Here's what really makes it tough to create jobs
Regulations hamstring one Maryland candle company from shifting production to the United States.
There’s a struggle that goes on everyday across America. While what Washington does makes headlines, entrepreneurs are tangling with municipalities all over the country: Building departments, licensing, code enforcement, departments of inspections and permits; the list goes on and on.
Most of the time these struggles don’t make news. Many would-be business owners just give up, some tough it out if they have the patience and resources, while others hire former local politicians who provide the service of ‘greasing the skids downtown’ and call it business consulting.
For those that wonder about the divergent economic worlds we live in: Wall Street’s prosperity and Main Street’s depression, Timothy Aeppel’s Wall Street Journal story about the trials and tribulations of Chesapeake Bay Candle provides a glimpse as to why so many millions are unemployed.
Mei Xu and David Wang sell candles to places like Kohl’s and Target. During the past 16 years they’ve been shipping candles from their three factories in Asia. But times have changed. “To do well in this market, you need to be able to produce and ship the next day,” Ms. Xu told the WSJ. “That means making it here.”
Plus, the cost of labor and transportation has soared in Asia.
The U.S. plant will employ 100 people, and more than a year ago the company bought a former liquor warehouse outside of Baltimore, thinking they would be open in nine months. But it’s 13 months and counting. Xu and Wang have already spent $1 million more than planned and they don’t yet have an occupancy permit.
The storage room Wang and Xu budgeted to cost $25,000, would have cost $250,000 to comply with the city’s requirements, so the company will not store as many fragrance oils on site, making it more difficult to meet orders.
The building has to be equipped with fire sprinklers and handicapped restrooms. In total, code compliance is estimated to be 30% of the $3.5 million the company has spent on the plant.
A spokeswoman for Anne Ardundel County claims they jumped right on the candle maker’s applications, saying it was the company that was slow to respond after the county objected to the plant’s design.
However if the county essentially tears up your plans, it takes time to respond. In this case it was six weeks.
Ms. Xu is wisely taking the high road, not blaming county officials. She doesn’t need anymore delays and the Certificate of Occupancy that will allow her to open and hire workers looks to be close at hand.
The experience has made Ms. Xu wonder if government is “really ready for business to come back from Asia.”
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