Busting the Myth of “Job-Killing EPA Regulations”

, president | December 12, 2014, 1:00 pm EDT
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Earlier this month, when EPA proposed a new health-protective air quality standard for the pollutants that form “ozone,” some critics predictably pounced on it as another example of a long string of “job-killing EPA regulations.” Yet last week, we learned that the U.S. economy created about 320,000 new jobs in November, and average wages are starting to rise as the labor market tightens.

If you spot some dissonance here, you’re not alone. The claim that EPA regulations kill jobs is belied by the record.

blog-series-image

This post is part of a series on the EPA Clean Power Plan.

In the six years of the Obama administration, the EPA has indeed issued a wide array of regulations: fuel economy standards for cars and trucks, limits on mercury emissions from power plants, lower sulfur gasoline requirements, interstate air pollution curbs, and in, draft form, carbon dioxide emissions limits on coal and gas plants and new standards on ozone. The regulations are pervasive, and reduce pollution substantially from our manufacturing, electricity, and transportation sectors, among others.

Now let’s look at employment numbers. President Obama took office in 2009. In that year, and before any of these new regulations were put into effect, there was a huge loss of private sector jobs (about 5 million) due to the financial meltdown and the severe recession that began just before he took office. Since 2009, however, and despite all of these regulations, private sector employment has grown by about 10 million jobs. (I focus on private sector employment because the critics claim that the EPA’s pollution regulations cut private sector, not government, jobs). Private jobs growth in 2014 is a particularly strong, with about 2.5 million private sector jobs created.

Now let’s do a comparison. President George W. Bush is well known for his “anti-regulatory” stances and, not surprisingly, the EPA issued far fewer regulations during his administration. In fact, President Bush’s EPA was routinely sued for failing to issue regulations, including taking a pass on addressing the emissions that cause global warming.  And private job creation numbers? A net of about 300,000 private sector jobs created during his presidency, compared to 5 million net private sector jobs created during Obama’s tenure.

private-sector-employment

Data source: Bureau of Labor Statistics

So the data just shows no link between job loss and EPA regulation.

Why is that? Partly it’s because our economy is so large and diverse that costs associated with pollution control are too small to affect overall economic well-being, even if, for example, they might cause an individual facility (such as an aging and inefficient coal plant) to retire. But it’s also because our economy excels, perhaps more than any other, in rapid technological innovation to meet new challenges. So, when governments issue new regulations, smart innovators find cost-effective ways to meet those regulations, and often create new job opportunities along the way. Here’s just one example from my home state: the company Thermo Fisher Scientific has put hundreds of Massachusetts residents to work manufacturing specialty instruments to detect pollutants such as mercury that are regulated by the new EPA standards. Many of our countries’ most important businesses know first-hand that good regulation can spawn innovation, and that is one of the reasons why they support EPA regulations, such as the plan to cut carbon emissions from our nation’s power plants.

So the next time you hear the warnings of economic collapse that arise after virtually every announcement of a new environmental regulation, you have a choice of what to believe. You can rely upon what vested interests and their supportive politicians say businesses will do, or base your conclusion on what businesses actually do. The thousands of businesses currently investing in a growing U.S. economy do not see EPA regulations as job killers. And neither do I.

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  • Hi folks,

    We encourage lively discussion, but please stay on topic and avoid name-calling and personal remarks, which violate our comment policy. Thanks and happy holidays!

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  • Michael Lipsky

    At EPI several years ago, John Irons and Isaac Shapiro reviewed the evidence and found that reliable studies that sought to determine the relationship between regulation and jobs found there was no relationship, or a slight positive relationship. Here’s one of several references: http://epi.3cdn.net/961032cb78e895dfd5_k6m6bh42p.pdf.

    • Henry L

      Please read my answer to Ken Kimmel.

      • allgoo19

        Henry L says:
        “Please read my answer to Ken Kimmel.”
        ==

        Which part?
        You are basically repeating the same thing in your original comment.
        No link to the study, research, article (“the more government regulates, the more jobs will be lost.”).
        Nothing.

        Quote,
        “But who can prove a cause and effect correlation?
        Too many studies start off with the conclusion followed by an analysis towards that conclusion.
        There is no way government can create more jobs by interfering in the free market.”

        Where’s the proof to this?
        ” the more government regulates, the more jobs will be lost.”

      • Henry L

        The proof? Government promulgates regulations in order to prevent business people from doing things they would be doing in the pursuit of profits.
        When profits are reduced there is less money to hire new people.

      • allgoo19

        Henry L says:
        “The proof? Government promulgates regulations in order to prevent
        business people from doing things they would be doing in the pursuit of
        profits.
        When profits are reduced there is less money to hire new people.”
        ==

        Proof in the form of study, research or article.
        Not your rephrased comments.

        Go ahead and show me.
        “the more government regulates, the more jobs will be lost.”

        Henry L says:
        “When profits are reduced there is less money to hire new people.”
        ==

        Regulations apply to all the business in the industry equally. It sets the leveling fields.
        With or without the regulation doesn’t make any difference among the competing companies. If the regulation costs one company, the competition will suffer same cost. If that results in price hike for one company, it’ll result in the same for all companies.

        So, your personal opinion has been disproved.
        Show me the proof from the real expert.

      • Henry L

        You don’t realize that you just made my theory more plausible; all businesses suffer.

      • allgoo19

        Henry L says:
        “You don’t realize that you just made my theory more plausible; all businesses suffer.”
        ==
        I have o idea what yo are talking about.
        Please explain.

        All business suffers equally means some business know how to adjust it will take advantage while other who don’t lose the business.

        Those who take advantage will hire more workers, make up for the unemployment created by other lost business.

        So, your personal opinion has been disproved.
        Show me the proof from the real expert.

      • Henry L

        Sorry, all goo, I do not want to waste my time with simple Simons.

      • allgoo19

        Henry L says:
        “Note: This comment has been removed due to violation of comment policy.”
        ==
        What’s that?

      • Our comment policy is posted at the bottom of this page.

      • allgoo19

        Equation Admin says:
        “Our comment policy is posted at the bottom of this page.”
        ==
        Thank you for clearing it up.

        I keep trying to keep myself polite and my comments haven’t been deleted yet.

        Profanities and off-topics usually are sour grapes for the losers.

      • allgoo19

        Henry L says:
        “Sorry, all goo, I do not want to waste my time with simple Simons.”
        ==
        That was the original comment which was deleted.
        I don’t see anything wrong with the comment.
        I guess it was caused by system glitch.

        Basically you are saying you don’t want this to continue because you lost the argument.
        Am I right?

        I just wanted to see your answer before you hide,
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

      • The quoted comment was deleted because it is off-topic and personal in nature.

      • hyphenatedamerican

        Henry, I debated with this guy for months. He just does not care if he is proven wrong. Literally, it does not bother him.

      • Henry L

        Thank you; I was wondering what kind of idiot I was dealing with. I appreciate your post. Have a merry Christmas and Happy New Year!

      • hyphenatedamerican

        “Regulations apply to all the business in the industry equally. It sets the leveling fields.
        With or without the regulation doesn’t make any difference among the competing companies.”
        By this logic, if you make all runners wear extra 50 pounds, they will still run just as quickly, because they carry same extra weight.
        As always, you make little sense.

      • allgoo19

        hyphenatedamerican says:
        “By this logic, if you make all runners wear extra 50 pounds, they will
        still run just as quickly, because they carry same extra weight.
        As always, you make little sense.”
        ==

        It’ll still make a fair competition.

        Your analogy is like Milton Friedman explains ec0onomy by pencil production.

        Maybe you can answer this,

        Unanswered,
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

        Why did you hide?
        Are you afraid of me?

      • hyphenatedamerican

        If they are making good profit, and they believe business is sustainable and may grow, they will expand.
        Anyway, I notices that you completely ignored what I said, and yet, you think you deserve me to answer your questions. I can see that you did not change a bit.

      • allgoo19

        hyphenatedamerican says:
        “If they are making good profit, and they believe business is sustainable and may grow, they will expand…”
        ==
        Too many “ifs”.
        How about showing the proof instead of talking assumptions?

        “Corporate Profits Grow and Wages Slide”
        http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html?_r=0

      • hyphenatedamerican

        Proof of what? Proof of how and why companies expand business? You can speculate yourself why in Obama’s business, while profits are up, businesses don’t want to hire Americans, and raise wages. Maybe because they know that Obama’s economy is built on hot air. Come on, your Obama runs this economy.

      • allgoo19

        +hyenatedamerican says:
        “Proof of what?”
        ==
        Proof of this

        “If they are making good profit, and they believe business is sustainable and may grow, they will expand”
        in real life example.
        like this….

        “Corporate Profits Grow and Wages Slide”
        http://www.nytimes.com/2014/04

        Sure, the companies hire more workers when they are planning a increase in the production volume.
        But in real life, more profit doesn’t mean higher production volume as in the example above.
        It’s far more likely more profit means more bonus to the CEOs.

        So the proof?

      • hyphenatedamerican

        “It’s far more likely more profit means more bonus to the CEOs.”
        Or higher stocks and dividends to stock owners? That did not occur to you, right?

      • allgoo19

        hyphenatedamerican says:
        “Or higher stocks and dividends to stock owners? That did not occur to you, right?”
        ==
        And what that has to do with this?
        “If they are making good profit, and they believe business is sustainable and may grow, they will expand…”

        I made my point by this,
        “Corporate Profits Grow and Wages Slide”
        http://www.nytimes.com/2014/04

        When you are going to make your point?
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

      • allgoo19

        hyphenatedamerican says:
        “Proof of what?”
        ==
        By the way, why did you change to “private” status?
        Is there any reason like you can’t make a good argument against me?
        Do you feel you are losing?

      • hyphenatedamerican

        You know that you lost after you made a claim that US economy was in recession through the entirety of Reagan’s second term and all of Bush Sr. term – and could not bring yourself to acknowledge that.
        Once I realized that you were insane, I lost interest. But now I decided to torment you poor soul more.

      • allgoo19

        hyphnetaedmarican says:
        “Note: The rest of this post has been removed by the moderator due to violation of comment policy.”
        ==
        I wonder why?
        ^_^

        hyphenatedamerican says:
        “You know that you lost after you made a claim that US economy was in
        recession through the entirety of Reagan’s second term and all of Bush
        Sr. term – and could not bring yourself to acknowledge that.”
        ==
        So you just diappeared without any explantion *and* changing your status to “private”?

        Couldn’t you come up with better excuse?

        If you disagree Bush sr, lost the elction because of slow economy, what else would you suggest the reason of the loss?

      • hyphenatedamerican

        If you disagree that Bush Sr easily won the election in 1988 due to good economy, what else would you suggest the reason for his win? You said the economy was in recession in 1988.

      • allgoo19

        hyphenatedamerican says:
        “If you disagree that Bush Sr easily won the election in 1988 due to good
        economy, what else would you suggest the reason for his win? You said
        the economy was in recession in 1988.”
        ==
        Black Monday took place in 1987. It wasn’t that long ago.
        Bush sr. had to explain for much longer period period of recession in 2002 reelection.

        And he couldn’t convince it wasn’t hi fault nor economy wil get better.

        You only asks a question for the question, never answer it.
        Why?

        Unanswered.
        “Why Bush sr. lost the reelection in 2002 if not for the slow economy?”

      • hyphenatedamerican

        Bush Sr. got 53.4% of vote in 1988. Explain why he won, if according to you, economy was in deep recession.

      • allgoo19

        hyphenatedamerican says:
        “Bush Sr. got 53.4% of vote in 1988. Explain why he won, if according to you, economy was in deep recession.”
        ==
        When re you going to answer this?

        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

      • allgoo19

        hyphenatedaemrican says:
        “Bush Sr. got 53.4% of vote in 1988. Explain why he won, if according to you, economy was in deep recession.”
        ==
        1) The opponent was weak.
        2) The recession wasn’t his fault(at least to the voters’ eyes).
        You already forgot who created Black Monday?
        Next four years it was all his fault (at least to the voter’s eyes ) to bring the economy back.

        Now, you answer this.
        Unanswered,
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

      • allgoo19

        hyphenatedamerican says:
        “By this logic, if you make..”
        ==

        How I missed you, hyphenatedamerican(private).

        Now answer this question you left behind.

        “Name the last US president who had liberal economic policies.
        Did Clinton have liberal economic policy in your mind? If so, which policy signifies that, deregulation of GSA, trade agreement such as NAFTA or something else?”

        * I looked at all my comments and couldn’t find my comment saying, “Rand got more money than she paid in.” All I found was this, “Medicare and Social Security: What you paid compared with what you get” http://www.politifact.com/truth-o-meter/article/2013/feb/01/medicare-and-social-security-what-you-paid-what-yo/ “In most cases, people get more from Social Security and Medicare combined than they put in, ”
        * Medicare program started in 1966(Rand 61yr. old), in 4 years, she was eligible for the benefit. She died of lung cancer from her cigarette smoking habit.

      • Henry L

        Good comparison!

      • allgoo19

        Henry L says:
        “The proof? Government promulgates regulations in order to prevent
        business people from doing things they would be doing in the pursuit of
        profits.”
        ==
        I ‘m asking you the article that explains it, not repeating your opinion without explanations.

        Henry L says:
        “When profits are reduced there is less money to hire new people.”
        ==
        More likely, what’s going t happen is the reduction of CEO bonus.

        Company decides the number of workers based on the production volume, not based on the profit.
        Do you think the companies hire workers as much as their profit can afford?
        Are you kidding?

      • allgoo19

        Henry L says:
        “When profits are reduced there is less money to hire new people.”
        ==
        Let me ask you this way.

        Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.

        “As Corporate Profits Rise, Workers’ Income Declines”
        http://www.nytimes.com/2011/08/06/business/workers-wages-chasing-corporate-profits-off-the-charts.html?_r=0

      • Henry L

        As I understand you, you need to use some liberal rag to make the point for you.
        I come from a business environment, have been in business most of my life, and I submit to you that any time a company has a good end of the year balance sheet business expansion will be a top item at the conference table. For that more employees are needed.

      • allgoo19

        Henry L says:
        “I come from a business environment, have been in business………”
        ==
        Your comments prove otherwise.
        You don’t have to brag about your credentials, you just prove it, by your comments

        Unanswered,
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

      • allgoo19

        Henry L says:
        “When profits are reduced there is less money to hire new people.”
        ==
        What this silence means?
        This means that you have no answer?

        Unanswered,
        “Do you know any company says they made a good profit so they’ll hire more workers but for no other reason?
        If you do, name one.”

        “As Corporate Profits Rise, Workers’ Income Declines”
        http://www.nytimes.com/2011/08

  • Henry L

    First of all, the more government regulates, the more jobs will be lost. That is axiomatic and no amount of economic hypothecating can disprove it.
    I wished that the chemists at the EPA would, once and for all, explain how ozone is being created out of exhaust fumes. Ozone is tri-atomic oxygen, created by UV energy reacting with di-atomic oxygen. So how does the engine create the free oxygen to be converted to ozone? And if, miraculously ozone is being created by first detaching oxygen from the oxides leaving the engine, where is the chemical equation how that is happening? Furthermore, if indeed it is happening it would still have to be tri-atomic oxygen, or it is not ozone. And ozone is very clean; it has a slight pudgy smell but totally different from the various oxides and nitrites produced by oxidizing hydrocarbons. Then again, if there is no sunshine it could not be happening at all.

    • Dano2

      First of all, the more government regulates, the more jobs will be lost.

      The entire world awaits evidence for this axiom.

      Best,

      D

      • Henry L

        Your calling my elucidation pertaining to ozone a comedy skit tells me that you didn’t understand it and are not interested in serious debate.
        Good bye.

      • Dano2

        Psssssst….you have to have command of basic facts before you can engage in serious debate.

        /captain obvious

        Best,

        D

    • Henry, thank you for your comment. Putting aside the chemistry of ozone formation, I did want to point out that my blog was not based on “economic hypothecating.” Rather, I looked at the actual private jobs creation numbers under two presidencies, one with a robust EPA, one without, and observed that there was much greater net job creation under the former than the latter. The study cited by Michael Lipsky supports this observation as well.

      • Henry L

        But who can prove a cause and effect correlation?
        Too many studies start off with the conclusion followed by an analysis towards that conclusion.
        There is no way government can create more jobs by interfering in the free market.