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The Regulatory Industry Is Growing Faster than the Real Economy

Want to work in a field that has more than quadrupled in size since 1960? Consider being a regulator for the federal government. Even during the last recession, the regulatory agencies were hiring.

In 2015, the U.S. government employed more than 277,000 regulators. To put that number in perspective, it’s 50,000 more workers than General Motors Co. employs throughout the entire world.

It has cost our economy over $100 billion during the Obama administration.

The Fourth Branch of Government

We’ve all heard of the regulatory agencies that constitute the “fourth branch” of government. It has cost our economy over $100 billion during the Obama administration.

But it wasn’t always like this. We haven’t always lived in a world where unelected bureaucrats could fine a man $55,000 for taking photos of his friend’s art project.

Thankfully, Susan Dudley from George Washington University in Washington, D.C., and Melinda Warren from Washington University in St. Louis, Missouri, have tracked the growth of federal regulatory agencies, allowing us to see how we got into the predicament we’re in now.

Using data from the annual federal budget, Dudley and Warren have recorded the number of federal regulators and the amount of taxpayer money given to them for each year since 1960. All monetary figures that they report are in inflation-adjusted 2009 dollars.

Tip of the Iceberg

While their data show federal regulation has exploded since 1960, it’s important to realize that they included only regulatory agencies that explicitly restrict business transactions in the private sector.

That means the 277,000 regulators they recorded in 2015 didn’t include anyone from the Internal Revenue Service, Social Security Administration, Defense Department, or the Centers for Medicare and Medicaid Services—even though these agencies account for roughly one-third of all final rulemaking actions in a typical year.

From 2014 to 2015, the economy grew by only 2.6 percent, while the regulatory business grew by 4.3 percent.

However, even without these agencies, it’s apparent that the size of federal regulation is massive compared to what it once was. From 1960 to 2015, the amount of taxpayer money allocated to federal regulators increased by more than 1,800 percent, from $3.06 billion to $57.05 billion.

The growth of federal regulatory agencies has not been limited to any particular field or industry.

From 1960 to 2015, the budget of the Federal Aviation Administration increased from $241 million to $1.36 billion, the budget of the Comptroller of the Currency increased from $63 million to $1.13 billion, and the budget of the Federal Energy Regulatory Commission increased from $40 million to $286 million. Since its beginning in 1970, the Environmental Protection Agency added over 10,000 employees to its payroll.

Even when the rest of the country is doing poorly, the regulators do well.

From 2014 to 2015, the economy grew by only 2.6 percent, while the regulatory business grew by 4.3 percent. So if you’re looking for work and the private sector isn’t hiring, you can always try finding work as a bureaucrat in the industry that never shrinks.

A version of this article was published by The Daily Signal.

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