State labor and employment laws are costing the U.S. more than 700,000 jobs, thwarting development of new businesses and undercutting the economic recovery, the U.S. Chamber of Commerce said.
Paring back regulations that exceed federal standards would help spur 50,000 new businesses each year, according to a report released today by the Chamber, the nation’s biggest business group.
The Washington-based Chamber has protested an “explosion” of federal rules in the past few years that the group said cost the economy $1.7 trillion a year. Chamber President Thomas Donohue urged officials on Jan. 11 to “rein in excessive regulation,” and a week later President Barack Obama ordered elimination of rules that hamper economic growth.
“The purpose of the study we put out to do is to show the great variation that exists among the states and to demonstrate the job growth and business development that would result from reforms,” said Glenn Spencer, executive director of the Workforce Freedom Initiative at the Chamber, said today at a news conference in Washington.
The study commissioned by the Chamber reviewed state laws including minimum wages that exceed federal requirements, as well as rules on hours and working conditions, discrimination, family and medical leave and collective bargaining.
States should revamp those employment laws to promote jobs, according to the report by Seyfarth Shaw LLP, a law firm with 10 offices in the U.S., and Navigant Consulting Inc., which offers management services and helps resolve commercial disputes. Changes may lead to seven months of job creation, based on the current pace, according to the report.
Mississippi Governor Haley Barbour said his state sought tort reform and invested in job training rather than passing new regulations exceeding federal requirements.
“We as a country have got to return to where our national policies’ first priority is economic growth and job creation,” Barbour said at the news conference. “Bigger government means a smaller economy.”
The study focused on labor and employment practices that existed in states in 2009, assessing the effect on unemployment rates and the creation of new businesses based on 34 characteristics.
U.S. unemployment fell to 9 percent in January, from 9.4 percent in December, and has exceeded 9 percent since May 2009, according to the Bureau of Labor Statistics.
Nevada has the highest rate, at 14.5 percent in December, followed by California at 12.5 percent. The U.S. West had the highest rate in December at 10.9 percent.
--Editors: Larry Liebert, Andrea Snyder
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