Economy

Are Businesses More Worried About Regulation and Health Care Than About the Economy or Low Energy Prices?

Jon C. Ogg

Published: June 27, 2016 2:20 pm

Last Updated: January 13, 2020 6:18 am

Have you ever heard that politicians will only give the answers to the questions they want to answer, regardless of the question? It seems that businesses may now be in the same vote. The Federal Reserve Bank of Dallas released its manufacturing index on Monday. On top of the numbers being mostly very negative, businesses went out of their way to voice their complaints about excessive regulation, healthcare and other government-mandated and labor-related problems.

What was so interesting here is that Texas manufacturers were given three questions about how lower energy prices were impacting their business.

The first question — What impact have lower energy prices had on your business over the past six months? The second question — Overall, what has been the net impact of lower energy prices on your business over the past six months? And the third question, a catch-all bucket — What are the top three concerns affecting your company’s outlook?

It was the third question, the “everything else” bucket, where businesses went into deep coverage on regulation, the economy, labor shortages, interest rates, a strong dollar, real estate prices and ‘other.’ The responses were massively inclusive of regulation, healthcare and other related topics.

24/7 Wall St. went through Fed commentary and pulled direct comments from the retail outlook, the services sector outlook, and the manufacturing sector outlook. These comments were partly seen in the prior month, but this month was even more focused on these side issues.
It might seem that Texas-based businesses would be more concerned about energy prices over regulation. Frankly, it wasn’t even close. Government regulation was the most commonly cited concern of manufacturing, services, and retail segments — more so than the U.S. economy and actual energy prices.

Comments on each are around health care and regulation were highlighted, and the full commentary around these other issues was listed as follows:

• “The Affordable Care Act is stifling our business. This has to be one of the worst things beside all of the other federal regulations that are destroying our business.”
• “Government regulations announced for implementation prior to year-end are all cost increases that will result in a combination of higher prices and/or lower profitability. Health care costs for smaller companies are out of control.”
• “Taxes (federal, state and local), governmental intrusion and health care costs continue to be major concerns of our business. These issues are greater impediments than a stronger dollar to our business.”
• “There is no doubt that government regulation continues to grow as a major concern for our business and probably all businesses. Regardless of someone’s view on politics or the merits of each new regulation passed, everyone should agree that the basic costs to education and compliance are staggering.”
• “Excessive government regulation continues to cause increased costs and wasted time. It is impacting health care costs, environmental costs and overhead operating costs. Labor shortages, especially skilled trades, are constraining the construction industry and limiting growth.”
• “Runaway costs on health care due to our older workforce. In manufacturing it has been hard to find younger workers to replace those retiring.”
• “What we continue to see is regulation for the sake of regulation with no consideration of cost/benefit analysis. Health care is less affordable for employees, and the insurance companies are manipulating care to improve profitability. The complexity of choices for workers is more and more a problem for lower-level workers. The world economy is worrisome. The U.S. elections are offering no encouragement. The only good news is interest rates are low and retail still seems to be doing well.”
• “If I could have ranked regulatory requirements as all three concerns, I would have.”
• “It cannot be stressed enough the impact that overregulation is having on all business, but especially small business. It increases costs and requires more personnel in unproductive areas… We have come to a point where bureaucracy is not accountable for its actions but hides behind its many layers. This is one of the main reasons we continue to have tepid growth in the economy while costs continue to rise, affecting the real income of both the employer and the employee.”
• “New overtime rules and the Affordable Care Act caused increases in health insurance.”