Beetles vs. Jobs

Aug 29, 2011
This article is part of a series called Opinion.

Regulations are strangling job growth

Businesses are sitting on about $2 trillion in cash. That’s enough to fund 27 million jobs, or reduce unemployment to near zero. So what’s keeping them from spending? The economy is slowing from what was already a very tepid recovery. But even with greatly reduced expectations, job growth coming out of the recession has been far below what should have occurred based on historical precedents.

For a clue why this is, look no further than the environmental impact statement report on the proposed pipeline to bring crude oil from Alberta to refineries in Oklahoma and Texas. The project is estimated to create more than 138,000 jobs and invest over $20 billion in the U.S. economy. However, those benefits have to be weighed against such critical factors as “the impact on beetles” — a subject of considerable study in the report, among other things. The report concludes that there is no significant environmental impact because of the project, but tell that to the beetles. Since they have no legal standing, the government has come to their defense. The EPA is doing everything and then some to block the project.

I’m From the Government and I’m Here to Help

When it comes to job creation, the government’s public position is completely at odds with its actions. Take the newly minted ozone regulations proposed by the EPA. The agency itself admits that (I kid you not) the technology required to comply with its standards doesn’t exist and that the benefits are based on highly dubious assumptions. And just what are the benefits that the EPA seeks to achieve? A reduction in the concentration of ozone in the atmosphere by 10 parts per billion. And just to drive home the point about how smart an idea this is, EPA administrator Lisa Jackson concedes that scientific support for the new standards is “limited” and any benefits to people or vegetation (yes, vegetation) may be hard to measure.

Conservative estimates of the impact of these regulations show that it will result in the loss of over a million jobs in the already reeling construction industry over the next 10 years, as businesses are required to invest close to $1 trillion to meet the requirements. The EPA projects that the new standards would force about 20% – 30% of U.S. counties into non-compliance, requiring them to spend on expensive emissions control technologies (yet to be developed) or failing that, take industrial capacity offline … in other words, force several hundred thousand people into unemployment. Well, we already have 25 million people unemployed, so what’s a few hundred thousand more? Who would even notice?

And the list goes on and on. We also have the boondoggle involving the National Labor Relations Board’s opposition to Boeing setting up a huge manufacturing plant in South Carolina, instead of Washington — since the South Carolina facility will be a non-union site. That the plant will create 13,000 jobs is apparently not a consideration for the NLRB.

These are not isolated examples. Regulations of all sorts exist today to limit just about any type of project. The President keeps talking about funding “shovel-ready” projects, but it takes between three and seven years from the time a project is conceived to the time the first shovel can get into the ground, because of regulations. Amazingly, the government is unwilling to even help its own agencies that want to do something about job creation. The pipeline project mentioned above is being championed by the State Department since the oil originates in Canada. It was first proposed in 2008, but three years later the project is still in limbo because the EPA refuses to accept the claim that there’s little impact on beetles, and a much greater one on humans.

But then, no price is too high to pay if it means fewer parts per billion of ozone or happier beetles.

This article is part of a series called Opinion.