Don't Buy the Argument that Regulation Hurts Employment

Regulatory policies are expected to play a significant part in the agenda of the new Congress. Congressional leaders have indicated in particular that they will be holding hearings on EPA regulations that would affect the operation of coal-fired power plants, and on aspects of the Affordable Care Act and the Dodd-Frank financial reforms.

Unfortunately, coloring the debates and quite independent of the merits of these and other proposed regulations will be claims of Republican Congressional leaders and their supporters among big business organizations that enactment of rules to secure the public interest are intrinsically suspect because they suppress economic activity and limit job growth.  Senate Majority Leader Mitch McConnell could not have made the point more clearly.  On a recent Sunday talk show he said that Republicans would move to block environmental and health care regulations because "[w]e need to do everything we can to try to rein in the regulatory onslaught, which is the principal reason that we haven't had the kind of bounce-back after the 2008 recession that you would expect."

In the conservative playbook this is not a new idea. The U.S. Chamber of Commerce is on record as predicting incorrectly that employment would suffer if such important developments came to pass as the drilling moratorium following the BP-Deepwater disaster in the Gulf of Mexico, EPA proposals to curb greenhouse gas emissions, the Dodd-Frank financial reform bill, the Consumer Financial Protection Agency and the Affordable Care Act.

This argument reflects a widespread but essentially faulty belief that regulation in and of itself is bad for business, and that government interference with markets inevitably produces undesirable outcomes.  The drumbeat that regulations are bad for business tilts the rhetorical playing field away from protections of workers, consumers and the environment and elevates deregulation almost to a default position in everyday politics.   No one, after all, wants to contribute to unemployment.