Wednesday, October 12, 2011

Today's Daily Stat: Government regulation doesn't affect job numbers

AP fact check shows that GOP claims of government "stifling" businesses are untrue

Government regulations -- specifically those formed under President Obama -- are costing Americans jobs, according to Republicans.

It's a repeated meme that never goes away: regulations aren't good for business, stifling growth, which in turn forces business to hold back on hiring new workers or even laying off the ones they currently have. It's a sad state of affairs, a reality we must bear to live with.

If it were true.

In fact-checking the GOP presidential debate that was held last night, the Associated Press did some real digging -- and discovered that government regulation isn't all-too responsible for much job loss at all.

In fact, businesses reported that layoffs the result of government regulation accounted for only two-tenths of one percentage point (0.2 percent) across the country. That means for every layoff based on government regulation there are 499 other layoffs that are based on some other criteria.

Government regulation wasn't even the top concern for businesses: consumer confidence was. The top complaint among businesses was that there wasn't enough customers, and thus not enough cash-flow, to warrant more hiring.

The belief that regulation somehow stifles business is baffling. Certain kinds of regulations can do this -- but with proper implementation, regulation doesn't need to hurt the businesses of American entrepreneurs, and thus doesn't need to hurt economic or job growth.

This is clearly the case within the Obama administration, as, once again, less than 1 in every 500 layoffs were due to government regulation. And that's also today's Daily Stat.

0.2 percent of jobs lost are the result of excessive "government regulation."


  1. Thanks for the post.

    It is a mantra the RW repeats that it is regulations that keeps jobs from being created and the media goes along with it.

    Important stories like this are barely a blip on the redar.

  2. Chris, to better explain what the "Right Wing" is talking about: the U.S. Small Business Administration estimates that the cost of federal regulations is currently $1.75 trillion. So a huge chunk of money that could be spent growing businesses (and creating jobs) is instead spent complying with regulation. And of course, the comparative burden of small vs. large businesses is significantly higher, so entry into the market place is harder.

    so this doesn't necessarily results in millions of "lost" jobs, but it absolutely prevents small business owners from creating them.

  3. For some reason this isn't letting me respond. This is a test.

  4. OK, I bet there's a limit to how long a response can be...this will be cut up into pieces then.

    I decided to look into that $1.75 trillion claim because I don't like being wrong. That's not a "how dare you question me" thing -- I truthfully loathe being wrong and like to set the record straight when I am. So when you brought this up, I decided to do the research on it.

    That figure you presented is largely skewed, it turns out. It's based on a study that cut several corners, among them economic BENEFITS of regulatory reforms on businesses. Other factors that the "$1.75 trillion" report ignores are: Questionable assumptions and flimsy data; Opaque (undisclosed) calculations; Slanted methodology; Overstated costs (e.g. using only the upper estimates when ranges are utilized); and a Lack in (and disregard for) Peer Review.

  5. You can read the report here: -- Setting the Record Straight: The Crain and Crain Report on Regulatory Costs (PDF). You can read another analysis of the flawed "$1.75 trillion" figure here: Flaws call for rejecting Crain and Crain model.