Slow Business Is The Job-Killer, Not Government Regulations

Economists have debunked the myth that environment regulations stall job growth again and again. Even as Mitt Romney calls to “tear down the vast edifice of regulations the Obama administration has imposed,” data from the Bureau of Labor Statistics show regulations haven’t hurt the economy. In 2010, only 0.3 percent of layoffs were due to higher costs from government regulations/intervention. By comparison, lower business demand caused 25 percent of layoffs.

Past studies also confirm that regulations have virtually no impact on jobs. Richard Morgenstern’s landmark study found that over a decade of regulations on heavily polluting industries didn’t cause “a significant change” in employment:

According to the study, when jobs were lost, they were often made up elsewhere in the same industry. For every $1 million companies spent, as many as 11 / 2 net jobs were added to the economy.

Overall, the research shows that the GOP field’s hyperbolic calls to eliminate regulation would have minimal impact on the unemployment rate.

Comments are closed.