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Business vs. the bureaucracy
When bureaucrats write new rules for businesses, Joan Wrenn often wonders whether they know what they're doing. Starting now, she would like them to ask.

By JENNIFER HALPERIN

Step inside Joan Wrenn's factory on the west side of Chicago and the effect of government regulations is immediately palpable. The floors, although dry, are so slick they're difficult to navigate without slipping and sliding around. In slightly elevated heels, Wrenn seems less than comfortable. "I'm changing my shoes as soon as I get back to my desk," she tells an employee as she heads to her office.

Until recently, the floors of this business, Hudson Screw Machine Products, were covered with sawdust to absorb oil dripping from the factory's machinery. No more, though. A state regulation cracking down on the disposal of oil-saturated materials means the sawdust is out. Instead, the factory's floors are cleaned with a special machine four times a day. The machine removes the oil but leaves Wrenn with slick floors — and with the nagging worry that one of her workers may slip and fall.

Every week I
get flyers and
pamphlets and
invitations from
this state or that
state's economic
development
council. They
want to lure
us away

"This is the type of thing that makes you wonder if government realizes they're sometimes creating more problems when they think they're easing one," she says. "This regulation was put in place without much thought about how people and businesses would be affected."

When legislators in Springfield pass laws affecting business, they're often asking people like Joan Wrenn to make some pretty hefty changes. Like spending thousands of dollars removing underground storage tanks they hadn't thought about in years. Or freeing employees up for hours so they can learn basic math and communication skills.

But employers like her say government doesn't really understand — or even try to understand — what goes on inside private offices and factories across the state, and how the regulations it enacts affect them. That's an attitude employers feel should change; they say a more efficient and reasonable relationship would achieve the aims of government for a safe and healthy work place and the aims of business for profits and productivity.

"It's not the intent of the laws that I have a problem with," Wrenn says. "People shouldn't work in an environment that makes them sick. Government should have some oversight for public health and safety." She even thinks government sometimes can help business.

The problem, she says, is that few people in government seem to be thinking about the human side of business. "I think we do need to find a good balance between keeping the public safe and healthy and keeping business owners from having to shoulder an unreasonable burden."

Hudson Screw Machine Products was started in 1905 by Ed Hudson, whom Wrenn remembers as a brilliant machinist. The company manufactured parts for large machinery — a job for which Hudson apparently was eminently qualified. His business acumen, however, was lacking. The company, based for two decades in a seven-story building downtown, went through a series of financial ups and downs. In 1926, it moved to its present one-story location in a west side neighborhood, surrounded on one side by more small factories and on the other by rows of tidy homes.

In 1932 Joan Wrenn's grandfather bought the company; a large photograph of him still hangs in her office, across from her desk. She remembers her father and grandfather working toward making the business not only a place of profit but almost a second family for workers. Of the 98 people Wrenn employs at her factory, many have been there for several decades. Some are the second generation of their families to work there. Wrenn says she tries to foster loyalty with benefits like health insurance, a pension plan, profit-sharing, maternity and bereavement leave, and a willingness to promote employees who show initiative.

"I think that's one of the best things about working here," says Blair Dickinson, who has been with Hudson since 1979, moving up from an entry-level position to plant manager. "There's opportunity if you work hard, and you don't get overlooked. I used to work for a large corporation, and this, being a family-owned business, has a friendlier environment. You've got someone at the top you can talk to about things. I don't think corporations listen like that."

12/June 1994/Illinois Issues


ii9406121.jpg
Joan Wrenn poses in her Chicago factory, Hudson Screw Machine
Products, which she runs as the family business. Her grandfather
bought the company in 1932.
                            Photo by Richard Foertsch

Wrenn says her family also strived to make Hudson a place of social consciousness. Like the time her father and grandfather created a position for the mentally retarded son of a friend. "I don't know that he technically could find a good job anywhere else," she says. "But they found things here for him to do. What I wonder now is, 'Where's the money to do that anymore? Where's the money to do what's right?'"

Money that might once have gone toward "doing what's right" now gets eaten up as fast as it comes in, Wrenn says. Among the expenses she laments are worker's compensation costs, health insurance and taxes that have crept up over the years. For example, a head tax was imposed in 1973 on Chicago businesses with more than 15 employees, and has since increased from $3 to $5 per employee per month, according to the city's revenue department. That tax alone now costs Wrenn nearly $6,000 each year.

Other taxes, on income and gasoline, for example, have crept up, not just for businesses but for individuals as well. Illinois ranks as having lower than average worker's compensation costs, according to a national group that tracks such data, but neighboring states Indiana, Iowa, Missouri, Wisconsin and Michigan fared better, with even lower costs.

So while Illinois' climate doesn't seem abominable for business — and Wrenn says her Chicago location saves her money in transportation costs — it is sometimes tempting

to consider other locations. "Every week I get flyers and pamphlets and invitations from this state or that state's economic development council," she says. "They want to lure us away. For now, I throw that stuff in the garbage. But one of these days I may get disgusted enough that I don't."

To keep up with a changing economy, Wrenn's company has tried to evolve with the times. Hudson has branched out to produce parts for different technologies: It now makes small, spark plug-sized pieces for medical diagnostic equipment, telecommunications equipment and other tools of the modern age.

But just as her products evolve, so does her outlook and her responsibilities as an employer. The world has changed since the time her father and grandfather ran the business, and she must assume more challenges and obligations than they did.

Among those new challenges are environmental regulations, an especially frustrating area. Several months ago she had to remove a leaking underground storage tank from beneath her parking lot — a move she says she didn't understand since no groundwater traveled through the area. Plus, it left a 45-by-18-by-12 foot hole (which was later filled in) next to her factory; although it was fenced off, Wrenn worried that someone would fall in the crater and get hurt. On top of that worry, Wrenn

June 1994/Illinois Issues/13


was first told by the state she would be reimbursed for much of the removal cost, which amounted to $160,000. But the fund meant to pay back businesses like hers ran out of money, so she's skeptical that she'll ever recoup her expenses.

Wrenn also must contend with a vastly changed work environment where she is obliged to oversee and regulate employee conduct in such areas as sexual harassment. To avoid possible liability for one employee's remarks to a female co-worker, she moved him to another department where his expertise wasn't as fully used as in his previous position. And because he was a loyal, long-time worker she kept him at the same pay although the position he moved to was a lesser-paying one. "It's a tremendous financial burden, but what's my social responsibility?" she says. "We have a history of taking care of people."

Additionally, Wrenn recently had to reconfigure Hudson's entire payroll system so child support payments could be deducted, when appropriate, from workers' paychecks and forwarded to the clerk of courts, as required by law. Situations like these may sound inconsequential to outsiders, she says, but they cost her time and money, and foster a feeling among employers that they bear the consequences of employees' actions.

While the complaints
outlined by Wrenn
might not sound
oppressive to those
who haven't faced
them, they have cost
her more than $200,000

Yet, even these concerns are dwarfed in Wrenn's mind by the problems she has getting capable workers. Near the top of her wish list is some help from government in ensuring that young people leave the public schools with some basic math and reading skills. "The hardest job for me to fill is an entry-level position," she says. "I can't find anyone to even pack boxes! Finding someone to come to work, be polite and communicate well is almost impossible. Like last week: A kid from the neighborhood came in. He looked clean, looked like he wasn't on drugs and he was a high school graduate. I put him to work packing boxes. Two days later I came to find out he didn't know what decimals are. He couldn't add simple numbers."

Since Wrenn can't run her plant without workers who can communicate and do simple calculations, she applied for matching education grants from the state — not for advanced technical training, just some basic English and math.

"I pay them for going to learn," she says of the 40 employees attending classes at the plant. "That cost me $30,000 cash for non-productive hours." After she agreed to put up the money and, in essence, to provide education that should have been provided in school, government started making new demands of Wrenn. She was supposed to provide detailed financial statements about her business. She had to pledge to implement anti-drug and smoking policies. "Hey — I'm trying to help these people out," she says. "It's money out of my pocket. Now the government is throwing things back at me that I should do. The thinking has changed from 'What can the employee do for the employer?' to 'What can the employer do for the employee?'"

This line of thinking has led Wrenn to feel she must now regard every employee as a potential liability instead of an asset. "I'm telling you, you feel like you're constantly under threat," she says. "Any one of the 98 people working here can end up costing us a lot of money."

While the complaints outlined by Wrenn might not sound oppressive to those who haven't faced them, they have cost her more than $200,000 — no small amount for a business with fewer than 100 employees. And they leave her feeling angry and nervous about future costs that will hit her.

14/June 1994/Illinois Issues


John R. Davis, state director of the National Federation of Independent Business, says he tries to forestall such costs by examining bills moving through the legislature. This year, for example, he's been focused on a bill he says could drive up insurance premiums for bars and restaurants. The measure would remove limits on financial recoveries against a person who sells liquor to another person who gets drunk and causes death, injury or damage. He also had his eye on a proposal to keep the state from doing business with employers who hire replacement workers during labor disputes. Davis says he worried about the bill's vague definition of "labor dispute." "If a business has four or five workers, and two say they're quitting because they're not being paid enough, would that be considered a labor dispute? Would that be enough to blacklist that business from doing business with the state?"

Although there may be dozens of bills introduced each session that many small business owners would consider unfriendly, he says, most are "killed in the crossfire" between the Republican-dominated Senate and Democrat-ruled House. The same goes for business-friendly measures. But Davis says most of the 21,000 companies belonging to his group still have aspirations of fairly major reforms, such as setting limits on product liability and workers compensation awards in

Small business facts

Small businesses — companies with fewer than 500 employees — are a significant sector of the Illinois economy. These "small business facts" were compiled from information from the U.S. Small Business Administration.

• Small businesses employed 52 percent of Illinois' private, nonfarm workers in 1990, compared with 53.7 percent nationally.

• The net income of proprietorships and partnerships can be used as a measure of small business profits. Proprietorship and partnership income in Illinois rose from $16.6 billion in 1991 to $18.2 billion in 1992, an increase of 9.6 percent.

• There were 30,928 new business incorporations in Illinois in 1992, up 6.4 percent from 1991.

• During the same period, business bankruptcies rose 9.9 percent, from 2,354 in 1991 to 2,586 in 1992. Business failures in Illinois increased slightly to 3,093 in 1992, from 3,068 in 1991.

• Of the 230,830 business firms in Illinois in 1990, small businesses owned 98.2 percent; nationally, 99.7 percent of all business firms were "small businesses" in 1990.


hopes of saving money. And there is strong support for a proposal that would allow small businesses to buy health insurance as a group, which Davis says may be approved this session.

But one common desire among these employers is less easy to define: They want a voice in government not only as a lobbying force to push broad ideas, but also in the nitty-gritty process of writing detailed rules that will affect them.

One way to get that voice is to elect more businessmen and women to public office. "On the state level, that's starting to happen," Davis says. "We are seeing more business owners starting to hold office, and it's the difference between night and day. If you run a business and you're in the legislature, we don't have to educate you about keeping business in mind when you're voting on laws."

Wrenn and others also want to see people who have run businesses included in writing every regulation that affects businesses, like those dealing with storage tank cleanup and oil disposal. "I would love to know someone is looking out for our interests, telling government what's rational," says Wrenn. "Let's involve somebody who has to comply with regulations."

Yet, those are not ideas that have been a high priority for Illinois government. No mechanism exists to ensure employers a place to raise questions or concerns about rules that will affect them. Vicki Thomas, executive director of the state's Joint Committee on Administrative Rules, says state government agencies vary widely in the amount of public input they seek before rules and regulations are written to implement legislation. "It depends on the good will of the agency writing the rules," says Thomas, whose committee oversees the process. Some agencies will listen and respond to public comments during the entire time they're dealing with rule-writing; others have been known to do as little as set up a microphone and tape recorder in an empty room, letting citizens record their concerns with no one available to respond.

Rep. Nancy Kaszak (D-34, Chicago) is pushing a measure that would not only require state agencies to have someone available to listen and respond to public comment, but also to publish schedules so interested parties know what rule-writing sessions are coming up. Her goal, she says, is to guarantee businesses a place in the regulatory process.

The attitude we perceive
with government is that
business is the enemy,
the source of wealth,
Wrenn says. So we
respond back to that

That's exactly the kind of thing employers want to see, says Gerald Shields, president of the board of directors of NORBIC, the North Business and Industrial Council, which works to keep manufacturers from leaving Chicago's north side. He says sometimes even the simplest measures go a long way toward fostering better relations between government and business. Shields lauds another Kaszak-backed effort as an example of such cooperation. The "one-stop shopping" center that became law last year would gather all types of business-related information — from local permits to federal regulations — in one place. "That was one shining example of the public and private sector cooperating."

More such developments, he says, will help remove the bitterness that often characterizes the current relationship, under which many business owners feel that government is "out to get them." For instance, several businesspeople showed up at a recent safety and health conference offered by the state's Department of Commerce and Community Affairs. But nobody wanted to register their attendance "because of the fear factor," he says. "They were afraid they'd go down on a list as someone to investigate for violations. That's how bad it's become." DCCA Director Jan Grayson says he's been told of similar situations. "I'd like to see government try more to help us do what's right," says Shields. "Don't pull out the book of fines as the first opening salvo in every situation. Work with us instead of against us."

Wrenn has experienced the same paranoia with different government programs that are supposed to help her. "Isn't it pathetic, the attitude you have to develop?" she says. "It's based on fear. The attitude we perceive with government is that business is the enemy, the source of wealth. So we respond back to that."

For the sake of the state's job climate as a whole, employers say, a new attitude is needed — one that makes business a partner and involves businesspeople in constructing regulations that employers must enact. Employers say government often is seeking legitimate things from business, but without understanding what business is about. Including them in decisions, they say, would send a message of respect and cooperation from government that's been sorely missing.

June 1994/Illinois Issues/15


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