Tuesday, October 25, 2011

Regulations vs jobs.

I have said before, regulations create jobs.

There are three things we regulate:

  1. Processes
  2. Products
  3. People

When we regulate a process, it can either be movable or immobile.  An example of a process regulation is requiring the manufacturer not to pump lead and arsenic into the air.  Similarly, requiring that a pharmacologist see your ID before selling you Sudafed is a process regulation.    Immobile processes are hard to out-source, while movable ones are relatively easy to outsource.  Examples of immobile process include sewage treatment, electrical generation, bridge building, tunneling, etc.   Movable process are more common, as most products can be built anywhere and moved.   In either case, regulations create MORE jobs, not less.  If the process is immobile, the manufacturer hires new people to do the required process.  However, if the process is portable, the new jobs MIGHT be transportation based, as the process gets outsourced to an area that does not have the regulation and the net change is someone else gets those jobs while only a few more transportation jobs are created.  Net net, the world benefits, even if the country suffers a bit.  But in both cases regulations decrease the profits of the existing corporations while creating new jobs.

An example of a product regulation is requiring the end product to have extra features.  Cars must have seat belts, tobacco must have warning labels, dangerous medicine must have child-proof caps, are all product regulations.   Unlike a mobile process regulation, you can't move production overseas to avoid the regulation.   Here new jobs are created and in the same country that passed the regulation.  

There are two types of people regulations:  limitations and verifications.   An example of limitation regulations are requiring doctors, barbers, and taxi drivers to have licenses.  This is the ONLY form of regulation that actually decreases jobs.   But businesses usually don't complain about these regulations.   Usually they like them.  Existing businesses do not wants the competition in the case of of licenses.  Verification is another story. Here, government requires the business check to see if the employee is appropriate (sex offenders from teaching at schools, or requiring businesses to check immigration status).   This does not decrease jobs, it increases them (they need to pay someone to do the checks).  But businesses don't like doing the government's job for free.

When the GOP claims that government regulations kill jobs, they actually mean that a regulations on mobile processes that don't kill jobs, it just moves them over seas  (which actually adds transportation jobs to the world job market).    But then they use that as excuse to destroy many job creating regulations - such as the ones requiring power plants to clean up their pollution (cleaning up pollution costs money - which goes to pay people to do the cleaning or to build the devices that do the cleaning).

Some regulations are short sighted.  Maybe we don't need to be too strict.  But I know one thing - the world is not clean.   Cancer rates, autism rates, attention deficit disorders, allergies, they are all on the rise.   Human health is impaired as compared to what it 1,000 years ago, let alone 100,000 years ago.  Some of it may be due to greater medical care allowing for greater life spans and propagation of genes that might once have been eliminated by harsh methods.  But I bet some of it is caused by all the pollution that the GOP is not at all concerned about. 

But here are some facts the GOP does not like to admit:

  1. Every single power generation and utility regulation INCREASES jobs.
  2. Every single regulation that requires features on a product INCREASES jobs.
  3. Business by a far majority, love regulations that prevent other people from competing with them.
Businesses do dislike regulations that require them to  do the government's job, nor do they like regulations that prevent them from dumping pollution into the air, water, and ground that we breath, drink, and grow food on.  But funny how they don't do that on property the owners live on.

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