Here is the article I mentioned the other day when I was at the beach and, not the rub it in, you weren't (and I was hoping Tim would do my work for me):
Many economists agree that regulation comes with undeniable costs that can affect workers. Factories may close because of the high cost of cleanup, or owners may relocate to countries with weaker regulations.
But many experts say that the effects should be assessed through a nuanced tally of costs and benefits that takes into account both economic and societal factors. Some argue that the costs can be offset as companies develop cheaper ways to clean up pollutants, and others say that regulation is often blamed for job losses that occur for different reasons, like a stagnant economy. As companies develop new technologies to cope with regulatory requirements, some new jobs are created.
I would argue that the effects of environmental regulation shouldn't be assessed based on the net change in jobs that result. Regulations that generate costs and benefits should be assessed on those, and jobs shouldn't be included in a benefit-cost analysis (except in their role as a cost of doing business). The benefits of environmental regulations are the improvements in health, recreation and other good things that the regulations generate.
[Michael Greenstone, an economist at the Massachusetts Institute of Technology] has conducted one of the few studies that actually measure job losses related to environmental rules. In researching the amendments to the Clean Air Act that affected polluting plants from 1972 and 1987, he found that those companies lost almost 600,000 jobs compared with what would have happened without the regulations.
That is about 40,000 jobs per year.
But Mr. Greenstone has also conducted research showing that clean air regulations have reduced infant mortality and increased housing prices, and indeed many economists argue that job losses should not be considered in isolation. They say the costs of regulations are dwarfed by the gains in lengthened lives, reduced hospitalizations and other health benefits, and by economic gains like the improvement to the real estate market.
Housing prices go up because as air quality improves the demand for housing does as well. I'm not sure if this is an aggregate increase in housing prices ... demand for housing (and prices) falls in areas where air quality is relatively poor.
The story ends with one of my favorite themes:
Finding a middle ground is difficult, especially in the midst of heated political wrangling over how to cope with the sputtering economy. Businesses are focusing almost entirely on the costs. Environmental groups, meanwhile, tally up the benefits without paying much heed to the costs.
“My view is that the Republican claim that ‘job-killing regulation’ is a redundancy is as ridiculous as the left-wing view that ‘job-killing regulation’ is an oxymoron,” said Cass Sunstein, head of the White House Office of Information and Regulatory Affairs. “Both are silly political claims that have no place in a serious discussion.”
