Government is a syndrome that overwhelms job growth

By Jan Teague, President/CEO
Washington Retail Association

One of the most dramatic political shifts in the last few years has been the muscle that various governments have used to dictate how every community will define its standard of living and social norms. Those standards and norms are dictated by various laws coming from all types of governments.

These norms are coming faster than business can keep up. Not being able to use plastic bags, the more recent New York City idea of restricting the amount of pop that can be sold at the 7-11 or McDonald’s type establishments, the Seattle law recently passed that tells business how many days they have to provide for paid sick leave all are recent examples.

Business has to figure out how to survive with this new and improved standard of living, this new social norm imposed upon us. That is the problem with a government syndrome; we can’t afford to comply and create more jobs and we have a difficult time stopping the new laws.

I can’t go so far as to call the vast number of ideas coming out of these governments to be a conspiracy, but it does feel like a syndrome. The difference is that unrelated things seem to have a connection of some sort. And, this connection seems to be a new social norm for our country.

What is the syndrome? It is expanded expectations that exceed our pocket book, expanded costs to live that fewer people can afford, and expanded pressure to be seen as a good citizen or business that can meet all of these notions of what makes a quality community.

Let’s take another recent example that relates to union organizing efforts. Unions are now finding their muscle outside of state or federal law with policy developed by a quasi government, the National Labor Relations Board (NLRB). Appointees are made to this board by the President. An August 2011 NLRB decision on Specialty Healthcare is now being used to allow a small unit of salespeople in the women’s shoe department to form a union. Imagine a larger retailer having numerous small union units and the retailer having to deal with each of them separately. It’s also a way to get unionizing into small businesses. But it is also very expensive, which ultimately impacts job creation.

Unionizing small groups is becoming a social norm. Wages and benefits of small government units have been around for a while, but now small private sector units of people will be allowed to form unions. We all know the end game here. It’s higher wages and benefits with fewer people fighting over a growing limited resource – jobs.

We have seen in the past decade that most local governments already have this multiple bargaining unit problem, including school districts. As cities and other publicly-funded government operations cost more, the pressure for wage and benefit increases continues to grow outside of government. Why shouldn’t everyone have the same benefits as government workers? I suspect the push on Seattle businesses to offer time off with pay is an effort to make this happen. The city of Seattle now has a social norm that puts pressure on other communities to do the same.

Why do these pressures seem to be greater now, during our poor economic times when jobs are hard to grow? It gets back to the syndrome idea where there are so many unconnected actions that together create a new set of social norms. And, we are finding it difficult to adjust and pay for it all. Business advocates have called this regulatory overload for a number of years. But I think it is seeping into new territory with plastic bag bans, pop limits, paid sick leave, and extremely small union units – to name just a few new social norms.

It’s no wonder Congress is having a hard time figuring out how to grow jobs. The syndrome has too many governments creating growing symptoms that all contribute to the problem. It won’t be cured by any single political idea. The quest for the perfect work life and the perfect community to live in won’t be tamped down by any single practical idea that usually tries to reform a single unit of government. We are simply being overwhelmed by it all.