The National Association of Manufacturers (NAM) has issued a new report that shows the macroeconomic impact of federal regulations. The study also reveals the extent to which manufacturers bear a disproportionate share of the regulatory burden, and that burden is heaviest on small manufacturers
because their compliance costs are often not affected by economies of scale. The analysis finds that the average U.S. company pays $9,991 per employee per year to comply with federal regulations. The average manufacturer in the United States pays nearly double that amount—$19,564 per employee per year. Small manufacturers, or those with fewer than 50 employees, incur regulatory costs of $34,671 per employee per year. This is more than three times the cost borne by the average U.S. company.
NAM commissioned this analysis by economists Nicole V. Crain and W. Mark Crain, who estimated total federal regulatory costs reaching $2.028 trillion in 2012 (in 2014 dollars). The conclusions identify significant burdens for manufacturers in the United States, particularly small manufacturers with fewer
than 50 employees, who pay an estimated $34,671 per employee per year to comply with federal regulations. The NAM study builds on previous analyses conducted by the authors for the U.S. Small Business Administration’s Office of Advocacy. This study updates previous estimates of the cost of federal regulation using new and updated data and incorporates the findings of an extensive survey of NAM members that validate conclusions reached in the economic analysis.
Jay Timmons, NAM President and CEO, says, if we are to succeed in creating a more competitive economy, we must reform our regulatory system so that manufacturers can innovate and make better products instead of spending hours and resources complying with inefficient, duplicative and unnecessarily burdensome regulations. Manufacturers are committed to commonsense regulatory reforms that protect the environment and ensure public health and safety, while also promoting economic growth and job creation. The time is now for members of both parties to work together to reform our regulatory
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