Regulations and Jobs
The rapid explosion of rules, regulations and red tape that has taken place over the last several years has become a serious problem for our country.
The House has passed a good bill called the Regulatory Accountability Act of 2015 by a vote of 250 to 175. The legislation would require federal agencies to consider a proposed rule’s impact on jobs and the economy while searching for less expensive alternatives. According to the House Judiciary Committee, the federal regulatory burden is larger than the GDP of all but the 10 largest countries and costs the average American family about $15,000 a year or roughly 30 percent of average household income.
A 2008 study by the Small Business Administration put the cost of just federal regulations at an astounding $1.75 trillion, or a cost of $10,500 per employee, per year. And regulations have greatly increased in almost every business and industry since then.
Confirming that, another study in 2009 by the Competitive Enterprise Institute said the cost for federal regulatory compliance had reached $1.2 trillion for businesses.
Nearly 60,000 federal rules have been issued since 1995, and regulatory agencies issued more than 3,500 final rules in 2009 alone.
Today’s Code of Federal Regulations contains more than 150,000 pages.
George Mason University put out a report that said U.S. regulations “are now more onerous than those in other countries, particularly countries that offer similar property rights and infrastructure,’’ and that “the United States risks losing investment capital and jobs.”
The “jobs bill” the President pushed would kill more jobs than it creates. This is proven by the big stimulus bill that was such a failure that the Administration instructed its people to not use the word “stimulus” when describing it.
The non-partisan Congressional Budget Office, which works for both sides, said the stimulus bill cost $228,000 per job created. In the private sector, it is generally estimated that a job is created for every $50,000 on average.
I attended an Aspen Institute breakfast recently where Edward Rendell, the former Democratic Governor of Pennsylvania, estimated that a highway bill would create 25,000 jobs for each one billion, or $40,000 per job. This is because most of the money would go to private companies.
There is waste in the private sector, but it pales in comparison to the waste in government. The most inefficient way to spend money is to turn it over to the federal government.
When I was a young man, almost every small town had two or three factories and many in very large cities. Then our environmental laws and other federal regulations forced many to go to other countries.
This did not just destroy factory jobs, though. It destroyed sales, accounting, managerial and secretarial jobs, too. It closed restaurants where factory workers ate or small businesses where they shopped. Now, in many small towns and rural areas, the main opportunities are to work in a fast food restaurant or go into the military.
We have much more competition around the world than we did when so many nations followed socialist or communist governments. We need to make the U.S. the land of opportunity in the future, too, and not hold back our free enterprise system.
For several years, I have pointed out that while unemployment is too high, underemployment is much higher.
Millions of people are working at jobs far below the levels of their education or their skills, talents, and abilities. We have ended up with the best educated waiters and waitresses in the world.
The Washington Post recently reported that “about 2.5 million people have been out of work for six months or longer, while nearly 7 million are in part-time jobs even though they would like (and need) full-time positions.”
The paper quoted Jason Richardson of the National Community Reinvestment Coalition: “You’ve got a lot of people who are trading one struggle, which is unemployment, for another struggle, which is underemployment.”
I have always voted and spoken out for policies to make it easier to start businesses and less bureaucratic and difficult for existing businesses to survive.
We have far too many who have spent their entire careers in government and do not understand the pressures and thin margins under which most businesses operate.