National Association of Manufacturers launches Manufacturers for Sensible Regulations

The National Association of Manufacturers (NAM) has launched Manufacturers for Sensible Regulations, a new coalition aimed at reducing the regulatory burdens faced by manufacturers. 

“According to the NAM’s latest Outlook Survey, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations,” the organization said in a tweet launching the initiative. 

NAM says the purpose of Manufacturers for Sensible Regulations is to encourage policymakers to unleash the power of American manufacturing by freeing job creators of overburdensome regulations.

NAM President and CEO Jay Timmons says the effort can and should be a bipartisan one. 

“President Biden and Congress have prioritized strengthening the manufacturing sector in America through historic legislation like the Bipartisan Infrastructure Law, the CHIPS and Science Act, initial permitting reform actions in the Fiscal Responsibility Act and even some energy provisions in the Inflation Reduction Act,” he said. 

Now, NAM argues, Biden has the opportunity to work across the aisle to further support domestic manufacturing. The support lent to manufacturers through such legislation cannot be fully realized if it is not accompanied by regulatory reform, NAM says.

“We want President Biden’s manufacturing agenda to succeed,” American Cleaning Institute President and CEO Melissa Hockstad said. “Unfortunately, we are seeing the signs that the regulatory agenda is jeopardizing the investments enacted over the past 18 months.”

Business leaders say the construction of TSMC’s $40 billion north Phoenix factory is an example of  the negative effects of overregulation. 

Facing questions on the costs of construction during a shareholders’ meeting last January, TSMC’s CEO said that “The high cost of construction includes labor cost, cost of permits, cost of occupational safety and health regulations, inflationary costs in recent years and people and learning curve costs. Therefore, the initial costs of overseas fabs are higher than our fabs in Taiwan.”

Many manufacturers polled by NAM say that if their regulatory burden were lighter, they would not only be able to produce their goods more efficiently, but also increase pay for workers and purchase more capital. 

NAM members said that if the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.

In a letter to White House Chief of Staff Jeff Zients, the coalition wrote, “The cost of complying with regulations can be enormous, particularly when it comes to regulations that impact hiring and retention. The most current data on the cost of regulations shows that the average U.S. company paid $9,991 per employee per year to comply with federal regulations, but the average manufacturer in the United States pays nearly double that amount: $19,564 per employee per year.” 

The Arizona Manufacturers Council was among the groups to sign the letter.

“The AMC believes that overly burdensome regulations drive up costs and depress job creation,” AMC Executive Director Grace Appelbe said. “We’ve joined Manufacturers for Sensible Regulations to speak with one voice to the administration and to Capitol Hill that our manufacturing sector won’t achieve its full potential if it’s tied up in red tape.”

Manufacturers for Sensible Regulations is made up of hundreds of trade groups alongside national and state partners. You can learn more about the coalition here.