Small Business Impediments: Progress Needed, Progress Made

By Mike Henderson

It happens in every legislative session. Legislation that starts out with the best intentions veers off course and harms the very people it aims to help. The biggest impediment to fostering a culture where we encourage the growth of small business (and thus, jobs) is that many times the desire of an elected official to do good for the individual often has unintended consequences that hurt the small business owners and cause employers to pull back from expanding and hiring more people.

Take these recent examples of legislation with unintended consequences for employment and job growth:

  • HB 467/SB 699: Providing Our Workers Education and Readiness (POWER) Apprenticeship Act. These similar bills seek to impose the same apprenticeship regulations that exist on public works on private projects.

Public officials are very “pro-apprenticeship” right now but they don’t understand that the requirement to staff projects with apprentices doesn’t spur job creation any more than a regulation that bartenders be licensed will sell more liquor! To be an apprentice, in the eyes of the state and federal government, means you are working in your chosen trade and you are enrolled in an accredited program.

If the State wants to get more people in the industry, funding credible pre-apprenticeship programs that prepare young people for a career in construction would be more beneficial. Contractors then can hire from a qualified pool of entrants that, once employed, can be placed in an apprenticeship program.

  • HB1/SB230: Maryland Healthy Working Families Act. The sick and safe legislation had the very admirable intent of providing protection for the at-risk-employee so they don’t have to choose between taking care of a sick child or keeping their job. Unfortunately, the legislation went so far beyond that original intention that it created an unwieldy, cost-prohibitive mandate. The net result of Sick and Safe will be that companies are going to be very circumspect about adding to their workforce.

Fortunately, some common sense has taken hold recently among lawmakers:

  • Mayor Catherine Pugh rightly understood that for Baltimore City to raise its minimum wage, while surrounding areas did not, they would be placing employers domiciled in the City at a competitive disadvantage to the rivals who reside across the county line. The City already suffers a tremendous disadvantage because higher property tax rates continue to play a major role in declining population rates.
  • On the national level, the House Committee on Oversight and Government Reform favorably reported the Fair and Open Competition Act (H.R. 1552) out of committee. The bill, supported by Associated Builders and Contractors and introduced by Rep. Dennis Ross (R-Fla.) and passed by voice vote, will boost competition on government construction projects and reduce building costs to taxpayers by preventing federal agencies from forcing contractors to sign controversial project labor agreements (PLAs) in order to compete to build federal and federally assisted construction contracts.

In Maryland, many merit shop contractors bid on both state and federal government projects. Given the proximity to our nation’s capital, federal government contracts often make up a substantial amount of a contractors’ portfolio. Government contracts also provide an entry point for new contractors just getting started in the industry. Common sense thinking, at least on the two previously mentioned measures, will ensure merit shop contractors can compete fairly and grow their business and workforce.

ABC continues to work with our elected officials to help them understand that government cannot create lasting, meaningful jobs through regulating businesses. What legislators can do is further develop policy that encourages growth and investment, while including reasonable, non-punitive, measures to ensure the safety and welfare of the individual worker.