Report: Every $1 Billion In Regulations Costs Jobs

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Government regulations cost American jobs as well as money, according to a study.

A new report by the American Action Forum (AAF) found that for every billion dollars in regulatory compliance, impacted industry employment declines by 3.6 percent.

This would be the equivalent of an industry that employs 225,035 workers, losing 8,101 jobs due to regulatory burdens costing the industry $1 billion.

To reach this conclusion, the authors of the report, Sam Batkins and Ben Gitis, looked at all final rules between 2001 and 2012 that agencies acknowledged would affect certain industries.

They then measured the effect of the regulations by examining the relationship between the change in industry employment and the increase in the affected industry’s regularity cost burden.

Out of the 44 different industries Batkins and Gitis analyzed, manufacturing and the oil and gas sector suffered the biggest losses due to new regulations.

The agencies bearing most of the responsibility for job-killing regulations? The Department of Labor, the Environmental Protection Agency, and the Department of Energy.

Batkins says that lawmakers and agency regulators will often categorize any one particular regulation as economically insignificant, but it is the compilation of rules that can kill industry jobs.

“Cumulative regulatory burdens matter,” he told The Daily Caller News Foundation.

One regulation on an impacted industry may have a negligible impact on jobs, “but if this is your fifth or sixth regulation on a particular industry in the last five or six years, then taken in the aggregate there might very well be significant effects on employment,” he said.

Industries with heavy regulations also experience slower overall growth rates.

The Mercatus Center at George Mason University recently released a study that found between 1997 and 2010, the least-regulated industries grew by about 63 percent, but the most-regulated industries grew by just 33 percent during the same time period.

On an annual basis this comes out to a sluggish growth rate of 1.9 percent for the most-regulated industries and 3.5 percent expansion rate for the least-regulated industries.

Batkins explained to TheDCNF that although the data shows that excessive regulatory burdens impact private sector growth and diminish employment numbers, there is little incentive for agencies to tighten the reins on their regulatory authority.

“The job of agencies is to regulate, that is what they do,” said Batkins. He added, “You never hear regulators say that they are going to cut more regulatory burdens than they make.”

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