Politicians love to go for the easy applause line and lately, in Washington, that has meant decrying “job-killing regulations.”
Republican candidates for president have all gone for this crowd-pleaser.
- Massachusetts Governor Mitt Romney has promised to “tear down the vast edifice of regulations the Obama administration has imposed on the economy.”
- Texas Governor Rick Perry claims he would halt all regulations and impose a sunset so that they would automatically expire.
- Herman Cain claims that eliminating regulations would provide “an immediate boost for our weakened economy.”
Even President Obama has at times appeared to buy-in to this notion, ordering every agency to review its existing regulations to eliminate burdens on business, even though such analysis would have been completed when the regulation was first written.
It may be a crowd-pleaser, but it turns out that it simply isn’t true that regulations kill jobs. The Washington Post talked with some of the country’s top economists and experts on the relationship between job creation and regulations. The conclusion?
“Overall impact on employment is minimal.”
The truth is that regulations can impact jobs but don’t have much effect when it comes to employment. That means that a particular regulation might reduce jobs in one industry but create them in another. For example, a clean air regulation might reduce jobs at a dirty coal-fired power plant and create new jobs at a clean-burning natural gas plant. But, looking at the big picture, employers report that only 0.3% of layoffs are due to “government regulations/intervention.” That’s small potatoes compared with the 25% of jobs lost due to reduced demand for products and services in our weak economy.
While they may not have a big impact on jobs, regulations do have a big impact in a lot of other areas, namely in protecting workers, the public and the environment. So, let’s put “job-killing regulations” to rest. If our politicians are looking for new descriptions, how about “life-saving, people-protecting, society-benefiting regulations”? It’s not so catchy, but it has the benefit of being true.