OKLAHOMA CITY – The problems of greatest concern to small business owners are health care costs and finding and retaining qualified employees. Unreasonable and excessive government regulations rank high, too.
Those are the conclusions from research performed by the U.S. Census Bureau and the National Federation of Independent Business (NFIB).
Based on responses collected Nov. 22-28, the Census Bureau’s Small Business Pulse Survey estimated that almost one-third of small companies in the U.S. experienced difficulties in hiring employees. Responses collected the previous week were 1% higher.
“In recent surveys this year, our members have overwhelmingly listed workforce as their top concern,” said LToya Knighten, vice president of strategic communications and marketing for the State Chamber of Oklahoma. The organization’s agenda was released earlier this month “and strengthening Oklahoma’s workforce is one of three priorities going into the 2022 legislative session,” she said.
“While we have experienced concerns with small businesses finding and retaining qualified employees, the Lawton-Fort Sill Chamber of Commerce stands ready to assist our small businesses,” said Dr. Krista Ratliff, president and chief executive officer.
For example, she said, the Lawton-Fort Sill Chamber has “a broad network” of business partners through which “we have been able to assist small businesses with relationship building.” This networking “has created win-win situations for small and large businesses,” she said.
“Our business partners understand how the relationships benefit economic development and the community,” Dr. Ratliff said. “We can connect businesses with organizations such as the Workforce Center Manager South Central Oklahoma. They recently spoke at our State of the Workforce Luncheon and are a great resource for small businesses. They could potentially assist businesses with finding qualified employees.”
During the Nov. 15-28 two-week time frame cited by the Census Bureau, approximately 12% of American small business owners required their employees to have proof of vaccination against COVID-19 before physically coming to work.
Almost 42% of U.S. health care companies and social assistance small businesses reported difficulties hiring paid employees, and almost 12% experienced a decrease in the number of paid employees toward the end of November.
Roughly one-fifth of U.S. small businesses had returned to their normal level of operations during the period Nov. 15 through Nov. 28, the Small Business Pulse Survey found.
In Nov. 22-28, about 70% of U.S. manufacturers and retail trade small businesses experienced domestic supplier delays, the survey discovered. The overall national average was 45.8%.
Almost one-fourth of U.S. small business owners reported they need to identify new supply chain options in the next six months.
Approximately 35% of small businesses experienced large increases in prices they paid for goods and services, compared to the mid-March 2020 pre-pandemic norm.
Small business owners rank 75 problems
In its most recent survey of small business problems and priorities, the NFIB asked small business owners to rank 75 business problems. The most severe problems cited were, in order:
• cost of health insurance, #1 (The cost of health insurance was “critical” for 51% of the NFIB respondents in the 2020 survey, a rate nearly unchanged since 2012.)
• locating qualified employees, #2
• federal taxes on business income, #3
• property taxes (real, inventory or personal property), #4
• finding and keeping skilled employees, #5
• unreasonable government regulations, #6 (OSHA health/safety regulations fell to 41st place)
• state taxes on business income, #7
• tax complexity, #8
• uncertainty over economic conditions, #9
• uncertainty over government actions, #10
• state/local paperwork, #11
• cost of supplies/inventories, #12
• frequent changes in federal tax laws/rules, #13
• cost and availability of liability insurance, #14
• federal paperwork, #15
Other issues included: workers’ compensation insurance, #22; controlling one’s own time, #31; minimum wage / “living” wage, #34; managing employees (e.g., performance, absenteeism, appearance, etc.), #35; unemployment compensation, #37; obtaining licenses, permits, etc., #45; using social media (Facebook, Twitter, Yelp, Google, etc.) to promote the business, #57; and access to high-speed internet, #63.
OK administrative code contains about 145K regs
According to the Mercatus Center at George Mason University, Oklahoma has approximately 145,000 state regulations. Governor Kevin Stitt said last year that is twice the number of regulations in Kansas and more than in Missouri and Arkansas. Of Oklahoma’s neighbors, only Texas, which has 227,000 regulations, and Colorado, with 152,000, have more regulations than the Sooner State, the governor said.
To provide some context, the Oklahoma Administrative Code (OAC) is a comprehensive list which constituted 15,342 printed 8½x11-inch pages that filled 20 binders (an average of 767 pages each), plus an 803-page index, as of early January 2020. A 2016 copy of the code was in the Chickasaw Nation Law Library at the Oklahoma City University School of Law.
The OAC is organized into six major divisions. Each title identifies an administrative agency, except for Title 1, which includes executive orders, and each chapter identifies a major area of regulatory control within an agency’s authority.
Regulations are developed by state agencies and by legislators alike, and in Oklahoma those regulations range from A (abandoned children, abandoned coal mines, abandoned oil/gas wells and abandoned property) to Z (zebra mussels, zinc and zoning).
Researchers at GMU’s Mercatus Center developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures, in minutes, information that would take hours, weeks, or even years to obtain by reading and counting. For example, the tool allows researchers to identify the industries that state regulation targets most by connecting text relevant to those industries with restrictive word counts. These regulatory restrictions are instances of the words and phrases shall, must, may not, prohibited and required, which can signify legal constraints and obligations.
State RegData revealed that the 2019 OAC contained 145,296 restrictions and 9.3 million words. It would take an individual approximately 515 hours – almost 13 weeks – to read the entire OAC. That’s assuming the reader spent 40 hours per week reading, at a rate of 300 words per minute. By comparison, there are 1.09 million additional restrictions in the federal code. Individuals and businesses in Oklahoma must navigate these different layers of restrictions to remain in compliance.
Lesser concerns ranked, too
Of the 75 business problems assessed by the NFIB last year, the 10 issues of least concern were:
• exporting products/services, #75 (unchanged for several years)
• importing products/services, #74
• undocumented workers, #73
• out-of-state sales tax (e.g., internet sales), #72
• credit rating/record errors, #71
• winning contracts from federal/state/local governments, #70
• costs and frequency of lawsuits/threatened lawsuits, #69
• obtaining short-term (12 months or revolving) business loans, #68
• obtaining long-term (five years or more) business loans, #67
• bad debts (not delinquencies) and/or bankruptcies, #66
Topping the list of issues that increased in importance between 2016 and 2020 was “cost of natural gas, propane, gasoline, diesel and/or fuel oil,” now ranked 19th. “Competition from large businesses” advanced from 31st place in 2016 to 21st in 2020.
The NFIB findings were based on responses from 2,552 NFIB small business owners/members to a mail survey conducted in early 2020; a sample of 20,000 members was drawn, for a response rate of slightly under 13%. Separate samples of 1,500 each were drawn for Texas, California, Ohio and New York to create four state-specific rankings.
Problems evaluated were ranked on a severity scale of “1” for a critical problem to “7” for “not a problem.”