(ATLANTA, GA) – The June jobs report released this morning was overshadowed weeks ago by the very troubling first quarter of 2015 report on productivity growth, said the chief executives of Job Creators Network. That report showed six straight months of American workers producing less for each hour on the job. The CEOs say this trend is caused by government overreach piling on too many regulations, such as the U.S. Department of Labor announcing a new overtime rule for five million workers just this week.
“A nation working harder to create less needs to question whether its economy is really in recovery,” said Jamie Richardson of White Castle System Inc, a member of the Job Creators Network. “A large number of economists tell us our problem is a lack of business investment due to too much regulation, and we saw a fresh example just this week with these new overtime rules.”
Overall productivity increases since the 2008-2009 recession have lagged far behind prior post-recession expansions, according to a May Wall Street Journal report. The Journal surveyed economists and found 94 percent blamed “weak capital spending,” and 64 percent identified “ government regulation” as the culprit behind the “restrained investment and innovation.”
“For our company the costs will be between $8 million and $12 million a year to comply with the new overtime rule,” said Richardson. “This is on top of burdensome health care regulations and a potential minimum wage increase.”
Last year the National Association of Manufacturers released a study showing the average annual cost of federal regulations on all manufacturers was $19,564, with the burden on smaller manufacturing firms (less than 50 employees) taking the hardest hit at $34,671 in yearly regulatory costs per worker.
In May, the Competitive Enterprise Institute released its latest edition of “The Ten Thousand Commandments,” an annual update of the Federal government’s own estimate of the size of the federal regulatory burden. CEI reports an annual burden of $11,724 per employee for small businesses with fewer than 50 employees. If the nearly $1.9 trillion total annual cost of U.S. government regulations were an independent nation, then it would have the world’s 10th largest economy.
“The girth of the federal government’s overreach is bigger than the whole economy of a major trading partner such as Canada,” concluded Richardson. “The American worker won’t keep pace with them if our businesses are forced to spend so much on new rules rather than new tools.”
Today’s employment report from the U.S. Bureau of Labor Statistics showed 223,000 jobs added for June, and an unemployment rate of 5.3 percent.