Thursday, September 22, 2011

Experts on both sides say environmental regulations have little overall effect on jobs

Despite much political rhetoric about "job-killing regulations," they do little overall damage and in some cases create jobs, according to experts, including some with ties to regulated industries. While there are many examples of regulations hurting particular businsses or industries, regulations mostly force jobs to be shifted, reports Marian Wang of ProPublica, an online investigative news service run by Paul Steiger, former managing editor of The Wall Street Journal.

Richard Morgenstern, who was with the Environmental Protection Agency during the Reagan and Clinton administrations and now works for Resources for the Future, a nonpartisan think tank, directed research 10 years ago which found "higher production costs pushed up prices, resulting in lost sales for businesses and some lost jobs, but the job losses were also offset by new jobs created in pollution abatement," Wang writes.

She reports that data from the Bureau of Labor Statistics shows in the first half of 2011, employers reported regulations caused them to layoff 0.2 to 0.3 percent of their employees, but the data don't factor in the number of jobs created as a result of regulation. This is a very narrow way to determine whether or not a regulation is good or bad, Wang writes, noting that the real measure of a successful regulations is "whether it improves waterways or lengthens lives or protects the public as promised."

Cutting through "job-killing" rhetoric is key to understanding that. As Roger Noll, co-director of the Program on Regulatory Policy at the Stanford Institute for Economic Policy Research, told Wang: "The effect of regulation on jobs has nothing to do with the mess we’re in. The current rhetoric about regulation killing jobs is nothing more than not letting a good crisis go to waste." (Read more)

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