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Regulations: too many to be all good

The original intentions behind regulations were to address market failure, promote economic and social welfare, or advance other goals of policymakers, but even regulations with the best intentions have raised concerns for their unintended consequences. Additionally, many federal and state mandates have been reactive in nature, instead of forming or contributing to a coherent government strategy.

The reach the impact of regulatory bodies has had is immense. Small businesses feel the weight of the regulatory burden at the local, state, and federal levels, massive corporations base location and expansion based on regulations, and the sum total of regulation has led to slowed growth and competitiveness of many countries. Regulations impact a lot.

Take the occupational licensing regs of today. These requirements serve as a barrier to entry into the market, just as they were intended to decades ago as a response to racial or ethnic prejudices. are the legacy of earlier efforts to protect profits by limiting entry to the market. Modern occupational licensing is branded as necessary for quality control, but still works to protect the earning power of established providers. This is harmful to small businesses and entrepreneurs, and has recently been an issue with hair braiding at home.

Remember the EpiPen price scandal? The ridiculous price increase that left many in danger of serious complications from allergic reactions was possible because of regulations. There were few substitutes for EpiPen, which shielded it’s supplier from competition and allowed for a drastic price increase to around $600.

Some regulations and regulatory bodies are good and necessary. But when the Code of Federal Regulations has grown to 175,000 pages, and the small state of Delaware’s regulatory body alone includes 104,562 restrictions and would take 9 weeks to read in its entirety.

In normal times, state and federal government should examine their regulatory body and ask businesses for their perspective. Businesses are beholden to a high standard anyways if they want to keep customers, and too many regulations make it near impossible to make clear their margins, hire workers, or even get started in the first place.

Now, as we recover from the impact COVID-19 has had on our businesses, workers, and economy, our legislators must seriously consider the impact their policy decisions will have on rebuilding what was lost in 2020. In many cases, reducing and eliminating  current regulations that are job killers could help some small businesses endure the crisis. The recovery of small businesses and jobs will spawn economic growth and a healthy job market.

Below is a list of some examples of just the regulatory bodies that have an impact on this massive regulatory burden on businesses. Keep in mind that this is not a comprehensive list, and that every entity on the list issues and enforces their own regulations. Each one is another weight on the shoulders of entrepreneurs and business owners, and not all are necessary to ensure a safe and productive market. This does not include county and city regulations that are enacted in addition to those put forth by these entities.

Federal:

  • Federal Trade Commission (FTC)
  • Environmental Protection Agency (EPA)
  • Occupational Safety and Health Administration (OSHA)
  • National Institute for Occupational Safety and Health (NIOSH)
  • Internal Revenue Service
  • Social Security Administration
  • Defense Department
  • Centers for Medicare and Medicaid Services
  • Federal Energy Regulatory Commission
  • Consumer Product Safety Commission (CPSC)
  • Equal Employment Opportunity Commission (EEOC)
  • Federal Aviation Administration (FAA)
  • Federal Communications Commission (FCC)
  • Federal Deposit Insurance Corporation (FDIC)
  • Federal Reserve System (the FED)
  • Food and Drug Administration (FDA)
  • Interstate Commerce Commission (ICC)
  • National Labor Relations Board (NLRB)
  • Nuclear Regulatory Commission (NRC)
  • Securities and Exchange Commission (SEC)
  • Fair Labor Standards Act (FLSA)
  • The Employee Retirement Income Security Act (ERISA)

Delaware:

  • State Insurance Commissioner
  • State Bank Commissioner
  • Public Service Commission
  • Department of Labor (DOL)
  • Department of Natural Resources and Environmental Control (DNREC)
  • Safety and Homeland Security
    • Alcohol Beverage Control Commission
    • Office of Highway Safety
  • Merit Employee Relations Board
  • Public Employment Relations Board
  • Agricultural Lands Preservation Foundation
  • Food Product Inspection
  • Forest Service
  • Harness Racing Commission
  • Thoroughbred Racing Commission
  • Cash Management Policy Board
  • Delaware Health Care Commission
  • Delaware Manufactured Home Relocation Authority
  • Board of Manufactured Homes Installation
  • Delaware River Basin Commission
  • Delaware Solid Waste Authority
  • Professional Standards Board
  • Delaware Economic Development Authority
  • Division of Public Health
  • Fraud and Consumer Protection Division
  • Board of Cosmetology and Barbering
  • Human Relations Commission
  • State Fire Prevention Commission
  • Division of Motor Vehicles
  • Various professional boards

Pro-worker mandates actually hurt workers

All policy—economic or social, conservative or liberal—has unintended consequences. Good policy would minimize the negative effects of the measure while best targeting the problem that is being addressed. When it comes to business-related legislation, we are far from good policy.

Take employer mandates like paid family leave and increased minimum wage for example. Both efforts seek to tackle an issue head on, and are branded as “pro-worker” legislation. In an isolated bubble, this may be true. However, in the real world, pro-worker measures inflict more damage than that they seek to heal.

If paid family leave looks to provide a better work life balance and support to families, then why is it ignored that the current proposals would result in smaller wages, layoffs, or impact social security? These side effects are pretty harmful to workers and their families as well.

Look at minimum wage. The entire argument in support of $15 per hour is based on the need for a livable wage for these workers. But what happens when their employer cannot afford the cost increase, and cannot raise their prices high enough to make up for it? Instead of a $15 hourly wage, many workers will be left with no hourly wage when they are laid off to accommodate the mandate. Zero dollars is certainly not a livable wage.

Video: What’s Killing the American Dream? from PragerU

Legislation and regulations that are anti-business are blatantly anti-worker and anti-jobs.

Small businesses are vastly important to the American and Delaware economy. Such critical establishments should be supported by their representatives, but unfortunately are not. In fact, it’s the opposite. Government regulation is killing small businesses—and killing the jobs they create as well.

Putting social goals over profits is misleading. Traditional profit-seeking entrepreneurship has benefits that span community, socio-economic status, race, and gender. Suppressing these profits will in turn suppress the benefits they provide to overall society.

Increases in regulatory restrictions are associated with declines in lower- and middle-skilled jobs, lower wages, reduced hours, layoffs. None of those things are pro-worker.

In a better informed government that weighed the consequences of feel good legislation, lawmakers would work across the aisle to support bills that actually promote job growth, support businesses, and strengthen the economy. This new approach would mean that our elected officials work for the people, instead of duping them.

The next time you hear a lawmaker, party representative, colleague, or friend denounce a pro-business policy for being anti-worker or for putting business over the people, consider how a business can support its workers when their operations take a hit, and why both sides can’t align on this issue.

Killing jobs and cutting wages does not help workers

If Delaware wants to understand the ramifications of various employer mandates featured on many platforms this election season, they can look north to Connecticut. Connecticut’s proposed bills in 2018 included family and medical leave, expanded paid sick leave, and minimum wage hikes. The implementation and compliance costs of these mandates to taxpayers and businesses were estimated to be up to $530 million.

Connecticut Business and Industry Association President and CEO Joe Brennan expressed concern that long term talks about the difficulty of having one-size-fits-all mandates on employers applied to these bills as well. Added costs and administrative burdens expected to accompany these and similar measures are bad news for an economy as businesses will be forced to lower wages or cut jobs entirely.

You hear people ask, “Why not mandate that employers can’t do these harmful things?” Unfortunately, these things cost money that has to come from somewhere. Businesses are experts in finding ways to be able to stay afloat and keep their doors open and will have no option but to make cuts if saddled with these costs.

Connecticut’s paid leave benefits were set to be funded by mandatory deductions from employee wages, exchanging income for benefits. On top of this, taxpayers would fork over $18.6 million annually to administer these plans. The costs impact more than just the employees and tax payers: businesses’ bottom lines will be impacted, especially for companies that are operating on very small profit margins, like small businesses.

So what can businesses do?

The easy answer is to cut wages or cut jobs to make up the additional costs. Automation is rapidly expanding in the business world, and is a cheaper option in the long term to having increasingly expensive, and often unreliable, human labor. Robots could occupy 38% of jobs in the U.S. economy by 2030, and boost productivity, manage labor costs and improve operational predictability for large and small businesses. Small businesses like transportation and storage, manufacturing, retail and other industries, are the most likely to adopt these changes in the near-term. They’re also the ones who will be hardest hit by the proposed employer mandates.

In addition to or to avoid layoffs or automation, businesses could also raise prices to pass the cost onto the consumer. In this instance, the business still faces higher costs, but now the tax payer is paying twice to fund these mandates. If the costs become too high and sales suffer, layoffs are back on the table.

You can’t force a company to hire associates but you can certainly force them out of a burdensome state or country they can no longer afford to operate in—and they’ll take their jobs with them.

When our workers, small businesses, and overall economy are already struggling to get back on their feet after COVID, anything that could provide such widespread damage should be off the table. The 2021 Legislative Session should focus on helping Delaware workers and businesses, not forcing them into unemployment and bankruptcy. This election will determine if our workers and businesses can recover, or if costly and burdensome mandates will cause more job loss and small business struggle. Delawareans must make the best choice for the future this November.

Employer mandates: mandating job and income loss

Paid leave and similar employer mandate policies have risen in popularity over the past few years, and really came to the forefront during the coronavirus pandemic. On the surface, these measures will help workers (especially low and middle class) provide for and tend to their families. In reality, they will hurt businesses, cost jobs, and lead to lower wages.

An alternative option would be to allow the private sector to come together to either establish insurance plans that would cover short-term disability or paid family leave plans or allowing lower-income hourly workers to choose if they would want to convert overtime pay to paid leave. If we want to help workers, we should do so in a way that actually helps them.

Especially now, as businesses are struggling to recover from the economic crisis that accompanied the COVID-19 pandemic, employers cannot afford this burden. Losing your job is worse for a worker than losing a paycheck from not having paid sick leave or a paid family leave mandate.

Unfortunately, these platforms leave out a very important part of these types of mandates: the costs that will be placed on employers will end up hurting the very people they are seeking to help. Economic analysis and economists—both liberal and conservative—agree that the main people who pay for employer mandates are employees.

The cost of the health care provided to the employee does not result in more productivity or value of that employee at their firm. By adding this cost, it is more likely that incomes will be lowered in order for the total value of the employee to remain the same, even with additional costly mandates. Sometimes, the cost of these mandates results in layoffs so that the company can afford to provide them to the remaining employees.

So why do politicians who claim to advocate for workers support ideas that will hurt them? Well, it’s easy to support something that sounds good and has hidden consequences and costs.

For low income workers, employer mandates like health insurance mean far higher costs for the employer and a higher likelihood of layoffs. Since people cannot be paid less than minimum wage, the higher costs are forced onto employers who will have to adjust for these costs by laying off workers or cutting hours.

In a 2019 New Hampshire bill to implement a government-administered paid family leave program, a new tax was included to help cover the costs of the mandate. However, the tax that would cost the average worker an extra $267 per year only covered one fifth of the cost of the mandate. In this instance, employees would lose earning from both the tax and whatever cost-cutting measures their employer would be forced to take.

The costs aren’t just monetary.

If an employer has two applicants for a job and one appears more likely to take advantage of a mandate like parental leave (young, female), it might reduce the employer’s willingness to hire that person. Hiring a young woman then becomes a cost burden that an employer may not be willing to take on. In turn, this mandate intended to provide a benefit ends up leading to discriminatory hiring practices and higher unemployment in a new group.

When making decisions that impact businesses, lets allow businesses to contribute ideas for better solutions that benefit employers and employees alike. The government is not the answer to every question.

From ABD Founder: Founding A Better Delaware

From The Sword in the Stone Blog

by ABD Founder, Chris Kenny

With my decades long involvement in civic issues affecting Delaware and a constantly growing, deep understanding of their viable solutions, the question became how to use that foundation of knowledge to help improve the state’s concerns that have risen to a critical level. That is what has led me to my next chapter: creating A Better Delaware, our pro-growth, pro-business advocacy group.

One year ago I founded A Better Delaware, a non-partisan grassroots organization to advocate for pro-growth, pro-business policies and greater transparency in government. Now more than ever we need a collective effort to promote policies that will grow our economy, spur sustainable investments and create jobs. Our group routinely communicates key issues in Delaware policy, and here are some very startling facts about the Delaware economy:

With these realities harming Delaware’s growth and success, my statement on A Better Delaware’s official launch last year rings true now more than ever:

“I speak with employers and workers every day who share my concern about Delaware’s business climate and our competitiveness with other states. Too many politicians in Dover are out of touch with the realities of starting and operating a business, and what it takes to create good jobs.”

Our non-partisan group offers year-round communication to promote policies benefiting Delaware’s economy, and our grassroots success is evidenced in our group’s engaged online community (click here to visit our Facebook page). Almost 10,000 followers, over 13,000 email subscribers, and over a dozen distinct advocacy campaigns later, A Better Delaware celebrates one year of working with and for the Delaware people.

In addition to the ABD group, this year we have launched A Better Delaware’s PAC. To supplement our group’s efforts, the A Better Delaware PAC was created to apply the necessary pressure to affect political change and educate our state legislators. The ABD PAC will offer significant support for specific candidates who mirror our group’s pro-growth, pro-Delaware policy goals. As this year’s election cycle culminates with important elections at the local, state and federal level, the creation of our political action committee will allow us to make real change when it is needed most.

We will continue to attack the issues at all levels from the grassroots community level to holding our state’s politicians and policymakers accountable. I explained the need for transparency at all leadership levels at ABD’s founding:

“A major reason Delaware is losing ground is because few are holding the politicians accountable. A Better Delaware will make sure taxpayers understand what is at stake and who in Dover is working for them.”

OUR GOVERNMENT OPERATES BEST WHEN THERE IS AN EFFECTIVE SYSTEM OF CHECKS AND BALANCES IN PLACE. OUR GROUP WILL SERVE THAT GOAL.

A Better Delaware and the A Better Delaware PAC were created to provide educational communication informing our community and voters on the issues and policies that will most benefit our state and economy. This project will be an ongoing conversation around policy changes that will benefit our state. As for my personal political aspirations? That’s a topic I’ve been asked about quite a lot recently. My answer? I’ll save that for the next post.

A Better Delaware celebrates one year

A Better Delaware celebrates one year today!

A weakened economy, poor business climate, high tax rates, and questionable practices in state governance all lead to the decision to form an issue advocacy organization that would work for Delaware taxpayers and businesses. One year ago today, A Better Delaware was finally launched to the public to tackle these issues.

“Delaware needed to tackle these issues and since lawmakers and leadership in the state weren’t making the effort, Chris Kenny and Ben duPont did. Thanks to them, every day I get to wake up and work to make my home state a better place.” — Zoe Callaway, Executive Director

When we launched on September 17, 2019, we were ready to fight for you. The response we received after launch let us know that Delaware was ready too, and thankful for our presence and advocacy. You let us know that you too are tired of the over taxation and regulation, the back room deals in Dover, and being left behind by your elected officials.

Facebook recommendations and messages, emails, phone calls, and more started to come in that thanked us for what we were doing and encouraged us to keep on, so we did. We ramped it up with a weekly blog, A Better Discussion webinars, and professional videos addressing key issues in the state. Our public advocacy campaigns, where constituents had an outlet to speak out against bad legislation directly with their legislators, resulted in hundreds of emails sent during the 2020 Legislative Session.

“The Delaware Small Business Chamber is not a political chamber but we advocate for issues that affect the Small Business Community and we think A Better Delaware is helping to make Delaware a more small business friendly state. Congratulations on one year.” — Bob Older, Founder and President of the Delaware Small Business Chamber

That wasn’t enough for us. We came to fight for you, and that meant helping keep Dover business and taxpayer friendly. Last month, ABD formed a PAC to begin electioneering in order to expand our cause.

A Better Delaware has done a lot to advocate for you, but we could not have done it without you. Your support and willingness to share ABD and our message has really resonated and has allowed us to do everything that we have so far.

“For our inaugural year, we are very fortunate to have our Executive Director Zoe Callaway as the heart and soul of ABD working tirelessly everyday researching, writing, posting, calling and discussing the mission critical issues for all Delawareans.” — Chris Kenny, Founder and Co-Chairman

Almost 10,000 followers, over 13,000 email subscribers, and over a dozen distinct advocacy campaigns later, A Better Delaware celebrates one year of working with and for you.

What does the next year hold? We hope you’ll stick with us to find out! For now, we continue to work to improve the following statistics:

Delaware deserves better. Together, let’s make A Better Delaware.

Stop the Reverse Revolving Door

Texas limits two groups of people from running for public office: felons and the mentally incapacitated. In 2017, the state considered making an interesting addition to that list when a bill arose that would prevent lobbyists from being able to run for public office.

At first glance, it may seem excessive to group lobbyists with felons and people with mental handicaps, but the measure had great intentions and some precedent.

The precedent here comes from major concern with the “revolving door” of politics at state and federal levels. The revolving door is when legislators move into lobbying or similar state-related positions after retiring from office. Critics of this practice cite major concerns surrounding government accountability and trust in government.

Those at the end of their time in office who are eyeing a lobbying role are more likely to be influenced by the company or interests that the will shortly advocate for, leaving the public at a serious disadvantage. Once in these lucrative, private sector positions, former lawmakers have inside connections and relationships with those they will now stand in front of, on behalf of special interests.

Federal actions to prevent the revolving door have not been successful, and neither have similar measures in Delaware. When state senate leader Patty Blevins (D—Elsmere) lost her re-election in 2016, her new position with the Division of Public Health seemed to be in violation of state rules against revolving door type activities, included in the ethics portion of the Delaware Code.

So, when a lobbyist decides to run for office, these concerns remain. This process is known as the “reverse revolving door,” and is still a breach of trust in government and weakens government accountability.

A South Dakota lobbyist-turned-Congressman came under fire for adding language in a bill that helped his former employer. The same can be expected at the state level, and may be easier to prevent.

Delaware can either be more susceptible to this problem, or can do better to prevent it. In a state where everyone knows everyone, interests are bound to get tied up, but we do not have to blatantly allow for special interests to enter the legislative process and pass bills in favor of their friends or former employers. Delaware does however have the framework in a forgotten set of ethics guidelines that could be applied to and enforced with the reverse revolving door.

We already struggle with transparency and accountability in this state. We must do better.

Delaware should move to end the revolving door of politics and be an example to the nation. Until then, the people should consider the implications of electing former lobbyists to office and the impact this will have on the future of lawmaking in the First State.

New emergency order requires masks in homes, private gatherings

From Delaware Live

When Gov. John Carney rounded up all the modifications of his State of Emergency Order and put them into one new document, it added a sentence:

“A private residence where there is an indoor gathering of more than 10 people who do not reside at that property shall be considered an indoor space open to the public for purposes of this Order.”

That is new, confirmed Carney spokesman Jon Starkey, “though we have had some restrictions on private gatherings for a while.”

The new rule comes as Labor Day weekend is heading into full swing, with the last parties and cookouts of summer.

The new verbiage showed up Thursday, when Carney issued a press release saying that he had signed the 27th modification to his State of Emergency, combining all active COVID-19 restrictions into a single order, creating an Omnibus Executive Order.

The modification also formalized reopening bar service in Delaware beach communities and required that businesses more strictly enforce face covering requirements among their employees.

The new addition — in the section about face coverings — essentially requires homeowners and guests to follow the same protocols that restaurants and other public places do: wearing masks unless eating, but making sure the face coverings are on if you are moving around.

Read more

Delaware Black Chamber of Commerce set to launch soon

From Delaware Business Times

MIDDLETOWN — To amplify the voices of and opportunities for success for Black business owners, a Middletown consultant is leading efforts to form a Delaware chapter of the National Black Chamber of Commerce.

Khan Consulting President and CEO Ayanna Khan started the groundwork for the Delaware Black Chamber of Commerce (DEBCC) this summer, but envisions a future organization that not only advocates for Black business owners, but also grants them a door to funding opportunities and workforce development.

“There is definitely a disconnect in the business community when it comes to helping Black business owners,” Khan told Delaware Business Times. “This will be the state’s first chapter, and it’s time to start one. We need to pull together to make sure these businesses are not left behind.”

A survey conducted by the Global Strategy Group showed that only 12% of Black and Latino businesses who applied for aid from the U.S. Small Business Administration’s Paycheck Protection Program (PPP) received the full loan amount requested. About 26% of businesses surveyed received only a fraction of what was requested.

In Delaware, 14 out of the total 2,073 PPP loan recipients identified as businesses or nonprofits run by a person of color. Of the 14, five recipients identified as a Black-owned business or organization. Overall, 138 applicants identified as white and 1,921 applicants did not identify their race.

That inequality spoke volumes to Khan, especially since her firm helped nonprofits bring in millions through grants and fundraising.

“Seeing that Black business owners locked out of the PPP across the country because they didn’t fit the eligibility or the requirements, that really spoke to me,” Khan added. “Here I am, able to bring in millions for my clients and there’s a chance that businesses like mine wouldn’t see anywhere near the amount. No matter where you are in the state, it’s access to capital that’s the main struggle for Black businesses.”

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As Maryland enters stage 3 of COVID-19 reopening, movie theaters, live venues can open

From The News Journal

Movie theaters and entertainment venues can begin reopening later this week as Maryland moves into the third stage of coronavirus reopening, Gov. Larry Hogan said Tuesday.

All businesses in Maryland will be able to open in stage three, Hogan said. That includes movie theaters and live venues that have been shuttered since early in the pandemic.

Maryland Gov. Larry Hogan

Entertainment facilities will be allowed to operate at 50 percent capacity or up to 100 people at indoor venues or 250 people at outdoor venues, Hogan said. Retail stores and houses of worship can now move from operating at 50 percent capacity to 75 percent capacity, he said.

“I want to remind the people of Maryland that moving into stage 3 does not mean that this crisis is behind us,” Hogan said, “and remind them that we must remain vigilant so that we can keep Maryland open for business.”

Maryland’s 24 jurisdictions can choose to apply more restrictive rules.

Hogan on Tuesday also announced that Maryland will be one of the first states in the country to provide some COVID-19 tracing services through a collaboration with Apple and Google.

Read more