Don Brunell - U.S. Regulators shipping jobs oversees

Some members of Congress complain that American corporations are “shipping jobs overseas.” But an analysis by the U.S. Chamber of Commerce reveals that U.S. regulators are doing virtually the same thing due to the high cost of excessive regulations.

Federal rules alone in the past few years have exploded, and the Chamber finds it cost our economy $1.7 trillion. State labor and employment laws are costing the U.S. 700,000 jobs; paring back state regulations that exceed federal standards alone would spawn 50,000 new businesses each year.

The Chamber report is not an indictment of government regulations, per se. Most regulations serve a good purpose. For example, we all want to fly safely, and air traffic controllers are essential to managing air travel. Health inspections in restaurants, grocery stores and medical facilities are other examples of necessary government regulation.

But, it is expensive to comply with ever-changing and increasingly stifling regulations, leaving employers with less money to maintain or add jobs. As regulatory costs and administrative burdens mount, employers eventually hit a “tipping point” at which they have to close up shop or move out of country.

Maintaining a proper balance is critical because regulatory excess costs jobs.

For example, unable to win Congressional approval of its costly and controversial “cap-and-trade” legislation, the Obama administration is implementing the smothering air quality restrictions by regulation. The federal Environmental Protection Agency (EPA) has imposed a plethora of new air emission standards clamping down on all sources from homes to factories.

Now, thousands of employers must install pollution control equipment or retrofit their existing facilities to meet the new standards. Those investments take decades to recoup, yet in a few years, the standards will change again requiring yet another round of expenditures.

Ironically, when environmental regulations become too expensive, we lose both jobs and environmental protection. The U.S. jobs disappear and production is shifted to foreign countries where environmental standards are less rigorous.

Another example hit close to home recently. The EPA’s new air standards for biomass boilers that burn wood wastes to generate electricity were so stringent that it threatened to kill many projects in Washington. Thankfully, those standards have been delayed.

There’s a real irony here. Biomass boilers recycle dead, diseased and scrap wood that, if left on the forest floor, becomes fuel for wildfires that fill the air with greenhouse gases, ash and choking smoke. Washington Land Commissioner Peter Goldmark, who wants pilot projects to convert wood debris to energy, has butted heads with the EPA.

Why implement regulations that kill American jobs? Because U.S. lawmakers demand it.

For example, U.S. Rep. Eddie Bernice Johnson, D-Texas, claims that 10 cement plants in her home state emitted 225 pounds of mercury in 2009, and she wants the EPA to clamp down even harder on the plants, even though they’ve already cut emissions by 60 percent.

Rep. Johnson fails to point out that, according to the National Rural Electric Cooperative Association, 75 percent of annual mercury pollution in the U.S. comes from outside our country – more than a third of that from Asian cement production, where there are no environmental controls.

The industry projects that, if Rep. Johnson gets her way, we will lose 1,800 high-paying, family-wage jobs in the cement plants and another 9,000 jobs in the construction industry due to higher prices.

Result: Lost jobs here, production transferred overseas to countries with less stringent environmental standards. Fewer American jobs, more pollution. Presumably that’s not the result Rep. Johnson was looking for.

The bottom line is we need a balanced approach. Instead of regulators pushing as hard as they can with no thought of the lost jobs or economic damage, elected officials should ensure that federal, state and local regulators don’t ship any more American jobs overseas. That’s good for America, our working families and the global environment.

(Don C. Brunell is president of the Association of Washington Business)