Government Regulation Myth Revisited…

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Written by Alexandra Mitukiewicz and John Schmitt   
Thursday, 01 December 2011 09:15

As a follow up to our Tuesday post on government regulation and mass layoffs, we highlight another Washington Post article helping debunk the myth that government regulation is smothering job creation. Suzy Khimm recently wrote a piece for the Post’s Wonkblog about barriers to small business success. A study conducted by the Hartford Financial Services Group asked small businesses what, in their opinion, was the biggest threat to their success.

HartfordStudyChart

Source: The Hartford Group via the Washington Post Wonkblog

As the graph above shows, the biggest barriers to success for businesses that identify as “slightly-” or “moderately successful” are those that have to do with a lack of demand: "the economy," “customers have no money" or "no clients or work." Even about 10 percent of businesses who identify as “extremely successful” pinpointed the economy as their main obstacle. Khimm notes that most of the “extremely successful” businesses identify government regulation as the culprit (11.4 percent) and explains that as businesses become more successful, they become more likely to identify problems other than the economy as the major roadblock to their further success.

The Hartford findings are completely consistent with the data on mass layoffs that we presented on Tuesday, and the National Federation of Independent Businesses (NFIB) data, discussed earlier here at the CEPR Blog.

Tags: economy | jobs | regulation