New Regulations vs. New Hiring: Why Can’t They Just Get Along?

New Regulations vs. New Hiring: Why Can’t They Just Get Along?


The tenuous employment growth in December may finally give us some hope that our economy has the strength to overcome even a Jon Huntsman deficit (except more possible).

But as a barrage of new regulations are set to go into effect in 2012, will legislators let a miracle happen or will they insist on screwing it up?

According to the National Federation of Independent Businesses, nearly 4,300 new regulations are pending – 845 of which will specifically affect small businesses – that have increased financial burdens on businesses, or are expected to do so.  There are also hundreds of pending rules and regulations that have unidentified impacts on businesses’ bottom lines, which concerns business planners and increases the risks involved in expansion.

In other words, as regulations are dropped on our economy’s lap, businesses have no choice but to stall hiring – unless they don’t care about profits (which means they are either trying to sell Chevy Volts or are Solyndra).

Some regulations will always be necessary, yet Democrats and Republicans are in a cat fight over the sheer volume of regulations and how much of an economic impact is worth the regulation in question.

Fancy light bulbs may be good for the environment, but if you have to lay someone off in order to install the more expensive alternative in your offices, does the environmental benefit outweigh a family losing its means for support?

Bigger profits, which translate to increases in stock prices and pension plan value, are wonderful. But, are they worth a child catching pneumonia or cancer when the surrounding environment is neglected?

Among even the known regulations taking effect in 2012, the economic impact is about as scary as Jocelyn Wildenstein without makeup (ok, nothing is that scary and I apologize if you clicked the link).

For example, new accounting standards go into effect in the first quarter of 2012.  The changes are intended to make it easier to compare financial statements of companies across the globe, which most of us do on a daily basis, but inadvertently distract resources and time from a company’s core competency and goals . . . unless, of course, your core competency is accounting, then it’s a field day.

Taxes suck, and they suck even more in the world of business, so companies will do just about anything to get out of them.  Remember how GE sold its soul in 2010 so it wouldn’t have to pay taxes, even with billions of dollars in profits? (Forgive me; I’m jealous of their genius.)  Through 2010, and subsequently extended into 2011, the research and experimentation tax credit saved companies an estimated $6 billion per year and boosted innovation in technologies and other industries, which keep American businesses ahead of the rest of the world.  As these types of tax credits are allowed to expire, the U.S. government will temporarily gain with increased revenues, but American ingenuity and competitiveness may falter.

Economics for Dummies translation:  jobs go bye-bye.

There’s still a lot of debate about the effects of the Affordable Care Act on business.  Some organizations, like the Small Business Majority, argue that it’s beneficial to businesses, especially small businesses.  They have some compelling evidence. But, what they failed to consider is the current rising costs of healthcare for companies, doctors, administrators, and more, all of which gets passed onto consumers, based on the expectation of the higher future costs when all of the regulations within the act are implemented.  Just like squirrels before winter, insurance companies are storing their nuts before the long winter ahead.

New EPA standards are sold as having benefits that outweigh the economic impacts of their regulations.  But sometimes the benefit is unquantifiable and is justified by the knowledge that it will have some positive health or environmental impact.  This is enough for a lot of people (yes, even many outside of your local commune).

On the other hand, the costs to implement these regulations are much easier to determine.  For example, the recently introduced Mercury Air Standards regulation is expected to come with an estimated $11 billion per year increase in costs to consumers and businesses in the form of higher energy costs for homes as well as in the production of good and services.  Your family will need to make more money to pay for the costs, while companies are trying to cut costs to make up for the new expenses.

Hopefully, cost cutting doesn’t come in the form of a pink slip to you, because if it does, fewer jobs will mean worse public health and welfare for the entire country, negating the benefits of the law’s intent.

Combined with the fact that hundreds of new regulations are pending or yet to be written and business planners can become paralyzed in fear.  Would you jump into that new Jetta if you thought your phone, electricity, health insurance, and cable bill have the chance of increasing dramatically in the next few months, or would you wait it out?

Businesses don’t invest (as much) in “cars,” equipment, expansion, or hiring under the same conditions either.  Maybe, Mitt Romney, backed by the Supreme Court was onto something with that whole “companies are people, too” business.

JUSTIN VELEZ-HAGAN is Senior Contributing Writer and Commentator for  He is also the National Executive Director of The National Puerto Rican Chamber of Commerce, an international developer of senior living facilities, and is a reservist in the U.S. Air Force.  He can be reached at