Regulations Costing Manufacturers $28 Billion, Study Says

Compiled by Tonya Vinas Businesses frequently complain about the high cost of complying with government regulations, and a recent study is likely to be cited in those complaints. The study, conducted by the Mercatus Center at George Mason University, Arlington, Va., found that U.S. manufacturers paid $28 billion in 2000 to comply with federal workplace regulations. The costs average $2.2 million per company, or about $1,700 per employee. "What our study found was that the cost for manufacturers to comply with workplace regulations exceeds by at least 75% the cost estimate in previous academic and government studies," says Mark Crain, the study's co-author and an economics professor at George Mason. The cost is ultimately "borne by consumers in the form of price increases, restricted product choices, wage reductions or diminished asset values," Crain says. The study results are based on surveys with 100 members of the National Association of Manufacturers, Washington, D.C. Smaller manufacturers with fewer than 100 workers reported higher costs than their larger counterparts. Compliance costs were about $2,500 per employee at the smaller firms. Respondent firms ranged in size from seven employees to 65,400. Worker health and safety regulations cost manufacturers the most, accounting for about one-third of total compliance costs, the study concluded.

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