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Government Policies Hurting Job Creation, Particularly Small Business


Government Policies Hurting Job Creation, Particularly Small Business
Overregulation and bureaucracy partly to blame for sluggish recovery 

(Washington, D.C.) – The 2007-2009 recession brought about a large drop in employment and an unprecedented decline in business creation. Flawed policies advanced by the current Administration that focused on massive government intervention have actually served to slow a recovery. A study released last month by the Federal Reserve shows small businesses are disproportionally impacted, experiencing a drop in employment 5 to 10 percent greater than in larger firms. Much of that impact was due in part to financing constraints and the lack of available capital that resulted as a result of investors and lending institutions losing confidence and certainty in the market place. According to experts, restrictive government policies like the Affordable Care Act, also known as Obamacare, have caused these confidence issues and debilitating confusion among small business owners whom are less inclined to make additional hires or equipment upgrades due to the anticipated increases in future costs associated with employees. 

The drop in the startup rate of business from 15 percent in 1970 down to 8 percent in 2011 is an indication of this trend. Not only are fewer businesses being created but a high number of them are also going out of business in their first year: more than 27 percent of new ventures failed in 2011, up from 20 percent two decades prior.

Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement: 

"Over the past seven years, we have been suffering the crushing effects of an economic recession still being felt across our nation, especially by America's middle class. Businesses continue to be strangled by bureaucratic red tape and new government regulations, leaving many small business owners to accept the current economic situation as the new normal. 

American small business owners have had to demonstrate resiliency in enduring the economic downturn by cutting down costs, turning to technology and even making personal sacrifices. This is especially true of the country's Hispanics who continue to create business at higher rates than the nation as a whole. Still, Americans continue to endure additional hurdles in the way of mandates handed down by politicians convinced that Washington knows best. This approach impedes the drivers of the economy at a time when America's entrepreneurs need the freedom to expand and create opportunity for all Americans. If we want to see a real economic boom, Washington needs to work together to ease the regulatory and tax burden, increase the development of our energy sources and advance policies that unleash the vast productive and innovative capacities of the American people."

For interviews with a LIBRE representative, please contact: Brian Faughnan, 571-257-3309 or Steven Cruz, 202-578-6173