Do Regulations Cost Jobs?

One clear consensus emerged at the Republican presidential debate on the economy last week: government regulations are stifling our economic recovery. "I’ve said I’m going to repeal every single Obama-era regulation that costs business over a hundred million dollars. Repeal them all," Rick Santorum said, to no disagreements from the other candidates who all envisioned a robust recovery once regulations were wiped from the books.

"The real issue facing America are regulations. It doesn’t make any difference whether it’s the EPA or whether it’s the federal banking, the Dodd-Frank or Obamacare, that’s what’s killing America," Rick Perry said, recalling details for a rare moment. "And the next president of the United States has to have the courage to go forward, pull back every regulation since 2008, audit them for one thing: Is it creating jobs, or is it killing jobs? And if that regulation is killing jobs, do away with it."

Are regulations killing jobs? Not really, at least according to an article in the Washington Post. Digging into the numbers, it's clear that a drop in consumer demand, not rules governing business, has been the source of the country's recent troubles. "In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of 'government regulations/intervention,'" WaPo's Jia Lynn Yang writes. "By comparison, 25 percent were laid off because of a drop in business demand." Government regulations might shift around which types of jobs are found in the economy—a new natural gas power plant replacing an aging coal plant in this story—but don't create a noticeable net loss across the economy.

That information likely won't stop the Republican candidates from continuing the rail against the evils of government interference in the private sector. The candidates are less interested in the specifics than the general ideological underpinning that any government action is inherently harmful. That's why they posture against regulations in the abstract, but rarely delve into the specific rules that need to be rewritten (save abolishing the absolute evil of "Obamacare".)

 

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