May Jobs: Another Month in the Doldrums
“Over-regulation is one reason our labor force is hollowing out,” noted John Slavic, CEO of The Slavic Group and a leader of Job Creators Network. “We’ve slowly grown a mass of government rules that’s as heavy as the entire economy of India, and it’s crazy to think we’ll remain competitive and create jobs with that weighing us down.”
The U.S. Small Business Administration estimated the annual cost of federal regulations on American businesses at $1.75 trillion for 2008, and the Competitive Enterprise Institute has since revised the figure to well over $1.8 trillion for 2013. That’s big enough to be the tenth largest economy on Earth if it were a separate country.
The labor force participation rate, historically above 66 percent for two decades prior to 2009, has been closer to 63 percent for the last year, landing at 62.8 percent for May. If the country had that standard labor force participation today, May’s official unemployment rate, unchanged from April at 6.3 percent, would be 10.8 percent.
“This week’s creation of costly Environment Protection Agency rules on electricity production is adding even more regulatory pressure,” Slavic said. “That chokes off cheap electric power – the lifeblood of our economy – and will cost us more jobs.” A recent report from the U.S. Chamber of Commerce projected new EPA emissions regulations on power plants will reduce U.S. employment by 224,000 jobs each year. The study also revealed the new regulatory regime will reduce economic output by more than $50 billion per year through 2030.
Productivity measures also fell to multi-year lows. American innovation and business efficiency is adversely affected by the harsh regulatory environment as well. This costs jobs and profits especially in small business, the primary generator of new jobs in the economy.
“The Small Business Administration – an agency of the federal government – reports the cost of regulations on every small business to be well over $10,000 per employee,” Slavic said. “We have a rulebook that practically pays job creators not to create jobs. Washington needs to start tearing out pages rather than writing new ones.”