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Job creator, or job killer?

In certain political circles, it’s been accepted as fact that regulations destroy jobs.

But in a column for the New York Times, Bruce Bartlett, a former Reagan adviser and Heritage Foundation fellow, dismisses the idea as “a canard invented by Republicans that allows them to use current economic problems to pursue an agenda supported by the business community year in and year out.”

…the number of layoffs nationwide caused by government regulation is minuscule and shows no evidence of getting worse during the Obama administration. Lack of demand for business products and services is vastly more important.

So, while the case against regulations is often vastly overstated, these rules do have at least a modest impact on employment. And aren’t forthcoming EPA pollution rules responsible for all these impending coal plant closures we’re hearing about? Won’t that destroy a bunch of jobs?

In a recent post on Grist, David Roberts explains that yes, shutting down coal plants will put some people out of work. But because the public has to pay for the external costs associated with burning coal, these jobs are, in effect, heavily subsidized. The power plants that are shutting down are the worst polluters, and the least economically viable in the long term:

Why, in an economy that is struggling to emerge from a recession, not to mention a decades-long stagnation, should we pour hundreds of millions of dollars of subsidies into a relatively small number of jobs in coal plants that are already living on borrowed time and unpaid debt? Why is that the way we choose to do economic stimulus?

It is true that jobs will be lost when these rattle-trap death factories get shut down. Those who lose their jobs deserve respect and assistance. But it’s just as true that lives will be saved, public health and well-being will be improved, and the economy as a whole will benefit. The dead weight of this subsidized power will be lifted and newer, cleaner sources will compete to fill the gap, creating jobs in the process.

When considering the impact of regulations on the economy, it’s important to think in broader terms than the immediate, short-term impact. It’s even more important to think beyond political narratives that have little basis in fact.

Photo by Wigwam Jones via Creative Commons

Ken Paulman

Ken is the director of the Energy News Network at Fresh Energy and is a founding editor of both Midwest Energy News and Southeast Energy News. Prior to joining Fresh Energy, he was the managing editor for online news at Minnesota Public Radio. He started his journalism career in 2002 as a copy editor for the Duluth News Tribune before spending five years at the Spokesman-Review in Spokane, Washington, where he worked as a copy editor, online producer, features editor and night city editor. A Nebraska native, Ken has a bachelor's degree from the University of Nebraska-Lincoln and a master's degree from the University of Oregon. He is a member of the Society of Professional Journalists and Investigative Reporters and Editors.

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