But recently, more in Washington are making another case. They argue that getting rid of regulations will directly create jobs.
President Obama has heard versions of this argument from powerful business lobbying groups, individual chief executives — including members of his own jobs council — and his rivals on the campaign trial.
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Economists who have studied the matter say that there is little evidence that regulations cause massive job loss in the economy, and that rolling them back would not lead to a boom in job creation.
Firms sometimes hire workers to help them comply with new rules. In some cases, more heavily regulated businesses such as coal shrink, giving an opportunity for cleaner industries such as natural gas to grow.
“Based on the available literature, there’s not much evidence that EPA regulations are causing major job losses or major job gains,” said Richard Morgenstern, a senior fellow at the nonpartisan think tank Resources for the Future who worked at the EPA starting under the Reagan administration and continuing into President Bill Clinton’s first term.
A decade ago, in a landmark study, Morgenstern and others looked at the effect of regulations on four heavily polluting industries — pulp and paper mills, plastic manufacturers, petroleum refiners, and iron and steel mills — between 1979 and 1991.
The researchers concluded that higher spending to comply with environment rules does not cause “a significant change” in industry employment. When jobs were lost, they were often made up elsewhere in the same industry. For every $1 million companies spent, as many as 11 / 2 net jobs were added to the economy.
The White House has tried to be particularly sensitive about the burden on businesses when rules are added. This year, Obama issued an executive order that agencies pay close attention to how rules might affect employment.
“This kind of sustained attention to jobs impact is new,” said Cass Sunstein, the White House’s regulatory chief. “I think it is very important to make sure regulations are compatible with our economic goals. But the idea of brandishing ‘job-killing regulations’ as a near-epithet is probably less nuanced than is ideal.”
Sunstein said he is sensitive to the possibility that when there is higher unemployment, there could be a higher risk that people working in regulated industries may have to wait longer to find new jobs.
Regardless, regulatory experts say that viewing a rule solely through the lens of whether it will cost jobs misses the point.
Noll, the Stanford professor, said the government could outlaw tractors to create $5-a-day jobs for people working in the fields, but “that would not be a legitimate social goal.”
“The notion that we should deregulate everything because we have a recession is completely wrongheaded,” he said. “Whether a regulation is a good or bad idea is not a function of employment in the industry being regulated.
“The right question is: On balance, does our society benefit?”
Staff writer Steven Mufson in Washington contributed to this report.
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