Talking Points on the Economy: Follies of Regulation #4

(A publication of The National Center for Public Policy Research, 777 N. Capitol St NE Washington, D.C. 20001 (202) 507-6398; Fax (301) 498-1301.)

Regulation Grills Small Businesses

Small business, which were responsible for a full two-thirds of all new jobs produced during the boom 1980s, have been hurt disproportionately by new government mandates and regulations. Consider:

*Small businesses bear the brunt of the Americans with Disabilities Act (ADA) since the costs associated with ADA compliance represent a greater portion of company assets for a small firm than a large one. Further, even before the ADA was passed, most large firms already had facilities to accommodate employees with disabilities.

*Industries dominated by small companies have been hit the hardest by the Clean Air Act Amendments (CAAA) of 1990. The urban smog requirements of the amendments, for example, requires gas stations in certain parts of the country to install hydrocarbon vapor recovery devices on gas pumps, costing between $27,000 and $30,000. Further, printing shops must have emission control devices for their printing presses costing an average of $160,000 under CAAA. Extraordinary regulatory expenses like these have put thousands of small companies out of business.

*With fewer employees, small enterprises find compliance with the 1991 Civil Rights Act particularly difficult and costly. The chance that employees hired for reasons other than their abilities could adversely effect company productivity is greater in a small firm than a large one.

*Small firms have also been hit the hardest by the Endangered Species Act. Federal restrictions on logging in the Pacific Northwest to save the Northern Spotted Owl, for example, have put many small logging firms out of business. Unlike large companies, many small firms own no private land from which to cut timber when the government reduces the supply available from public land.

Information from The National Center for Public Policy Research's National Policy Analysis paper No. 99 by David Ridenour. Date of Issue: July 1, 1993

Talking Points on the Economy: Follies of Regulation #3

(A publication of The National Center for Public Policy Research, 777 N. Capitol St NE Washington, D.C. 20001 (202) 507-6398; Fax (301) 498-1301.)

Americans Angered by Government Regulations for Good Reason

According to economists Michael Hazilla and Raymond J. Kopp, environmental regulations alone reduced overall American employment by 1.18 percent (by 1990), or by 1.1 to 1.4 million jobs. Federal regulations on business, environmental and otherwise, have destroyed between 3.6 and 9.6 million jobs.

*As much as 80% of all inflation is attributable to federal, state and local government mandates and regulations, according to economist Richard Rahn.

*Americans spend 12 billion hours, equal to 48 hours per capita, dealing with federal forms each year.

*According to the New England Journal of Medicine, 24% of all health care spending goes for administrative and regulatory costs.

*Since stringent drug-approval procedures were enacted in 1962, the cost of developing new drugs has doubled and the number of drugs approved each year has plummeted by two-thirds.

Excessive regulations have held-up reconstruction of riot-torn South Central Los Angeles. Entrepreneurs wishing to start up "light industries" in Los Angeles must first receive as many as 200 approvals from federal, state, city and regional government authorities.

Information from "Talking Points on the Cost of Government," a publication of Americans for Tax Reform Foundation, Grover Norquist, President

Issue Date: June 28, 1993

Talking Points on the Economy: Follies of Regulation #2

(A publication of The National Center for Public Policy Research, 777 N. Capitol St NE Washington, D.C. 20001 (202) 507-6398; Fax (301) 498-1301.)

It's Not Easy Being Green:
Excessive Environmental Regulations Hurt Working Class Americans

Environmental regulations cost every American family over $1,000 each year.

Pollution-control regulations imposed by the Environmental Protection Agency (EPA) will cost the U.S. $131 billion, or 2.3 percent of the gross national product, in 1992. This is equal to more than $14,700 for every American currently unemployed. In 1990, U.S. spending on pollution-control was double that of the entire 12-nation European Community and four times greater per capita than that of Great Britain.

Continued government restrictions on oil exploration in Alaska's Arctic National Wildlife Refuge (ANWR) has cost the economy billions of dollars and thousands of jobs. According to a May 1990 report by Wharton Econometrics Forecasting, opening oil-rich sections of ANWR to oil development could increase U.S. GNP by as much as $50.4 billion during peak production years.

Recovery efforts for the Pacific Northwest Spotted Owl will cost an estimated 50,000-100,000 timber industry jobs. In 1990, the Northwest's Spotted Owl was listed as a "threatened species" under the Endangered Species Act even though it is virtually indistinguishable from the California Spotted Owl - an owl in abundant supply. Since 1990, 100 wood products mills, employing some 8,000 workers, have been closed in the Pacific Northwest.

Residents of the Northwest will pay as much as $250 million more a year in utility bills to "save" the Snake River Sockeye Salmon, a fish listed as an "endangered species" last November. Despite the enormous cost, the prospects for the Sockeye rebounding are not good.

Information from Executive Alert (National Center for Policy Analysis - Dallas, Texas), March/April 1991; "Should We Allow Development of ANWR's Oil Resources," Environmental Perspectives (Citizens for the Environment - Washington, D.C.), May 15, 1991; "EPA's High Cost of Political Science" by Warren Brookes, December 16, 1991; NWI Resource (National Wilderness Institute - Washington, D.C.), February/March 1991; Human Events, April 14, 1991; American Forest Resource Alliance; Paul F. Ehinger and Associates (Eugene,
Oregon); and Northwest Power Planning Council

Issue Date: February 26, 1992

Talking Points on the Economy: Regulation #1

(A publication of The National Center for Public Policy Research, 777 N. Capitol St NE Washington, D.C. 20001 (202) 507-6398; Fax (301) 498-1301.)

CAFE Auto Mileage Standards Kill Americans and American Jobs

Since 1978 auto manufacturers have been required, through the Corporate Average Fuel Economy (CAFE) program, to maintain minimum fuel economy averages. In 1978 the requirement was 18 MPG; today it is 27.5 MPG. Some in Congress seek an increase to 40 MPG or more. But both current and proposed CAFE regulations have dire consequences:

* CAFE regulations kill Americans. Passengers in small cars die at twice the rate of those in large cars when accidents occur. Studies demonstrate that regulations mandating a 27.5 MPG standard have caused a 14-27% fatality increase. If the standard becomes 40 MPG, fatalities will increase by 30-60%: 75,000-149,000 people will die needlessly during the first decade following implementation.

* CAFE regulations kill jobs. The standard of 27.5 MPG has cost over 200,000 American jobs (many transferred to Japan). The Federal Trade Commission estimates that raising the standard from 27.5 MPG would result in a loss of 100,200 more U.S. jobs; higher standards still more.

* CAFE regulations raise prices. At 27.5 MPG there is a "shadow tax" of $1,026 per MPG on Ford automobiles and $657 per MPG for GM cars. At a 28.5 MPG standard, the shadow tax rises dramatically to $2050 per MPG on Ford cars and $1962 on GM cars.

* CAFE regulations hurt families, the elderly, and the disabled. Mile-per-gallon standards dramatically raise the cost of large cars needed by families and by those who have difficulty getting in and out of small vehicles. Because of CAFE standards, for example, the price of Ford's large Crown Victoria sedan rose at a 53% higher rate than Ford's small Escort sedan.

* CAFE regulations hurt the U.S. economy. The Federal Trade Commission says CAFE costs the U.S. economy $4 for every gallon of gasoline saved.

* CAFE regulations fail to deliver promised benefits. Proponents of mileage standards insist that regulations reduce oil consumption significantly. According to Energy Secretary James Watkins, even if standards were raised to 40 MPG, domestic oil consumption would be reduced by only 3%.

Information from: The Journal of Regulatory Economics, The Pittsburgh Press (9/12/91), "Will CAFE Be More Lethal?" by Warren Brookes, Competitive Enterprise Institute "CAFE Kills" (6/12/91), Heritage Foundation Backgrounder #825 by William G. Laffer III.
Issue Date: October 22, 1991

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