SOCMA Says Small Business Jobs Act Falls Short of Meaningful Assistance

The Society of Chemical Manufacturers and Affiliates (SOCMA) today noted the enactment of the Small Business Jobs Act of 2010, saying the law includes several provisions favorable to small companies but falls short in providing effective, long-term support.

“We applaud several of the bill’s provisions, including the revival of expired bonus-depreciation that allows companies to write off half the cost of new equipment placed in service in 2010, excluding from taxation capital gains from certain small business stock, and increasing opportunities to access credit and government loans,” said SOCMA president and CEO Lawrence D. Sloan.

However, Sloan said that in order to successfully help small businesses, Congress needs to address a fundamental obstacle, which is the disproportionate cost of federal regulations.

According to a new report issued last week by the Small Business Administration, the annual cost of federal regulations was more than $1.75 trillion in 2008, the latest data.

Small businesses face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than for large firms. Of most concern to SOCMA, however, is the fact that the costs are significantly pronounced within the manufacturing sector. According to SBA’s report, the regulatory cost per employee for small manufacturers is 125 percent higher than in large firms.
 
Small manufacturers spend $17,729 more per employee to comply with environmental regulations than do large manufacturers. Compliance with workplace safety, tax law, and homeland security are also higher for small manufacturers.

“It’s difficult to see how this legislation is called a jobs bill when it ignores a significant per-employee cost hurting small businesses which is the disproportionate regulatory burden they face every year,” Sloan added.

“It is surprising, too, because Congress and the administration have reiterated the need to help manufacturers, yet nowhere in the president’s manufacturing revitalization strategy is there a plan to address the substantial cost of regulations burdening manufacturing. In fact, there isn’t even an acknowledgement that regulations do, in fact, bear on the cost of manufacturing in the U.S.,” he continued.
 
SOCMA is the only U.S.-based trade association dedicated solely to the batch, custom, and specialty chemical industry. Since 1921, it has represented a diverse membership of small, medium, and large chemical companies, making it the leading authority on this sector. SOCMA has a global membership of more than 200 companies. In the U.S. members employ more than 100,000 workers across the country and produce 50,000 products valued at $60 billion annually. For more information, visit www.choosesocma.com.