On Wednesday, the House Committee on Education and the Workforce held a hearing to discuss the state of the American workforce. Panelists pointed to a number of factors that they believe hinder job creation and economic growth, and made suggestions to jump-start the economy.
Robert McDonnell, Governor of Virginia, claimed that “excessive federal regulations” and the new health care requirements were imposing significant burdens on small businesses. Specifically, McDonnell criticized the National Labor Relations Board’s proposed rule that would require almost all private sector employers to post in the workplace a notice to employees outlining their rights under the National Labor Relations Act. McDonnell explained that this proposed notice “lists seven bullet points that state employees have the right to organize, form or join a labor union and repetitively state they have the right to negotiate their wages, benefits and working conditions with their employer. This is counterproductive and detrimental to the message we are trying to send in Virginia.”
Douglas Holtz-Eakin, president of the policy think-tank American Action Forum, discussed several issues that he claimed have negatively impacted the economy. For example, he said that certain provisions of the Affordable Care Act “are inconsistent with strong, pro-growth policies.” Earlier in the day, Holtz-Eakin appeared before the House Committee on Ways and Means to testify about the health care law’s impact on employment and the economy. Specifically, he testified about the ways in which he believes the costs of the employer mandate, administrative burdens, and tax increases impede economic growth and job creation.
Like McDonnell, Holtz-Eakin also found fault with the up-tick in regulatory activity. According to his testimony, the Federal Register published 82,590 pages in 2010, an 18.5 percent increase from 2009. These pages contained 2,401 proposed and 3,562 final rules, of which 673 were considered significant. Moreover, he cites information from the Office of Information and Regulatory Affairs (OIRA) stating that are 136 major rulemakings (averaging at least $100 million) currently under review.
Testifying on behalf of the National Association of Manufacturers (NAM), Dyke Messinger, president of Power Curbers, Inc., similarly criticized the increase in regulatory activity in addition to increased taxes which, he claims, puts U.S. manufacturers at a competitive disadvantage. He advocates a tax system that “promote[s] fair rules for taxing active foreign income of U.S. based businesses. Congress must reduce the corporate tax rate to 25 percent or lower without imposing offsetting tax increases.” In addition, Messinger argued that the “continuing expansion of federal mandates and labor regulations undermines employer flexibility.”
Specifically, Messinger testified that “[t]o encourage competitiveness, the United States should reject new federal regulations that dictate rigid work rules, wages and benefits and that introduce conflict into employer-employee relations.”
Messinger also expressed concern that the Occupational Safety and Health Administration is veering away from its cooperative programs with employers that promote voluntary compliance with the agency’s many safety regulations: “Through a series of both proposed regulations and sub-regulatory administrative actions, OSHA is in the process of gutting key components of compliance assistance programs that have been proven to help employers make their workplaces safer while allowing the agency to focus its resources more effectively.” Instead, Messigner advocates greater support for initiatives at OSHA as well as at other agencies that “encourage employers and employees to join in cooperative efforts for safer working environments.” He also promoted employers’ “voluntary efforts to meet the needs of individual employees through flexible work schedules and benefit arrangements need to be recognized and promoted.”
Heather Boushey, Senior Economist with the Center for American Progress, claimed that the sluggish employment recovery is instead due to insufficient aggregate demand in the overall economy. To remedy the situation, she urged policymakers to “continue to ensure that financial markets are focused on making funds available to promote investment in America, not just speculation and dividends for those in the financial services industry.”
A complete list of the panelists and links to their testimony can be found here.