Job-Killing vs People-Killing, the Case for Regulation

Job-Killing vs People-Killing, the Case for Regulation
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

Consider the hard-hat. It is required on construction sites, in mines, and so forth. It costs money, so it is a job killer. Would anyone want to eliminate a regulation requiring hard-hats? Doubtful. The connection between risk and protecting lives is clear. The cost is relatively low, and the benefit relatively high.

Consider water pollution. EPA regulations require all major industries to install the best practicable treatment for wastewater, before discharge into the waters of the U.S. This levels the playing field for industry, so one location is not easier to pollute than another.

Water treatment often is expensive, so it is a job-killer. Would anyone want to eliminate the requirement to clean up wastewater? Doubtful. We want fishable, swimmable, drinkable water. We could and do argue about the level of treatment required, trying to measure the costs against the benefits of each regulation.

Consider air pollution. EPA is required to set air quality standards at levels to protect human health and welfare. Again, regulations require treatment before emission of industrial gases into the atmosphere. Cleaning industrial gases is a job-killing requirement. Would anyone want to eliminate the air quality standards? Doubtful, but in this case the link between the costs (measurable) and the benefits (the health of our population) is not as easy to see.

The less direct and obvious the links among the risks, the costs, and the benefits, the harder it is to justify imposing costs on business. The analysis can get complicated.

While Trump and the Trumpettes thunder against job-killing regulations, few among the press ask questions about the benefits. They have forgotten the balancing act between costs and benefits. More importantly, they have forgotten that every major Federal regulation (cost over $100 million per year) must have a detailed cost-benefit analysis before adoption.(1) They need to look at these analyses and learn how to question the claims of job-killing.

Here is a good example: the mercury and air toxics rule (MATS). Coal and oil-fired power plants are required under the rule to significantly reduce emissions of mercury, arsenic, lead, chromium, and acids. In effect, it requires installation of emission control equipment and affects many of the older and less efficient power plants in the nation.

Why is the MATS rule important? These power plants collectively emit about 50% of the mercury and 20-60% of the toxic metals emitted annually. These toxic metals can affect the nervous system, causing a range of harmful health effects. There is a significant and long-standing dispute over both the costs and benefits of compliance.

EPA’s cost-benefit analysis estimates that for every dollar of cost, there will be around four to nine dollars of health benefits. (2) Now this is a very favorable cost-benefit ratio. Plus, the rule may create over 40,000 short-term construction jobs, and 8,000 long-term jobs at the power plants. The industry, of course, disputes both the costs and benefits, charging that EPA underestimated the costs and overestimated the benefits.

EPA estimates the benefits as follows: saving up to 11,000 premature deaths a year; avoiding 4,700 heart attacks a year; avoiding 130,000 asthma attacks a year; eliminating 5,700 hospital and emergency room visits a year; saving 3,200,000 restricted activity days a year; and avoiding 2,800 cases of chronic bronchitis a year. (3)

The trouble with these benefits is that they are not easy to see on a day-to-day basis. They only can be tallied on a statistical basis, which is not like seeing dead fish in a stream. Yet, these adverse health effects are real.

Consider just the number of premature deaths avoided. Many studies of public attitudes over several decades have concluded that the public puts a price on human life of between $3 million and $9 million dollars. (4) Taking $5 million and multiplying by 11,000 premature deaths gives a figure of $55 billion a year as the worth of the lives saved. Not a bad return on investment.

Nonetheless, the Trump administration on 18 April asked the Federal Court of Appeals to delay hearing arguments while it reviews the rule. If Trump abandons the MATS rule, will he be saving jobs or killing people? Will he choose to become a murderer? Think about it the next time Trump calls something a job-killer, or the press forgets to ask about the benefits of regulation.

Popular in the Community

Close

What's Hot