Manufacturers in Washington, D.C. are grappling with a substantial financial burden due to government red tape, costing them nearly $30,000 per employee in 2022, according to a new study released by the National Association of Manufacturers (NAM). The report highlights the detrimental impact of regulations on the manufacturing industry, revealing that small manufacturers bear an even higher cost of $50,000 per employee.

The NAM study, released on Wednesday, estimates that the total annual cost of red tape exceeds $3 trillion, with the manufacturing industry alone shouldering approximately $350 billion of this burden. These figures represent a significant increase from a decade earlier when manufacturers faced costs of $277 billion.

In response to the findings, NAM President and CEO Jay Timmons emphasized the challenges posed by imbalanced federal regulations, stating, "The unbalanced federal regulations make it challenging to grow manufacturing in America by siphoning resources away from job creation and our communities." Timmons called on the Biden administration to take prompt action to reverse the current regulatory trajectory, underscoring how these regulations undermine recent wins for the manufacturing sector, such as those achieved through the Bipartisan Infrastructure Law and the CHIPS and Science Act.

The NAM report reveals that manufacturing companies endure the highest costs from regulations, with the average U.S. company paying around $13,000 per employee annually – less than half the burden faced by manufacturers. These costs generate a significant strain on manufacturers' resources, diverting valuable funds away from job creation and community development.

Washington's regulatory environment has proven to be persistent, regardless of the presidential administration. Contrary to expectations, the cost of regulations increased during three out of the four years of Donald Trump's presidency, according to recent studies. Data from the American Action Forum paints a revealing picture, showcasing an upward trend in net costs of regulations from 2005 to 2023, spanning the administrations of Presidents Bush, Obama, Trump, and Biden.

The American Action Forum's analysis further highlights that Washington has imposed $1.5 trillion in new regulations since 2005, or the equivalent of 1.3 billion additional "paperwork hours" for businesses. Such excessive regulatory demands place a significant burden on manufacturers and impede their ability to thrive in a competitive global market.

The NAM's Manufacturers' Outlook Survey shed further light on the ordeal faced by manufacturers, with over 63% of companies reporting spending at least 2,000 hours annually on regulatory compliance. The survey, compiled by economists Nicole V. Crain and W. Mark Crain, combines feedback from NAM members with estimates of total regulation costs made by federal agencies.

The findings of the NAM study serve as a clarion call for policymakers to address the adverse impact of regulatory burden on manufacturers. As the backbone of the American economy, manufacturers require a favorable operating environment that fosters growth, innovation, and job creation. Failure to address the imbalances in regulations risks stifling the manufacturing industry's potential, hindering economic progress and hampering the Biden administration's goals for the sector.

Manufacturers across Washington eagerly await tangible actions from the Biden administration to alleviate the regulatory burden, restore balance, and pave the way for a robust and prosperous future.