Monday, November 14, 2011

Do Regulations Kill Jobs?

The Washington Post has a story up asking whether or not regulations kill jobs.  Here are some key points:

Data from the Bureau of Labor Statistics show that very few layoffs are caused principally by tougher rules.

Whenever a firm lays off workers, the bureau asks executives the biggest reason for the job cuts.

In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of “government regulations/intervention.” By comparison, 25 percent were laid off because of a drop in business demand.
AEP chief executive Mike Morris said that retrofitting plants would add jobs but that he needs more time from the EPA.

“We have to hire plumbers, electricians, painters, folks who do that kind of work when you retrofit a plant,” Morris said. “Jobs are created in the process — no question about that.”

Another AEP coal plant in nearby Conesville required more than 1,000 temporary workers to build a scrubber for one of its units. The plant then added 40 full-time employees to monitor the scrubber, which doubled the footprint of the unit. The device requires so much machinery it has its own control room.

Ralph Izzo, chief executive of the New Jersey utility PSE&G, said installing scrubbers at two of his company’s coal plants created 1,600 jobs for two years, plus 24 permanent ones.
A decade ago, in a landmark study, Morgenstern and others looked at the effect of regulations on four heavily polluting industries — pulp and paper mills, plastic manufacturers, petroleum refiners, and iron and steel mills — between 1979 and 1991.

The researchers concluded that higher spending to comply with environment rules does not cause “a significant change” in industry employment. 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.