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Feb. 14, 2013

Dire Warnings About New Regulations Don’t Come to Pass

Industry Claims About Lost Jobs and Lower Profits Are Just Fear-Mongering

Washington, D.C. — The results of regulations to protect consumers not only tend to discredit industry’s dire predictions but often show that the safeguards benefit businesses, a Public Citizen report released today shows.

The report, “Regulation Issue: Industry’s Complaints about New Rules,” compares the business lobby’s predictions to the results of five significant regulatory policies. The safeguards ranged from San Francisco’s paid sick leave law to smokefree workplace policies. To say that industry’s warnings look foolish in retrospect is an understatement.

“Business groups always predict that proposed regulations will cause the sky to fall, but they’re never right,” said Adam Crowther, researcher with Public Citizen. “Given industry’s track record as forecasters, policy-makers would be wise to greet their new claims with extreme skepticism.”

The research is particularly timely this week, which marks two years since the passage of the Office of Management and Budget’s deadline to finish its work on a proposed rule to protect workers from deadly exposure to silica. Many suspect industry pressure is to blame.

The cases Public Citizen examined include:

• San Francisco’s paid sick leave policy. Under this ordinance, businesses were required to give sick leave to their employees. The San Francisco Republican Party said the law amounted to “a job-killing attack” on the city’s economic engine. But employment in San Francisco subsequently increased and the number of businesses grew.

• The Family and Medical Leave Act of 1993. This law gave workers the right to take unpaid leave to recover from an illness, or care for a sick or newborn child. U.S. Rep. John Boehner (R-Ohio) predicted that if the measure passed, “the light of freedom will grow dimmer.” In fact, the act had virtually no impact on the vast majority of businesses covered by the bill, government data show.

• Unleaded gasoline. Leaded gasoline once was a serious public health menace. The U.S. Environmental Protection Agency in 1973 issued rules reducing the amount of lead in gasoline, then banned it entirely in 1986. Industry groups said this move would jeopardize 43 million jobs in the petrochemical industry. In reality, the industry has flourished for decades, and reduction in atmospheric lead has been credited with enormous public health benefits. Further, the reduction of lead in the environment has been linked to improved public health.

• Smokefree workplace laws. Since the early 1990s, jurisdications encompassing more than 200 million people have banned smoking in bars and restaurants. Secondhand smoke has been shown to cause lung cancer and heart disease. The tobacco industry warned that smoking bans would reduce bar and restaurant profits by as much as 30 percent. Instead, profits increased after the laws were enacted. A document unearthed during litigation against the tobacco industry revealed that a Philip Morris executive admitted that “our dire predictions in the past rarely came true.”

• The CARD Act. Passed in 2009, this law protects consumers from unfair credit card company policies by regulating interest rates and fees, and mandating better disclosure. The American Bankers Association predicted that it would hurt consumers and small businesses. But survey data indicates that now even businesses praise the legislation.

Read the report here.

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