Thursday, October 07, 2010
Small businesses are responsible for creating the vast majority of jobs in the United States, but they incur a far greater burden than larger companies when it comes to federal regulations and laws.
Two researchers at Lafayette College examined the plight of American small businesses and found that those with fewer than 20 employees pay 36% more per employee to meet federal legal obligations than firms with more than 500 workers.
According to the report, the regulatory expense per employee for small businesses was $10,585, compared to $7,454 for medium-sized and $7,755 for large-sized companies.
“Environmental regulations appear to be the main cost drivers in determining the severity of the disproportionate impact on small firms,” reads the report from Nicole V. Crain and W. Mark Crain. “Compliance with environmental regulations costs 364% more in small firms than in large firms. The cost of tax compliance is 206% higher in small firms than the cost in large firms.”
-Noel Brinkerhoff
Anti-Small Business Laws Hobble Entrepreneurship and Jobs Creation (by Gary Shapiro, Huffington Post)
The Impact of Regulatory Costs on Small Firms: Summary (by Nicole V. Crain and W. Mark Crain, Small Business Research Summary) (pdf)
The Impact of Regulatory Costs on Small Firms (by Nicole V. Crain and W. Mark Crain, Small Business Research Summary) (pdf)
Comments