Study: $1 billion in regulations destroys 8,000 jobs

Government regulations are often blamed for slowing economic growth, but a new study from a conservative group finds that it takes $123,442 in regulatory costs imposed by Uncle Sam to destroy one job.

The American Action Forum, which promotes limited government and fewer regulations, released a report Thursday that finds employment declines by 8,101 jobs, or about 3.6 percent, for every $1 billion in regulations faced by a particular industry.

ADVERTISEMENT
That means one out of 28 workers would lose their job in an industry that pays $1 billion to comply with regulations. More significantly, in an industry that faces $10 billion in regulatory costs, 10 out of 28 employees, 36 percent of the workforce, would lose their jobs, according to the report.

"To put that in perspective, average industry employment in our sample was 225,035," wrote Sam Batkins, director of regulatory policy at AAF and author of the report. "If in the following years, the average industry faced $1 billion in new regulatory costs, it would lose 8,101 jobs."

The study examined about 150 regulations affecting 44 industries over a 12-year period, using data from the Bureau of Labor Statistics. The rules ranged in compliance costs from a few thousand dollars to more than $10 billion per year, according to AAF.

"It’s doubtful that any one regulation can significantly affect employment," Batkins wrote. But when added together, an industry that is heavily regulated could lose a significant number of jobs, he argued. 

This story was updated at 3:20 p.m.