brought up.

Small businesses have been complaining about regulations fairly constantly since the 70’s.

Since 2008 small businesses have been complaining much more about poor sales.

Why would a business hire if their number 1 problem is poor sales, @Jaxk?

Jaxk, somehow fluther deleted my longer response, so I will reply in short.

As far as business investment goes, please see this chart: http://delong.typepad.com/.a/6a00e551f08003883401539156fe8a970b-pi (note: in terms of real GDP, not %)

Business investment has bounced back. Where is the fear of regulation? It appears that are GDP problem is not a business investment one but a residential investment one.

Mankiw’s explanation of the bounce back in 1980 vs the lack of bounce back now is supposed serve as evidence that something is different this time. He is correct there. However, the difference is not the regulatory regime. The 1980 recession was caused by Volcker raising interest rates in order to drive down out of control inflation. This caused a nice pent up supply of investment and consumption. Once inflation was under control, interest rates were lowered and investment and employment came roaring back. To compare this to the current downturn, where interest rates have been at zero for all of recent memory, is to compare apples and oranges. This is all based on the macro I learned in undergrad which was based on Mankiw’s book.

As to your point that all three indicator’s tick up during the “Obama era”, I’d say it is fairer (given the low resolution of the x axis) to claim that these all ticked up during the post financial crisis era. Of course they ticked up. Is anyone denying that we are in a down economy? All weights on business expansion will be percieved to be heavier under such conditions. However, the fact of the matter is that the uptick in lack of customers has vastly outstripped the other factors.

I’ll be honest. I like to give conservatives the benefit of the doubt in discussions. I like to try to see where the blind spots in my own thinking are. But, when I see arguments like this, which are repeated ad nauseum without evidence, I become wary. When I see counter evidence along the lines of the recent study showing unregulated uses of coal for electric (even under extremely modest cost models) cause more economic harm then good, I begin to get annoyed. Finally, when I see studies that actually look at regulations and show that there is most likely no harm to employment from regulation and, at worst, damage of miniscule amounts in exchange for greater safety, I start to get angry. This business has got to stop. Unless there is stronger evidence available, I suggest we all agree that regulation is a necessary evil in making our incredibly complex economy work. We should all keep an eye on it and make sure it is working as well as it can.

Beyond that, let’s get to work on something else. We have bigger fish to fry.

Let me please hopefully get an answer to maybe a dumb question. Please forgive me if it is.

During the Clinton years it seemed that millionaires were being “born” in good numbers along the way. Unemployment was low. The deficit was under control and headed toward a surplus.
The corporate tax rates were a bit higher then.

Exactly what did we screw up to make all that happen?

We started two wars, mostly.

@woodcutter

We created whole new industries. The advent of the personal computer and the Internet changed the way we live and do business. In the 80s nobody had a computer at home by the end of the 90s everyone had one. In the early 80 there was only 1 telephone company, AT&T. By the end of the 90s there were hundreds. In the 80s no one ever heard of the Internet. By the end of the 90s everyone was connected. In the 80s 9.6K was considered high speed. By the end of the 90s we had sped up by an order of magnitude. In the 80s software was a term used by geeks. By the end of the 90s everyone was shopping for the latest software update.

New industries such as the PC industry had a vast new market. Telecommunications networks had to be built from scratch. Software companies sprung up everywhere with vast new markets and ideas to leverage the growing PC market. Basically it was comparable to the industrial revolution. It wasn’t government that did all this but rather innovators like Steven Jobs, Bill Gates, and Vint Cerf. It was exciting times for those in the industry and that industry drug the rest of the country with it. By the end of the 90s that market was saturated and the tremendous growth turned into maintenance and replacement mode. Still a good industry but the growth of the 90s simply can’t be maintained. We ran out of gas in 2000 and dropped into recession.

But how did we create a budget surplus, if it was really that? Because that problem seems to be the big complaining point now. If not for that, what would the right be griping about? I think maybe a small piece of the puzzle was that there were insane tax breaks handed out like crack on the corner without some cuts to offset them. Seems to me that something in the 90’s was dismantled which started causing things to go to crap.

Ah, I misread your earlier question, @woodcutter. I thought you were asking “what did we do to screw up the budget surplus?” and you were asking “how did we achieve a budget surplus?”

Okay. For one thing, we had ended the Cold War before Clinton took office, so Defense expenses were never going to rise like they had in the 80s. As @Jaxk mentioned, we had whole new industries growing and producing revenue and paying wages and capital gains that could be taxed.

And in order to have a “budget surplus” it means that “taxes are too high”. Once there was a surplus, then there are all kinds of “needs to be met” to eat it up, even though we nominally “ended Welfare as we knew it”.

@woodcutter

The tremendous growth created much larger tax revenues. In addition Clinton raised taxes, which boosted revenues even more. The economy was in such a growth mode that the higher taxes had little affect on the economy. And of course he lowered the Capital gains tax in 1997 from 28% to 20%. The other piece of this that is seldom mentioned is that Clinton (or congress) reduced the rate of spending. Spending went from about 22% of GDP to 18% of GDP. Still huge considering GDP was huge and growing. About half that reduction was defense and the other half was general government.

@swuesquire

Good response. I appreciate a well thought out argument. I don’t have a lot of time right now and will be in and out all day but I do want to respond since you make a rational argument.

First, I’m not disputing that demand is down. Hell, we’re in a recession, of course demand is down. The question is what can we do to spark higher demand. We will likely disagree on the spending since Keynesian economics recommends more spending to spur the economy. Many believe in Keynesian economics and some are skeptical. I happen to be a skeptic.

Henry Morgenthau, Jr. was FDR’s Secretary of the Treasury from 1934–1945. In testimony to the Ways and Means committee in 1939, he said “We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!”

It would appear, I’m not the only skeptic. So if we want to spur economic growth, I would contend that the best way to do it is through private investment. In the 80s they were able to reduce interest rates and spur investment. Of course they also reduced tax rates which added more money for investment. We have reduced interest rates as far as we can go. But it hasn’t spurred investment. Money is cheap, but hard to get. Cracking that nut would go a long ways to helping the economy.

I don’t know what studies you read since you didn’t post any links. But I look at things like the Delta Smelt Controversy as a good example. EPA regulations have mandated that the pumps sending water to the California Central Valley be shut down starving the valley of crops and jobs. Communities in the Central Valley have seen unemployment rates topping 50% and real breadlines. The central Valley supplies (or did) 25% of all fruits and vegetables for the country. The shut down has not only cost us jobs and tax revenue but has forced the importation of fruits and vegetables from Mexico sending even more money out of the country. Vast farm lands lay waste.

This is but one of my favorite regulations. I have a few more if there’s interest.

Finally something that @Jaxk and I agree on! He quotes Keynes as saying, ”Recessions occur when optimism turns to pessimism, and businesses are reluctant to place bets on a prosperous future. Recovery occurs when investor confidence returns.”

Well, actually, for me, this is only part of it. It also depends on consumer confidence. And I think investor confidence follows consumer confidence. When consumers start to buy again, investors will gear up again, because they see they can make money. When they gear up, they will need employees, and this will fuel more consumption.

But everyone is waiting for confidence to be restored. On NPR this morning, I heard that most business owners are not waiting for the election to see what happens. I guess the implication is that if Obama is reelected, confidence will return, and business owners will start investing again.

I seriously doubt it will happen that way. Until consumers return to the market with great energy, the economy will remain anemic. No business person is going to invest unless they think people will be buying again. Why would they?

@Jaxk, I still haven’t seen you address this.

I accept that businesses could save money if there weren’t so many regulations.

Can you show that businesses with more money would actually hire more workers today?

You’ve been repeating, over and over again, “regulations cost businesses money.” So what?

@Qingu

See my post above. That one ruling cost an estimated 90,000 jobs. And also this independent study that shows “The cost of regulation results in an employment loss of 3.8 million jobs” in California alone.

1. That’s not what your source says (it says “threatened,” not “lost”)

2. Your source is a blog, that quotes a plaintiff’s argument in a suit.

3. That doesn’t address my question to begin with.

Let me put it this way: do you agree that “businesses having more money” does not necessarily lead to more jobs?