NFIB: Trump administration's deregulation has small businesses optimistic about the future
- Small businesses are hopeful about their prospects following the Trump administration’s deregulation policies, according to the National Federation of Independent Business (NFIB). The small business advocacy organization’s November 2018 Small Business Optimism Index showed that these companies are experiencing growth in earnings, sales and other competitive areas.
- NFIB said that since the Trump administration began rolling back corporate rules, a position the NFIB said it supports, only 13% of business owners cited "regulations and red tape" as their biggest concern. The index also showed that an additional 22% of small business owners anticipate the economy improving.
- According to NFIB, 52% of U.S. adults said that government regulations are a "very significant" or "somewhat significant" deterrent to starting a business. The index reported a positive spike in earnings in 2017, as opposed to negative earnings in several consecutive years from 2001 through 2016; and sales peaked in 2017, according to the index, to a similar level not recorded since between 2005 and 2006.
As the federal government rolls back some of the rules that businesses find burdensome, state and local governments are passing legislation largely considered to favor employees. Many have adopted minimum-wage increases, salary history restrictions to end pay inequality, overtime threshold increases, paid parental leave policies and other legislation designed to protect workers. While federal deregulation might give employers, especially small businesses, a reason to feel optimistic, rule changes at the state and local level could lead to compliance problems for HR leaders and higher costs for some business owners and operators.
Moreover, movement at the state and local levels appears to be a direct response to deregulation at the federal level, Jeremy Glenn, managing partner in the Chicago office of Cozen O’Connor, previously told HR Dive. "I think employers still have good reason to be optimistic that … the federal agencies are going to continue to emphasize compliance over litigation, but there’s no indication that the cities and the states share the same willingness to back down from their enforcement priorities," Glenn said. He added that in Democratic-led states, in particular, local legislative changes are a direct reaction to what’s perceived as less enforcement on the part of the federal government.
Increased optimism about the economy and business earnings and sales is good news. Still, HR professionals will need to stay on top of compliance issues and legislative and regulatory changes impacting their organizations in 2019.