A new report by the National Association of Manufacturers identifies more than $2 trillion in costs from federal bureaucracy. Specifically, the per-employee regulatory compliance costs work out to more than:

  • $19,500 on average across all manufacturers
  • $34,600 for small manufacturers
  • $18,200 for medium manufacturers
  • $13,700 for large manufacturers

Overall, according to NAM, the average  annual regulatory compliance cost for a typical American manufacturer amounts to 21 percent of payroll, more than $233,000. That cost comes from four regulatory areas:

  • $92 billion, occupational safety and health and homeland security regulations
  • $159 billion, tax compliance
  • $330 billion, environmental
  • $1,448 billion, economic (which includes legal challenges to regulation, and regulation of securities exchanges)

According to NAM President and CEO Jay Timmons:

Manufacturers are the backbone of our nation’s economy and employ more than 12 million men and women who make things in America. To maintain manufacturing momentum and encourage hiring, the United States needs government policies more attuned to the realities of global competition. Our regulatory system produces unnecessarily costly rules, duplicative mandates, impediments to innovation and barriers to our international competitiveness. Despite many initiatives and efforts to reduce the unnecessary regulatory cost imposed on businesses, the cumulative regulatory burden continues to expand. …

If we are to succeed in creating a more competitive economy, we must reform our regulatory system so that manufacturers can innovate and make better products instead of spending hours and resources complying with inefficient, duplicative and unnecessarily burdensome regulations. Manufacturers are committed to commonsense regulatory reforms that protect the environment and ensure public health and safety, while also promoting economic growth and job creation

This is a critical concern because as Watchdog.org’s Erik Telford reports:

Often, unreasonable blanket-style edicts and layers of bureaucracy hurt manufacturers. In fact, a recent analysis from the Phoenix Center for Advanced Legal and Economic Public Policy Studies, estimates that each federal regulator destroys an average of 98 private sector jobs and $6.2 million worth of gross domestic product per year.

Commonsense rules are one thing, but keeping people and the environment safe doesn’t have to come at the expense of jobs or economic growth.

The U.S. Senate will soon be considering the Regulations from the Executive in Need of Security Act, or REINS Act (H.R. 367, S. 15), which would require government agencies to get Congressional approval prior to enacting any regulations with an economic impact of $100 million or more annually. Analyses indicate this is a much-needed first step to restoring the federal government to its proper, constitutional bounds.