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Wednesday, August 10, 2011

Regulations and Jobs

For a long time now the Federal and State Governments have been trying to improve the lot of the American People by providing regulations against those things which tend to harm people or degrade life.  Often it is the regulation of the Government that allows industries to do what they might think is correct, but can't because of fear that other companies will not follow suit, or the belief that if they work with other companies to cut a deal it will be seen as action in restraint of free trade.

On the other hand, as with everything in life, there is a tipping point where good actions turn bad.  An example is bicycle helmets.  Everyone is wearing them but there has also been a noticeable drop in the number of children riding bicycles, which could well contribute to an increate in obesity.  Where is the point at which it all goes bad, or even just starts to go bad?  Author Virginia Postrel talks about this here.

A friend of mine has twice pointed out to me that OSHA (Occupational Safety and Health Administration) has decided that its writ can and should run to include those small businesses that work on private homes.  This is a new development, but it is significant.  Per my friend, who is engaged in home restoration, OSHA is bringing industrial strength fines along with its inspections.  Already companies are dropping out of the business.  This means fewer companies to do the work.  Capitalism being what it is, there will be higher prices as more home owners chase fewer contractors.  Higher prices means more homeowners taking the work inside and doing it themselves, including shoveling roofs.  It also means that there will be more out of work roofers and bricklayers and the like.  People have already been laid off, per trade magazines.

Now comes Senator John Barrasso, MD, Vice Chairman of the Senate Republican Conference.  He is claiming that during the 31 days of July the current Administration has created 229 proposed rules and 379 final rules that have a $9.5 Billion impact in terms of increased regulator costs.  This is something that is bound to hold back a sluggish economy.

I will stipulate that the number Senator Barrasso gave us is wrong.  It is an estimate and we can all find things in estimates with which to quibble.

The point is the trend.  Our regulations are ever growing, in all walks of life.  As a result, we are making trade-offs between between one part of the environment and another.  As human beings we ARE part of the environment and we should have our lives considered along with all the other flora and fauna.

Twenty jobs here and 35 jobs there, and the ripple down to greeters not being hired at WalMart and pretty soon it all adds up to 9.1% unemployment.  Political Analyst Michael Barone talks about this here.

Regards  —  Cliff

4 comments:

Anonymous said...

Regulations are devices by which the enlightened control the great unwashed...but want to do so without the slower, much less assured LEGISLATIVE process. Moreover, the more regulations that are "promulgated" (I LOVE that bureaucratic term...) the greater the need for regulators.....those mindless automatons who enforce dispassionately the words as written.

Regulators cost money but produce nothing but compliance. Their pay is provided by taxpayers who, at least 49% of them, are actually paying taxes.

We don't need more COSTS. We need more profits...and profit generation is achieved ONLY by those folks in private industry...you know...those dastardly capitalists....the ones who want to work for money and keep as much of it as they can without being caught by the regulators.

Jack Mitchell said...

It was just Tuesday, on City Life, that I heard a candidate talk of tripling fines for folks that did not comply with city ordinances.

Of course, OSHA could potentially run off gypsy pavers and other scam artists, limiting the pool of contractors to those professionals that place a premium on protecting their workers and providing craftsmanship.

Though it will cost the homeowner more, but as they say, you get what you pay for. And I'm sure the next chap to own the place will be glad that a mickey mouse crew didn't blow through, taking their tidy profit and leaving behind substandard work.

In my construction experience, which was heavy civil in nature, you could always tell the good crews from the bad by their attention to safety. The better crews could do it all, well.

C R Krieger said...

When I was a senior in high school my then girlfriend's Father was a VP in a Federally Chartered Savings and Loan (they lived up on Pill Hill), which was switching to a State Charter, since the Federal Home Loan Bank Board was acting, in their minds, in an abusive way.

Here is a bank in Texas doing practically the same thing.  I expect we will see more of this.

Regards  &mash;  Cliff

Michael S. Ready said...

As Cliff’s yet unnamed micro-business contractor “friend”, I’d like to thank Cliff for bringing forth to his readers an issue that we have shared in conversation over this past year – overregulation, its detrimental effects on our economic viability and potential for recovery and my personal experiences and observations having had to deal with it as a licensed home restorer. Specifically that of OSHA and the EPA.

Kudos also to commenter nealcroz for his well written, articulate and completely accurate perspective of our ever-growing regulations and the overzealous agents who are mobilized to enforce them. Right on nealcroz!

And then there’s Mr. Jack Mitchell.... In response to Cliff’s July 8, 2011 article Unemployment Stats for June, and specifically Cliff’s disclosure that the contractor working to restore Lowell’s Immaculate Conception Church had just received a $50,000 fine from OSHA, Mr. Mitchell commented that businesses driven out by regulations “Usually they are the fly-by-night gypsy rip-off artists” and “I can’t help but care little while scam artists cry”.

Although I am not surprised at the animosity held by many toward building contractors and home repair specialists based on an ever increasing level of poor workmanship (often for which I have been called on to assess and/or correct), I can, with complete confidence, concluded that any contractor working on the spectacular 19th century architectural marvel that is the Immaculate Conception Church, could not be considered a “scam artist” or “gypsy paver(s)”. Being of solid granite, iron, slate and copper, the Immaculate project would only be accessible to those specialists who are tops in their field.

I also find it interesting how our regulation loving Americans always vilify the targets of our regulatory agencies oppressive powers. “Let's justify it by immediately demeaning the victim.” Isn't that what they did for years with rape victims? ‘You must have asked for it’, ‘your skirt was too short’, ‘your blouse too low’, etc., etc. Automatically, any contractor who receives a citation is a "scam artist" or hack.

Furthermore, in response to this most recent well written article by Cliff, Mr. Mitchell writes: “Of course OSHA could potentially run off gypsy pavers and other scam artists” thus “limiting the pool of contractors to those professionals that place a premium on protecting their workers and providing craftsmanship”. Mr. Mitchell is actually 180 degrees off the mark on this one.

The facts are that the licensed, documented and insured contractors are the most likely to be hit by OSHA and the EPA under their newly expanded regulatory assault. This is due to the fact that OSHA routinely courts local building inspectors to act as snitches and only licensed and insured contractors can pull permits. Therefore, the most legitimate are the most visible on OSHA’s radar. Also, OSHA field agents check the public records in all of the town and city halls for permit-pulls to chase after.

One city building inspector was gutsy enough to write a letter to one of my trade magazines – the Journal of Light Construction - a few months back and stated that he would never snitch on the citizens of his town to accommodate OSHA's subversive actions. Was this not a common method of enforcement and oppression in communist East Germany by their feared Stasi? Also, OSHA is now giving bonuses to its field agents based on the total fine dollar value issued. As the many letters to my trade magazines express, only the unlicensed "gate slammers" will be left when all is said and done. And, unfortunately, many more letters are expressing the decisions by America’s best and most trustworthy building contractors to get out of the business and lay off all of their workers.