How much impact does regulation actually have on jobs?
Experts say government regulation has a minimal impact on jobs numbers. If the costs in terms of jobs is a wash, and the benefits side is even slightly positive, then the conservative talking point for aggressive deregulation should largely be ignored.
Federal Reserve Chairman Ben Bernanke is pictured in front of a projection screen after delivering opening remarks at a conference on "Small Business and Entrepreneurship during an Economic Recovery" at the Federal Reserve in Washington. Bernstein argues that government regulation doesn't tend to have a negative effect on jobs numbers.
Hyungwon Kang/Reuters
The more we learn about the actual job impacts of government regulation, the better, and I found the survey in this AM’s WaPo to be quite well done.
I’ve always maintained that there’s just no careful research that would lead you to believe that regulation systematically kills jobs. Sure, compliance can be a real pain for employers—I’ve seen that myself many times. And compliance often leads them to expend resources they’d rather not, some of which, as the article points out, actually creates employment (to retrofit a coal plant to meet EPA standards, e.g., an executive of such a plant noted that they “…have to hire plumbers, electricians, painters, folks who do that kind of work…[j]obs are created in the process — no question about that”)
But final analysis:
Some jobs are lost. Others are created. In the end, say economists who have studied this question, the overall impact on employment is minimal.
And this focus on jobs looks, of course, exclusively on the costs side of the equation. If the costs in terms of jobs is a wash, and the benefits side is even slightly positive, then the conservative talking point for aggressive deregulation should largely be ignored.
That’s not saying we should leave everything the way it is. My own experience in government led me to believe that the problem is not usually the regs themselves, it’s how they’re implemented. Sometimes, like when the housing bubble was inflating, existent regulations are ignored—despite internal warnings, the Federal Reserve ignored the buildup of the subprime slime, e.g. Other times, environmental reviews that must occur before breaking ground on a project just take too long.
But I agree with the regulation expert cited in the piece who summed it up like this: