By deciding this week to let the plant closing notification bill become law, President Reagan reluctantly bowed to the inevitable.

But the measure is still harmful despite the veto-proof margins by which it passed the House and Senate and despite polls showing it is favored by 80 percent of the public.By requiring 60 days' notice of plant closings or massive layoffs, the measure will make it more difficult for firms to adjust to change and competition. The upshot is bound to cost jobs instead of protecting them.

Moreover, the bill's various exemptions invite firms to stretch the truth and go through a variety of contortions.

Already, some firms are talking about distributing "perpetual notices" of shutdowns or major layoffs along with paychecks. If they received regular notices, workers would have more difficulty claiming later they had not been properly warned. At the same time, such notices would be less alarming to creditors of troubled firms since periodic notices would lose their impact.

Those who favor plant closing laws owe it to themselves to take a close look at an industry that has long had elaborate, federally-imposed requirements on advance notification - the railroads.

Under the Interstate Commerce Act, a railroad has to inform union officials months before it closes a line, get their consent to an "implementing agreement," and guarantee generous severance for any employees laid off. But from 1947 to the present, railroad employment has dropped from 1.3 million to 230,000. During the same period, total U.S. employment has soared.

The lesson should be clear: It's vigorous competition, not federal regulation, that keeps workers on the job.