For those who anticipated increased regulatory activity under the Joe Biden administration, their expectations thus far have been met. Increasing regulatory burdens always take a toll on entrepreneurship; small business; American competitiveness; and economic, income and employment growth. But ratcheting up such costs in an already grim economy is grossly ill-conceived.
Consider two examples of regulatory policies heading in the wrong direction:
Hiking the minimum wage. President Biden proposes to raise the national minimum wage from $7.25 to $15, which started with an executive order moving toward the imposition of this government mandate. The $1.9 trillion spending package moving through Congress currently includes the phased-in $15 minimum wage hike.
The problems of raising the minimum wage include increased costs for small businesses and fewer job opportunities for low-skilled, young and inexperienced workers.
In the end, compensation ultimately is linked to productivity and the value brought to the market. Government can’t erase this economic reality via a minimum wage increase without negative consequences. The effects will be even harsher given the COVID-19 pandemic shutdowns —especially on small businesses in those sectors hit the hardest.
Imposing unnecessary constraints on the energy sector. President Biden has signed assorted executive orders that undermine the energy sector — which, by the way, is overwhelmingly populated by small and mid-size businesses.
One executive order cancels the Keystone XL Pipeline permit and another temporarily ceases oil and natural gas leasing in the Arctic National Wildlife Refuge in Alaska.
The Keystone Pipeline is meant to transport oil from Canada and North Dakota to refineries in Texas and Louisiana. While significant parts of the pipeline already have been constructed, stretches remain to be built.
Halting the pipeline would undermine trade policies; harm our relationship with Canada; and inflict losses on U.S. firms in the energy sector, their employees, and assorted small businesses that serve those companies and workers in the energy sector and other industries.
The U.S. economy has lost millions of small businesses and millions of jobs during the pandemic. A flood of new governmental regulations under such circumstances makes for grossly misguided policymaking.
One would hope that, instead, our elected officials, from Congress and the White House down to the smallest town halls, would be emphasizing constructive efforts to clear away government costs and obstacles so free enterprise, economic growth and job creation might flourish.
This is especially critical as the economy works to rebuild from the devastation wrought by COVID-19.