What Federal Regulations Mean for Your Family

Rob Schwarzwalder | Family Research Council | Tuesday, May 05, 2015

What Federal Regulations Mean for Your Family


Family Research Council is a pro-family organization, which is why we’re concerned about the costs government imposes on families.

 

Families are wrestling with all kinds of economic issues, from how to pay the rent or mortgage to how to afford braces or, in some especially sad cases, how simply to put food on the table.  

 

Adding to their burdens is the cost of federal regulation.  How?  The regulatory burden creates great economic hardship on untold thousands of companies nationwide – firms large, mid-sized, and small, in every industrial sector and in every community in America.

 

These companies produce goods and offer services not by some magical process but by the hard work and innovation of people, men and women and young people who are trying to create better lives for themselves and their families.  And when businesses have to bear undue regulatory burdens, those people suffer in lost hours – or lost jobs.

 

Yes, some regulations are prudent.  All of us want clean air and clean water.  We want to know that the food we buy is safe to eat and that otherwise negligent parents will be held legally accountable for not buckling-in their children.

 

But many regulations are clamped-on to American businesses by bureaucrats who themselves have never created a job or met a payroll.  Their inexperience in the competitive open-market economy is exceeded by their furtive desire to control it.  Micromanagement from windowless offices in a far-off capital: this has become the practice of the modern administrative state.

 

According to the American Action Forum (led by former Congressional Budget Office director Douglas Holtz-Eakin), from 2007 through early 2015, 2,900 federal regulations have been finalized at an estimated cost of more than $790 billion and 512 million hours of filling-out mandatory forms and compliance records. 

 

These numbers are so staggering that they make one’s eyes glaze, but what they mean is that more companies will hire fewer employees and pay less to existing workers because they have to find ways to pay for the costs of federal rules.  They will also pass some of those costs along to consumers, who will find goods and services priced a bit higher, incrementally and steadily.  When all businesses pass along those costs, and do so for a protracted period, the ordinary American gets hit harder and harder in the checkbook.

 

In real terms, then, how do these costs break-down?  In 2013, The Journal of Economic Growth published a study by two university professors asserting that “the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now.”

 

Let’s say the authors of the study, John Seater of North Carolina State University and John Dawson of Appalachian State University, were off in their calculations – way off.  I don’t know if they were or not, but for the sake of argument, let’s say they miscalculated by a factor of ten (I’m conceding a huge amount of fiscal ground here, but there’s a purpose to it).  Instead of $277,000, then, they misplaced a decimal point such that the number they used should have been (for rounding’s sake) $28,000.

 

Using 2013 dollars, this means that a median-income household income would be $81,000 annually, a sum most Americans only dream of.  And I doubt Professors Seater and Dawson are such bad mathematicians that they were off nearly as much I am, for the sake of supportive argument, suggesting.

 

What to do?  Many political leaders call for regulatory change and some even have specific and helpful proposals to modernize and improve the regulatory process and simplify the existing regulatory jungle.  But these things must be accompanied by a change in the mind-set of the American people toward their government in Washington.  

 

The ostensible purpose of the regulatory apparatus is to make Americans less vulnerable to everything from predatory lenders to rotten fruit.  As noted earlier, that motive might be noble and some of its practical effects worthy, but one of the key dangers of regulation is to promote the attitude that profit is evil, initiative is greedy, people of means are heartless, and that the benevolent and omniscient federal state will protect regular Americans from them.

 

The great majority of people in business are honorable.  Some aren’t, and even those who are sometimes make errors of judgment.  But these things don’t justify the wholesale imposition of ball-and-chain-like rules on banks, bakeries, and all manner of businesses.  

 

More importantly, for many Americans to have a supine-like posture toward and infantile confidence in the wisdom and compassion of all things Washington is wrongheaded.  Many federal employees work very hard, study their issues thoroughly, and propose healthy safeguards.  And the passive (and sometimes active) irresponsibility of corporate America (little firms, big firms, in-between firms) doesn’t help matters.

 

Yet from the ludicrous mandates of Obamacare to “a provision to require the Department of Agriculture to impose a tax of 15 cents on every fresh Christmas tree to fund a promotion campaign for the industry,” many federal regulators and their (active or passive) supporters in Congress are intrusive, nanny-ish, and uncaring about the costs of their rules not just on companies and workers but on families.

 

Families matter.  They are the foundation of a healthy society.  And when they are being suppressed by burdens they need not bear, attitudes and actions that inform such suppression need to change.

 

 

Schwarzwalder is the author of the FRC publication, The State of Your Family’s Economy, 2015.

 

Publication date: May 5, 2015

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