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Government regulations affect many aspects of fashion retail. First, labor regulation affect how you can fire, hire, pay, and treat employees. Next, the Internal Revenue Service regulates and determines what sorts of taxes you need to pay. Many types of clothing must meet government flammability standards. Children's clothing must comply with child safety regulations. Since retail stores are public spaces, they come under the regulations concerning accessibility of the Americans with Disabilities Act, and must have no barriers to access for either customers or employees. Also, the retail space must comply with fire regulations concerning maximum number of people in a room, exits, fire detection, sprinklers, etc.
The government has a lot of sway when it comes to all industries, fashion included.
First, the government has the ability to control interest rates. If the cost of borrowing goes up, then many businesses will have a harder time and new ones may not have enough capital to start. Fortunately for us, interest rates are at a low point from a historical point of view. This is partially why businesses are doing fairly well.
Second, the government has the ability to set minimum wages. This could make the hourly wage higher. This may hurt some fashion retail stores, especially the stores that hire younger people at a lower wage.
Third, state governments can tax clothing. Some states do and some do not. For example, New Jersey does not tax clothing. This helps tremendously, as there is immediately a 6-8 percent discount. In Connecticut, there is a 6.35 percent tax on clothing. The fact is not negligible.
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