Regulations and Jobs


Any kind of crisis is fair game on Capitol Hill. A favorite complaint right now is that “regulations kill jobs”. Both political parties repeat this talking point and industry lobbyists use it as a rallying cry. There aren’t a lot of polls or studies on whether or not this is true. So far the evidence points to a mere shift in the type of jobs within an industry unless there is an outright ban on a product.

Richard Morgenstern, who served in the EPA from the Reagan to the Clinton years, did a study 10 years ago on the effects of regulation on polluting industries. He found that some jobs were lost and some jobs were created ? a wash. As cited by Marian Wang in an article for ProPublica, proponents of the job killing can look to the Bureau of Labor Statistics for data showing that .02 to .03 percent of jobs were lost in the first half of 2011 due to regulations. Unfortunately, they do not track how many jobs were created.

Another important question to consider is the quality of jobs lost and created. Does the regulation serve a purpose that is beneficial to society? An industry regulation can be good, like removing lead from paint, or bad, when implementation creates unnecessary paperwork. Instead of saying all regulation is bad we should consider whether the regulation does what it was created to do. The benefit to society should justify the cost and it will then produce a useful job.

Recently the Environmental Protection Agency (EPA) was asked to back off proposed stringent ozone regulations. The reasoning was that it was important to reduce regulatory burdens during our trying economic times. Most decisions such as this are politics as job losses do not appear to be the big issue.

Page Perry, is an Atlanta-based law firm with over 125 years of collective experience representing investors in securities-related litigation and arbitration. Page Perry’s attorneys are actively involved in counseling institutional and individual investors. For further information, please contact us.