WEDNESDAY, November 18, 2009 — Prospects for business success and a stronger economic recovery are being hammered by lawmakers — particularly the United States Congress — according to an analysis by Lew Ebert, president and CEO of the North Carolina Chamber.

Ebert, who represents the statewide business advocacy group, gave his analysis on Oct. 29 to about 80 people gathered for the Committee of 100's quarterly luncheon at Chef Paul's in Sanford.

Trouble On the Hill

Some of the more damaging changes are now being considered on Capitol Hill, where three pieces of legislation could send businesses packing for greener pastures.

One of them, the "Employee Free Choice Act" now being pushed vigorously by labor unions, would allow employees to establish a union without a secret-ballot election and impose new arbitration regulations placing businesses at a competitive disadvantage.

Ebert said half of North Carolina's congressional delegation was "on board" with the legislation, despite its potential to dull the state's competitive edge. "I can't tell you how many businesses are in this state because of our non-union environment," he explained.

Other initiatives that could cripple business, Ebert said, are changes being proposed to the national healthcare system that could force businesses to pay for health insurance for all employees and "cap and trade" legislation, an effort to control emissions thought to create global warming.

"Cap and trade" would impose an emissions allowance on each business and require companies generating more emissions to buy additional allowances from companies that don't use their full allotment. The proposal has stalled a bit recently but continues to work its way through Congress.

North Carolina vs. The World

At the moment, North Carolina remains an attractive place to do business. The Tar Heel State ranks as the nation's "Top Business Climate" by Site Selection magazine. Among other things, the magazine targeted at companies looking for places to expand cited the state's favorable tax climate, workforce, incentive programs and non-union environment as reasons the state stacked up well against competitors.

But in an effort to attract jobs in the harsh economic climate, many states are completely rethinking their strategies to attract business and becoming much more aggressive in recruiting. The trend Ebert describes as "all out war" could reshuffle the rankings and send companies looking at locations they might not have considered before.

North Carolina could become vulnerable, since some of the state's current competitive advantages may evaporate. Its non-union environment is at risk, for example, if the pro-union legislation in Congress is eventually signed into law.

To remain competitive, Ebert says North Carolina must invest in education and human capital, enhance its infrastructure (including roads, airports and utility service) that supports quick growth and help businesses lower operating costs to become more viable.

On the positive side, the North Carolina General Assembly did manage to fund education programs — that "education and human capital" dimension — at a time when legislators faced a $4.5 billion budget shortfall.

That seems even more remarkable when 10 states are facing budget disasters. According to a recent report issued by the Pew Center on the States, legislators in Arizona are considering mortgaging Capitol buildings and state officials in Michigan are slashing spending on schools and health care.

Other states cited at "grave risk" include California, Florida, Illinois, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

On the other hand, Ebert believes most of what the general assembly passed would do nothing to create jobs. And some tax proposals lawmakers debated — such as a proposal making it easier to sue manufacturers and an initiative forcing companies to provide paid sick leave for all employees — would actually hurt the state's ability to grow.

"What I'd like to be able to tell you is we made enormous progress helping to make this state a leader among states in this last session," Ebert said about the Chamber's work. "But what we spent almost all of our time doing is making sure our state legislators didn't harm business as much as they were tending to do."

Keeping the Competitive Edge

The bottom line, Ebert said, is that state and federal lawmakers should be focusing on making business more competitive — not less — in what has become a rough-and-tumble worldwide market.

"In my lifetime," he said, "I've never seen more potential harm that could be done to business and be done to the whole machine of creating jobs than the list of things I just described to you today."