Free Markets, Free People

Regulation tends to cost lower income people more

I know that’ll come as an absolute stunner, huh? Not really. Regulation costs money. It costs money for compliance enforcement, which comes from taxes, and it costs companies money for compliance in the form of higher costs – costs that are passed on to consumers.

So? So – from the Mercatus Center at George Mason University, find out:

Low-income households benefit the most when they act to reduce their exposure to the greatest risks they face, such as relatively common events and activities that cause illness, injury, and death, many of which can be traced to living in unsafe neighborhoods. In contrast, high-income households generally focus more on small risks—for example, tiny environmental risks that are far less likely to occur and generally affect fewer people at the expo- sure levels regulations address.


Regulation focused on small risks delivers benefits to a limited group but spreads the costs across everyone. As a result, regulation effectively transfers money from low income households, who need to prevent larger risks, to high income households, who are concerned about small risks. Low income households are, in a sense, paying for the lifestyle preferences of the wealthy.

Such regulation increases consumer prices and lowers worker wages.

• Regulations act like a regressive sales tax, with middle and lower income households bearing much of the cost of rules that focus on the risk preferences of wealthier households, since they all pay the same, higher prices.

• Cost of regulation as a share of income is estimated to be as much as six to eight times higher for low-income households than for high-income households.

• [Diana] Thomas estimates that households can mitigate the same level of mortality risks privately for about one fifth of the cost of public risk-reduction strategies.

Well, imagine that, the laws of economics at work in a very predictable way.  And, of course, completely opposite of the professed claim of the left to be on the side of the poor. Because it is that very group that continually push more and more regulation because, one assumes, they believe if some regulation is good, more has to be better. But, as a group, being mostly economically illiterate combined with unaccountable faith in government power, they end up with these sorts of ‘unintended consequences’ all of the time.


13 Responses to Regulation tends to cost lower income people more

  • ANOTHER way the poor are hurt by regulation is via the damping of innovation.
    This is very hard to estimate in terms of cost, nor is cost accurately limited to mere dollars and cents.  The FDA has consigned millions of people to death, unnecessary pain and suffering, and a generally lowered quality of life.

    • The FDA doctor that personally caused highway jams in DC because he refused to drive above the speed limit in the left hand lane also did not approved ANY drugs in his decade long career there.

  • Regulations on the way animal shelters dispose of euthanized animals deprive the poor from a valuable protein source!

  • Here in San Deigo county we had a situation where lawyers and a handicapped man sent some people forth to locate rural stores and diners, with the purpose of looting them in the name of handicapped access laws. Of course, those were all mom and pop stores, the type the left likes so much when they face a large buisness like Walmart, but their regulations bear hard on such buisnesses.

  • WIthout poverty and racial stife, the Left would be without a job. Therefore they stir up as much of both as possible.

    • We all know that SSM and dismembering the 2nd amendment are going to create more jobs.
      It’s all a big diversion from the fact that Obama is a failure at governing.

  • Low income households are, in a sense, paying for the lifestyle preferences of the wealthy.

    Yeah, well, they asked for it. And given the “poor” pay ZERO income tax and little other taxes, relatively speaking, contrasted with what the “rich” (i.e.; “Jews” in HitlerSpeak) just who is supporting whose lifestyles?