OPINION: Regulation Impedes Black Progress, But The White House Can Help

Derrick Hollie | Contributor

Excessive regulation stifles economic growth. To make matters worse, certain regulations can have a disproportionately negative impact on black Americans.

A U.S. Chamber of Commerce study estimates that federal regulations cost the U.S. economy more than $1.9 trillion in lost productivity and added expenses. It also estimates regulatory costs are 20 percent greater for firms with 50 or fewer employers — the same type of business most commonly owned by black entrepreneurs.

For black Americans in general, regulations can have a similarly negative — and disproportionate — impact. They can harm job opportunities. They can drive up consumers prices. They can sometimes even prevent lifesaving products from coming to market.

To its credit, the Trump administration is hard at work deregulating as well as adhering an executive order requiring agencies to eliminate two regulations for every one they add. But the president should consider another executive order suggested by a black policy organization meant to lessen or completely eliminate negative impacts of new regulations on minority populations.

Recognizing that systemic racial discrimination is gone, the Project 21 black leadership network is focused on eliminating non-racial barriers to black prosperity. Regulatory burden is one such barrier. Their “Blueprint for a Better Deal for Black America” provides 57 recommendations for eliminating conditions blocking access to opportunity and causing unfair levels of poverty, crime and other social ills in the black community.

Easing the disproportionate strain of regulation is a key recommendation in Project 21’s Blueprint. It’s something President Trump can do with the stroke of a pen.

An executive order requiring federal agencies to conduct a “minority impact assessment” on all future federal regulation would be a major step toward increasing economic opportunity for black Americans.

After all, the government requires environmental impact statements to estimate the effects of projects like roads and buildings on nature. Shouldn’t the government act similarly when it comes to how regulations impact the population?

A minority impact assessment would create a list of all the positive and negative impacts a proposed regulation would have on factors including employment, wages, consumer prices and homeownership. This regulatory impact would then be analyzed for its effect on minorities in contrast to the general population.

Through this assessment, agencies can then identify any negative aspects of proposed regulations in advance, find alternatives with lesser harm to minority communities or at least provide a clear notice that the government’s regulatory desire outweighs minority groups’ best interests.

Consider what’s already happening. The proposed Atlantic Coast Pipeline for natural gas, which proponents say would save consumers in Virginia and North Carolina – states with disproportionately high black populations – over $377 million in electrical costs and create jobs, is under assault from activists who used federal regulations on water, public land use and migratory birds to try to stop its construction. In Buckingham County, a poor Virginia county whose population is over 34 percent black, there’s a battle over a pipeline compressor station that would create jobs and possibly around a million in tax revenue.

A minority impact assessment would deter the Environmental Protection Agency from imposing regulations that discourage businesses from setting up shop in or near minority neighborhoods. While the EPA has been an obvious offender, the regulatory threat to black well-being is widespread. The Food and Drug Administration puts overreaching rules on smokeless nicotine products when blacks are more likely to die from smoking-related diseases and want to quit more than smokers of other races. Fuel efficiency mandates from the EPA and Department of Transportation force poor blacks into smaller, more expensive and less safe cars. The Department of Labor enforces Davis-Bacon Act regulations – Jim Crow era laws still on the books – that require union-friendly “prevailing wages” for federal contracting that hurts the competitiveness of small, black-owned businesses.

To have been able to nip these regulatory problems in the bud would have been a great help to black advancement. They prove a need to be more circumspect.

An executive order requiring future minority impact assessments on regulation will serve as a speed-bump to prevent bureaucrats from rushing into rulemaking that hurts opportunity for those who sincerely want a fair shot at moving up the socio-economic ladder.

Derrick Hollie is president of Reaching America and a member of the nonprofit Project 21‘s black leadership network.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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