Green Regulations Slowed Wage Growth

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Green Regulations Slowed Wage Growth


Last year, federal environmental regulations cost small U.S.
manufacturers $15,747 per worker -- dwarfing small firms' combined cost
of tax compliance ($2,582 per worker), economic regulations ($2,577),
and workplace regulations ($1,014). Green regulations may become a
major public worry if the economy turns south.

But according to the Independent Institute's Craig S. Marxsen and
Carl P. Close, "workers already have plenty of reason for concern
because for much of the past 30 years, environmental regulations have
slowed the growth of U.S. labor-productivity and workers' weekly

Marxsen and Close also contend:

o From 1973 to 1995 "real weekly earnings -- what workers took
home in inflation-adjusted dollars -- actually

o From 1974 to 1986 "multifactor productivity -- the
efficiency of labor, machinery, and other inputs working
together -- had fallen about 11.4 percent short of where
it would have been without the Environmental Protection
Agency's (EPA) heavy hand."

o Although productivity growth accelerated in the late 1990s,
it mostly touched six economic sectors less
affected by environmental regulations.

They conclude by calling for Congress to make the EPA more
transparent and to reduce the agency's discretionary authority.

Predictions of eco-catastrophe, Marxsen and Close write, "haven't
panned out except in one respect: They fertilized a federal bureaucracy
that has imposed huge costs on businesses -- costs that have
disproportionately dampened the growth of productivity and workers'
earnings. The time has come for policymakers and the public to
re-think their commitment to the EPA's costly environmental

Source: Craig S. Marxsen and Carl P. Close, "Environmental Doom and
Economic Slowdown: A Self-Fulfilling Prophecy," Independent Institute,
October 27, 2005; and Robert Higgs and Carl P. Close, eds.,
"Re-thinking Green: Alternatives to Environmental Bureaucracy,"
Independent Institute, April 1, 2004.