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Published: March, 2011; Vol 7, Num 10

 

Do Regulations Kill Jobs?

The U.S. has lost millions of jobs over the last few years, and unemployment is at its highest rate since the Great Depression.

Is this because of an intensified regulatory environment, introduced with the Obama Administration? “Far from it,” says LIUNA General President Terence M. O’Sullivan.

Alternate description

LIUNA General President
Terry O'Sullivan

Budget Showdown This Week

Implications for OSHA

(THIS ARTICLE WAS UPDATED to include a two-week CR extension adopted on 03/01/11.)

The Battle of the Budget has been in the news for the past three weeks. Initially scheduled to come to a head on March 4, the resolution was postponed by Congress' decision to adopt a two-week, temporary extension.

Last year, when the Congress could not agree on the federal government’s FY2011 budget, it adopted a series of continuing resolutions (CRs) that have kept it in operation with basically the same budget that had been approved for FY2010.

According to the Constitution, the budget bill must originate in the House, and many House Republicans, seated since the last CR was adopted in December, are intent on cutting the budget for the remainder of this fiscal year (that is, through September 30). Aiming to cut $100 billion, they have proposed cuts in discretionary spending that average about 20 percent. Whatever cuts are enacted (or not), they are expected to be a blueprint for even greater cuts in the FY2012 budget.

Although Director David Michaels says OSHA is “doing everything possible” to promote jobs, the agency is targeted for extensive cuts (in millions):

Federal enforcement $41.3
State enforcement $14.9
Safety & Health standards 3.0
Technical support 4.2
Safety & Health statistics $34.9
Executive direction: 0.7

Advocates for workplace safety and health say these cuts will have a serious impact on OSHA’s ability to perform its mission.

Anticipating the House bill, the Democrat-controlled Senate is considering its response. If the Senate adopts a budget that is different from the House, the differences must be resolved in a House-Senate Conference Committee and approved by both bodies before going to the President for his signature or a veto. If the process breaks down at any point, the President must order the shut-down of some government operations and the lay-off of federal employees. Depending on how long and how extensive a shut-down becomes, each party, as well as each branch of the government, could face political repercussions.

The Obama Administration showed initial interest in strengthening federal regulation in certain areas, but it never got much going and, now, is backing away. Two years ago, the Administration had good reason to consider stronger regulation. It took office in the wake of the collapse of the nation’s unregulated banking system. Then, it witnessed the deaths of 17 miners at the Upper Big Branch mine, a mine that had frivolously appealed 57 mine safety citations to avoid required safety corrections. And a few months later, it endured the BP oil rig explosion that killed 11 workers, emptied five million barrels of oil into the Gulf of Mexico and revealed the sweetheart relationship between the oil industry and its regulators.

Nor did these disasters occur by sheer happenstance. They occurred against a backdrop of three decades of increasingly shrill agitation from business groups and conservative economists insisting that “the market” could regulate itself better than the government. Steadily, key regulations were retracted (in banking, especially), and the adoption of new ones ground to a halt (remember the ergonomics standard?). At the same time, courts and oversight bodies introduced procedural obstacles while funding for federal regulation and enforcement was pared to the bone.

Correctly and early-on, the Obama Administration indicated an interest in more effective regulation, but it was challenged by the Chamber of Commerce, the National Association of Manufacturers (NAM) and many powerful corporate interests that poured money into opposition candidates in the 2010 elections. Anti-regulation candidates regained control of the House of Representatives.

Playing Politics

“Now,” says O’Sullivan, “Capitol Hill is awash with talk of ‘job killing regulations,’ but hidden beneath this scare tactic is a broad-based attack on protective regulations of all sorts.” Last month, Representative Geoff Davis (R – KY) introduced H.R. 10, Regulations from the Executive in Need of Scrutiny Act (REINS), a bill that would require Congressional pre-approval of all major federal regulations. Newly elected Senator Rand Paul (R – KY) introduced REINS in the Senate. Meanwhile, Representative Darrell Issa (R – CA), the new chairman of the House Committee on Government Oversight and Reform, released over 1,900 pages of suggestions for regulatory reform that he received from American businesses. Then, the House leadership announced plans to cut the federal discretionary budget by 20 percent as part of the upcoming, March 4 vote on a continuing resolution to fund government through September (see sidebar).

Even President Obama, facing the reality of “divided government,” has stepped onto the anti-regulatory bandwagon. First, in an op-ed in the Wall Street Journal, he expressed unspecified agreement with the view that some regulations kill jobs. Next, according to Cass Sunstein, head of the White House Office of Information & Regulatory Affairs, he directed OSHA to withdraw two regulatory initiatives – a reinterpretation of “feasibility” with regard to engineered noise controls and the reporting of musculoskeletal injuries on the Form 300 – designed to address major workplace health hazards. Then, on February 7, he went to the Chamber of Commerce to offer a challenge on jobs while also extending a hand for on-going collaboration.

Where’s the Beef?

Nevertheless, say critics, despite talk of “job killing regulations,” the Chamber and NAM have demonstrated no proof of any link between regulations and job creation. Further, as other critics point out, these corporate lobbyists have long held undeviating policies of blanket opposition to virtually all federal regulation. Clearly, these special interest groups are manipulating public worry about jobs to pursue their strategic goal: the right of business to do as it pleases, unrestrained by government oversight.

Should workplace safety and health be left entirely to the scruples of executives seeking profit in dog-eat-dog competition with each other? Or is government regulation necessary to level the playing field, prevent a race to the bottom and avoid a return to the free-wheeling days of yore when even child labor was a “business decision?”(A Missouri lawmaker actually introduced a bill last month to weaken the state’s child labor law.)

When OSHA first contemplated a silica standard 40 years ago, safety professionals estimated that it would save 1,000 lives a year. Today, the nation still has no standard, and 40,000 more workers have needlessly died. Construction has no hearing conservation standard. As a result, millions of workers have been overexposed to noise, and thousands suffer with irreversible hearing loss. Stronger oversight by the Mine Safety and Health Administration and the Minerals Management Service, respectively, could have prevented the deaths of those West Virginia miners and the oil workers on BP’s Deep Water Horizon. These examples are the tip of the iceberg of the nation’s problem with on-the-job injuries, illnesses and fatalities.

“Regulations don’t kill jobs,” says O’Sullivan, “but the lack of regulation kills workers. That’s the plain and simple truth.”

[Steve Clark]