Regulations Cost $35k per Employee

Stop the insanity: Federal regulations cost Small Manufactures $35k per employee.

Manufacturing leaders, like many other Americans, have been frustrated with the slow pace of growth so far this year, particularly in the first quarter.

In the NAM’s most recent analysis, 85 percent of manufacturers surveyed said they would invest more in their businesses, both in their workers and in capital equipment, if their compliance costs could be lessened.

Wednesday, the National Association of Manufacturers (NAM) released a study, that finds that 88 percent of manufacturers see regulatory compliance as a top business challenge.

The burdens of regulatory compliance fall disproportionately on small businesses, particularly small manufacturers, largely due to issues of scale.

The latest NAM study finds that compliance costs for businesses in the United States averaged $9,991 per employee that year, with manufacturers incurring a per-employee cost of nearly double that amount, at $19,546. Small manufacturers with less than 50 employees spent a whopping $34,671 per employee, illustrating the massive burden placed on many of these firms.

We need smarter regulations that minimize unnecessary burdens and better balance benefits and costs, eliminating redundancies wherever possible.

In the NAM’s most recent analysis, 85 percent of manufacturers surveyed said they would invest more in their businesses, both in their workers and in capital equipment, if their compliance costs could be lessened.

While regulations are often well-intentioned, manufacturers and small businesses face higher compliance costs from many of these actions. With that in mind, we ask that policymakers look at the larger regulatory landscape before imposing new burdens that will stifle growth and dissuade new investments.

 

photo credit: Dollar Crisis via photopin (license)

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