The cost of regulation is often cited as one of the structural costs that affect U.S. competitiveness. A unit of the Virginia General Assembly recently surveyed manufacturers in that state and has issued a report on the Impact of Manufacturing Regulations.
The General Assembly’s report concludes that the cost for environmental, economic, workforce and tax compliance costs were $3.49 billion in 2005 alone in Virginia. Brett Vassey, President and CEO of the Virginia Manufacturers Association commended his legislators as perhaps being the first state legislature to develop an accurate picture of the true costs of regulation.
Regulatory costs are no stranger to manufacturers anywhere. NAM and The Manufacturing Institute have shown in recent studies how structural costs are rising faster here than in some of our major trading competitors. The Escalating Cost Crisis that we issued last year shows how U.S. manufacturing is saddled with 31.7 percent higher structural costs than nine major trade competitors like Canada, Germany, France, Japan and China.
Congratulations to VMA and the Virginia legislature for being cognizant of how these costs can affect manufacturing. Imagine if the US Congress would issue such a report on the regulatory impact on manufacturing?! Would that day ever dawn?
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