Harry Reid: Regulations have nothing to do with killing jobs

Sen. Harry Reid, in a floor speech Tuesday:

Republicans “have yet to produce a single shred of evidence that the regulations they hate so much do the broad economic harms they claim. That’s because there is none,” said Reid, the Senate majority leader from Nevada.

In a Senate speech, Reid said the Bureau of Labor Statistics has concluded “only a tiny fraction of layoffs have anything at all to do with tighter regulation.”

“Last year, only three-tenths of 1 percent of people who lost their jobs were let go principally because of government regulation or intervention,” Reid said. “On the other hand, a quarter of them were laid off because of lack of business.

The Heritage Foundation’s James Gattuso explains the statistic:

The numbers come from the Labor Department’s Bureau of Labor Statistics (BLS), which, in cooperation from state authorities, tracks mass layoffs, defined as layoffs of 50 or more workers for 31 days or more. In each case in which such a “mass layoff” is identified, state authorities interview the employers involved, asking them (among other things) the reason for the layoffs. For the third quarter, BLS reported that 0.3 percent of respondents listed “governmental regulations/intervention” as the reason…

It appears to be a simple process, but it’s actually quite tricky. The first problem is that economic hardship does not come with labels. Employers know if their costs are rising but not necessarily whether it is due to new burdens imposed on their suppliers or other factors. They may know that they didn’t get the capital they needed but not if it was because investors had better opportunities or because of government financial rules. They will know if demand has slumped, but it’s not so clear whether it was because their product is valued less by the marketplace or because government rules choked off demand from customers. The actual causes are likely to be mixed.

But even if government interviewers could identify with precision the reasons for mass layoffs, that would tell us little about why unemployment is so high. Mass layoffs are only part of the job loss picture—job losses don’t always come 50 or more at a time. Most small businesses don’t even have 50 employees.

But where Reid and others really miss the mark, however, is in assuming that job losses are the problem, rather than a lack of job creation. As argued by my colleague James Sherk, layoffs spiked early in the recession but then they fell sharply. Since late 2009, gross job losses in the economy have actually been below their pre-recession levels. In fact, in 2010 there were fewer gross job losses than any time since the government began tracking these figures in 1992. Unemployment remains high because the economy has not been creating jobs. Last September, for instance, employers hired only 4.2 million new workers—a million fewer monthly new hires than before the recession.

Let’s lay aside the fact that it is job creation that’s most of our problem and that all the layoffs we’ve been hearing about lately seem to be Obamacare regulation-related.

Sen. Harry Reid, meet the people you think don’t exist. A boutique, local, organic, artisan maker of cured meats is closing in Denver thanks to a USDA regulation that would require him to taint his all-natural, Old World methods for making his product in order to comply:

“In August, the USDA imposed additional requirements on Il Mondo Vecchio’s production methods. After two months of sharing information and collaboration back and forth between Il Mondo Vecchio and the USDA as well as various attempts to modify the production methods,” the owners announced, “Il Mondo Vecchio has determined that the impact of the regulatory requirements on dry cured sausage products was detrimental to the quality of the product and therefore, Mark and Gennaro are forced to close the[ir] doors.”

This conflict between modern regulations and traditional methods is something DeNittis thought for a time he could navigate.

“We adhere to Old World techniques of natural process while following New World regulations,” Il Mondo Vecchio’s website states.

When it comes to Old World methods, I think it would be hard to find a better example of a traditional, conscientious, sustainable, and local producer than Il Mondo Vecchio.

The product has, of course, never sickened anyone or faced any complaint, and Denver foodies will count it a loss to their community. This is, literally, the war on bacon.

And, one man’s dream, his livelihood, his community, and his employees are poorer for it. But by all means, keep piling them on, Harry.

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