Job-Crushing Government Regulations That Crush Jobs

The Bureau of Labor Statistics breaks out the numbers behind layoffs in three quarters: 2010 Q4, 2011 Q1, and 2011 Q2. “Governmental regulations/intervention” gets a category all its own. So: What percentage of layoffs can be traced back to job-crushing government red tape?

In every quarter, the answer is “less than one percent.” In 2010 Q4, only 0.25 percent of “layoff events” were the result of regulation. In 2011 Q1, it was 0.4 percent. In 2011 Q2, it was down again to 0.3 percent.

Another way of looking at this: In 2011 Q2, 1,547 new unemployment claims were tied to regulation. That’s bad, but 19,151 claims were tied to “insufficient demand.” The number of claims tied to regulation, up big that quarter, were less than the number tied to natural disasters. If you’re making the case for a regulation moratorium, this proves your point. It also suggests that “cutting red tape” might not be an economic cure-all.