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<H1>Regulation: Not the job killer GOP says</H1><SPAN class=byline>By Charles
Riley</SPAN> <SPAN class=twitterName>@<A href="http://twitter.com/CNNmoney"
target=_blank>CNNMoney</A></SPAN> <SPAN class=cnnDateStamp>October 14, 2011:
5:44 AM ET</SPAN>
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<P>NEW YORK (CNNMoney) -- Want to help the economy and create jobs? Well, roll
back those government regulations! It's a talking point trumpeted by nearly
every Republican politician. But would less regulation really spur hiring?</P>
<P>The story goes like this: Thanks to the Obama administration, a wave of new
government regulations are strangling business to the detriment of hiring and
economic growth.</P>
<P>But in an economy with serious structural problems, a <A
href="http://money.cnn.com/2011/05/31/real_estate/march_home_prices/index.htm">crippled
housing market</A> and slack demand, is government regulation really holding
back the labor market?</P>
<P>Not so much, according to government data and surveys of business owners and
economists.</P>
<P>Only a small percentage of employers report regulation as a reason for laying
off workers. </P>
<P>In the first two quarters of this year, only 2,085 new unemployment claims
were attributed to government regulation, while 55,759 were tied to insufficient
demand, according to Bureau of Labor Statistics data on mass layoffs.</P>
<P>Furthermore, less than 20% of small business owners cite government
regulations as their most important problem, according to a survey by the
National Federation of Independent Business. </P>
<P>Poor sales, for example, were a much bigger worry.</P>
<P>And a CNNMoney survey of economists conducted in the second quarter delivered
similar results. Only a couple of the 16 economists questioned said government
regulation was the biggest drag on the labor market.</P>
<P>Gary Burtless, a labor economist at the Brookings Institution, said there is
little evidence to suggest that government regulations are killing jobs. </P>
<H2><A
href="http://money.cnn.com/galleries/2011/smallbusiness/1109/gallery.regulation_nightmares/index.html">Regulation
nightmares</A></H2>
<P>"There is a lack of confidence that demand would exist for the extra products
businesses would produce by increasing hiring," Burtless said. </P>
<P>So if not regulations -- what is the biggest problem? One prime suspect is a
lack of demand for the goods and services that businesses produce.</P>
<P>"I think it's pretty plain that there hasn't been a robust rebound in
consumer consumption," Burtless said.</P>
<P>And Burtless said complaining about regulations is not something new for the
business community -- which can of course lower costs and increase profits if
regulations are repealed.</P>
<P>"There are certain businessmen who say regulation is an issue, but they also
said the same thing when the economy was robustly growing," Burtless said. </P>
<H2><A
href="http://finance.fortune.cnn.com/2011/09/02/on-labor-day-a-grim-picture-for-workers/?iid=HP_Highlight">A
grim picture for workers</A></H2>
<P>But there is an additional wrinkle to the Republican argument: It's not just
the regulations already on the books that are causing trouble. Instead, it's an
anticipated wave of new rules coming down the pike.</P>
<P>"The real cost at the moment is the business community can't figure out how
much regulation is coming," said Douglas Holtz-Eakin, a former director of the
Congressional Budget Office.</P>
<P>Two measures -- the 2010 <A
title="http://money.cnn.com/2010/03/22/smallbusiness/small_business_health_reform/
CTRL + Click to follow link"
href="http://money.cnn.com/2010/03/22/smallbusiness/small_business_health_reform/">health
care law</A>, and the <A
href="http://money.cnn.com/2011/07/21/news/economy/dodd_frank_reform/">Dodd-Frank
financial reform</A> law -- are at the center of that complaint. </P>
<P>Burtless doesn't find the "uncertainty" argument convincing.</P>
<P>"Those laws haven't gone into effect yet. How are those things limiting
jobs?" he asked. "I think you've got to actually make the case that lots of
regulations have sprung up since January 2009 to make this complaint carry very
much water."</P>
<P>That doesn't mean regulations don't raise costs for business. They do. Still,
they are not the biggest drag on the labor market.</P>
<P>"In the end, if you've got money pouring in hand over fist, additional costs
of any sort look insignificant," Holtz-Eakin said.</P></FONT></DIV>
<DIV><FONT size=2 face=Verdana>_______________________________</FONT></DIV>
<DIV><FONT size=2 face=Verdana>Wayne A. Fox<BR><A
href="mailto:wayne.a.fox@gmail.com">wayne.a.fox@gmail.com</A><BR></FONT></DIV></BODY></HTML>