Rhode Island is in desperate need of leadership that will step up and take the Progressive agenda head-on. For too long, the far-left has schemed to take the people of Rhode Island backwards. They want to move us further away from the pro-family and pro-business reforms our state desperately needs.
On Tuesday, you and I have a chance to make a big difference! I am personally encouraging you to vote… to exercise your precious right and to vote for candidates who support a pro-growth, pro-business, and pro-taxpayer agenda!
By way of touching base on an issue that has been the subject of debate (with help from the RI Center for Freedom & Prosperity), here is news out of Missouri proving that state governments can make rational decisions:
Relenting in the face of legal arguments by The Rutherford Institute and others that burdensome overregulation violates a person’s right to due process, the State of Missouri has repealed a senseless occupational licensing law that required individuals to secure a costly license in order to braid hair. In asking that the occupational licensing law be struck down, Rutherford Institute attorneys filed an amicus brief with the U.S. Supreme Court in Niang v. Tomblinson, arguing that licensing restrictions that require a government license in order to perform work-related tasks that pose no health or safety risks such as braiding hair deprive citizens of their constitutional right to earn a living at their chosen vocation. As a result of Missouri’s repeal of the law, the U.S. Supreme Court declared the case moot and ordered that the lawsuit challenging the law be dismissed.
Unfortunately for the issue (but fortunately, I guess, for representative democracy), the court’s action will require sanity to spread across the country from state to state. Would it be too much to hope that Rhode Island could be its next victim?
I’ll provide more depth with my usual employment post and Jobs & Opportunity Index (JOI) write-up after all the data becomes available tomorrow, but at first glance, it looks like the national recovery might be stalling out in Rhode Island:
The number of employed RI residents was 539,800, an increase of 200 from the August figure of 539,600. …
The RI labor force totaled 561,900 in September 2018, down 300 from August 2018 but up 6,000 from September 2017 (555,900).
… In September, the number of Rhode Island-based jobs was unchanged from the August revised employment level of 502,100. Overall, Rhode Island’s job count is up 7,000 from September 2017.
Keep in mind that these numbers are all seasonally adjusted, so one can’t cite the end of our summer season as the reason that RI-based jobs have stagnated, employment growth has slowed, and the trend of fewer people looking for work has resumed. If this is a slowdown, then maybe Rhode Island is a leading indicator for the rest of the country, or maybe our approach to policy has become so different from that of the federal government and other states that the Ocean State is now unable to capitalize on economic growth, period.
Tangential to this topic, I’ve seen murmurs here and there blaming the Republican tax cuts for current deficit problems at the national level. Yeah, well, I kind of wonder about that:
The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That’s up $14 billion from fiscal 2017, and an all-time high. And that’s despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump’s tax reform plan. …
Other major sources of revenue climbed as well, as the overall economy revived. FICA tax collections rose by more than 3%. Excise taxes jumped 13%.
The only category that was down? Corporate income taxes, which dropped by 31%.
Overall, federal revenues came in slightly higher in FY 2018 — up 0.5%.
Spending, on the other hand, was $127 billion higher in fiscal 2018. As a result, deficits for 2018 climbed $113 billion.
The U.S. economy sits atop of the World Economic Forum’s annual global competitiveness survey for the first time since the 2007-2009 financial crisis, benefiting from a new ranking methodology this year, the Swiss body said on Tuesday.
We are the economy — you and me. Our activity is the economy. The progressive approach to economic development that Rhode Island pursues is to control what we do in a way that powerful people believe is best, which includes taxing us so the government can redistribute the wealth. Stop doing that, and our economy will soar; government revenue should be secondary.
Rhode Island does need an economy that capitalizes on cross-pollinated innovation, but that means getting government and faith in central planning out of the way.
Apparently, Brown University has at least one student, Austin Rose, who is skeptical of occupational licensing:
As dubious as the costs of freedom are, the costs of licensing are pretty staggering. Licensing of barbers reduces the probability of a black individual working as a barber by 17.3 percent, according to a study published by the Mercatus Center at George Mason University. Every 100 hours of training required adds $2.15 to the price of beauty salon visits. Licensing, by making it more difficult for job-seekers to enter new lines of business and employment, harms social mobility. And, as an Obama White House report notes, low-income entrepreneurship activity takes a hit as well.
Of course, our institutions of higher education layer on much more economic miseducation than one op-ed can correct.
Linda Langlois expresses a relatively minor and easily overcome problem that she’s experiencing courtesy of the state’s regulatory regime:
Every few years, I go online to Readers.com to order my reading glasses. For several years now, I have needed the 4.00 strength and have received my eyeglasses within a few days. So imagine my shock when my online order this week elicited this pop-up: We’re sorry, but Rhode Island restricts the sale of the following: Reading glasses with powers over +3.25.I have emailed the governor’s office but have had no reply. I searched online for Rhode Island restrictions, statutes, laws, etc., to find
Wondering what changed, I contacted Reading.com, and the company’s spokesperson directed me to the relevant statute, which forbids the sale of corrective eyeglasses or lenses “unless a licensed optometrist, physician, or optician under the laws of this state is in charge and in personal attendance at the booth, counter, or place where those articles are sold.” The exception is for “simple reading magnifying glasses,” defined as those with “over plus 3.25 diopters or equivalent magnification.” However, this statute is not new, so nothing should have changed for Ms. Langlois’s recent order.
I asked Reading.com for further explanation but have received no response. Perhaps the company only recently discovered the statute. One might reasonably wonder whether the new requirement to collect sales taxes from Rhode Island residents made the risk of unlawful sales greater than the cost of adding protections against them.
Whatever the case, this is another of the countless ways Rhode Island’s government makes life more difficult and more expensive for residents and those who want to do business with us — reducing the ability for our own businesses to innovate. It is also a fine example of the frustration that people feel. Think of the process by which this law might be changed. Consumers or out-of-state retailers would have to lobby the General Assembly and overcome the entrenched interest of licensed optometrists, physicians, and opticians. If it became a fight, politicians would have to run on campaigns to change this tiny law and then expend political capital to make it happen.
After a few experiences like this, residents can conclude that the only solution is to leave. We would all benefit, however, from the election of politicians who operate under the general principle that government oughtn’t meddle so much.
Tiverton resident Donna Cook notes that the General Assembly is too willing to impose difficulties on working Rhode Islanders while the Town Council is happy to put taxpayer dollars under its control.
The absurdity of Rhode Island’s computerized car-inspection regime points to the desperate need for us to figure out what boundaries government should be allowed to impose on our behavior.
This thread jumped out at me from a Providence Journal editorial about the disaster-level traffic resulting from ordinary, planned bridge construction on Route 195 West:
Fortunately, Mr. Alviti, though not answerable to the voters, quickly caught wind of the uproar. He announced last week that he, his planners and traffic engineers will go “back to the drawing board” to see if anything can be done. They were working over the weekend on a new plan, looking at opening an additional lane and otherwise increasing capacity for vehicles. …
In the real world, there is no easy way out, of course. As one of the 235 deficient bridges in the state, Washington Bridge does need to be repaired. In the 20 years since its northern span was reconstructed, it has been rotting away, with rusty reinforcement rods sticking out of the concrete on its underside. …
To speed things up, the RIDOT already plans to work around the clock, toiling through the night, which adds to a project’s cost but makes the work go faster.
For some reason, the most important point for us to discuss as a community in response to these government failings never seems to come up. If we were to lighten up on the ridiculous labor rules that make the cost of roadwork so high, project managers would gain all kinds of flexibility. That’s a side effect whenever the price of something goes down.
Drop the cost of construction 25–40% (or more), and the state and municipalities will find it easier to keep roads and bridges well kept so they don’t get to the point of needing major repairs as quickly. Working around the clock or only when traffic is light would more-often be an option. If the cost were lower, we might have the slack in maintenance budgets to (in some instances) build entire alternate routes while the main route is entirely shut down.
When insider deals and corruption eat up budgets to the maximum that people will tolerate for the minimum tolerable output, there is no room for spending on strategies that make Rhode Islanders’ lives better in the midst of construction.
The datapoints that go into the index cover a wide range of issues and are subjective. For example, Rhode Island is number 1 in “marriage freedom,” largely on the strength of its same-sex partnership laws, but some might suggest that the use of government to redefine a cultural institution is hardly a marker of freedom. Some might also note that same-sex marriage accounts for 2% of a state’s overall score while religious freedom accounts for only 0.01%.
On the other end of the spectrum, the only area in which Rhode Island is dead last is asset forfeiture. However, another low rank for the state could arguably be considered its defining problem: labor market freedom. Here, our 49th place ranking results from laws on:
- General right-to-work law
- Short-term disability insurance
- Noncompete agreements permitted
- Minimum wage
- Workers’ compensation funding regulations
- Workers’ compensation coverage regulations
- Employer verification of legal status
- Employee anti-discrimination law
- Paid family leave
The total effect of these policies has been that Rhode Island hasn’t budged from 49th since the first year measured: 2000.
Rhode Island has a great deal going for it, but if people can’t find work here, they won’t live here. The Ocean State is roughly in the middle fifth for fiscal and personal freedom — although dropping from 18th to 27th in fiscal freedom from 2000 to 2016 and from 12th to 31st in personal freedom. If we take Cato’s weightings as our guide, that decline has been making life less free. But those changes pale in comparison to our languishing at the edge of the bottom fifth in regulatory freedom throughout, and that’s an area in which we need great resolve and quick action to improve.
Somehow, the Providence Journal transforms an environment proposal of the Trump administration from a reduction in emissions to a massive increase.
Opening up the ability to become a teacher for hard-to-fill positions might be a good idea, but the underlying problem is a rigid union-contract pay scale that won’t allow pay accurately to reflect jobs.
Here’s something I don’t get: Not that long ago the word went out that retracting net neutrality rules would end the open Internet as we know it, bringing it all the way back to the distant, dark days of January 2015. So one would expect new proposals reportedly leaked from Senate Democrats to rev up the outrage machine again. The plan is extremely broad, but a major plank is requirements for verification of users’ identities (at least for non-hackers), as well as…
Other proposals include more disclosure requirements for online political speech, more spending to counter supposed cybersecurity threats, more funding for the Federal Trade Commission, a requirement that companies’ algorithms can be audited by the feds (and this data shared with universities and others), and a requirement of “interoperability between dominant platforms.”
The paper also suggests making it a rule that tech platforms above a certain size must turn over internal data and processes to “independent public interest researchers” so they can identify potential “public health/addiction effects, anticompetitive behavior, radicalization,” scams, “user propagated misinformation,” and harassment—data that could be used to “inform actions by regulators or Congress.”
Of course, this proposal and net neutrality are only at odds if the people pushing either attempt to use the rhetoric of freedom. If the goal is government control of the Internet, then they’re both perfectly in line, in which case net neutrality supporters were either deceived or have an unjustifiable faith that government overlords will always favor the content they desire.
The characterization is perhaps too tidy, but many policy decisions in Rhode Island can be explained under the premise that politicians are striving to funnel money to labor unions in an effort of mutual assistance. The RI Center for Freedom & Prosperity offers an example in its public comment in support of a proposed Trump administration rule removing the ability of states to send federally backed provider payments to third parties:
It is also morally unjust that federal dollars, earmarked for home care services, could have dues automatically siphoned-off by state government unions from workers’ paychecks, then transferred to the unions, with some of the funds ending-up in the political campaign coffers of SEIU. If the proposed rule is enacted, it would be just and proper that 100% of the allocated federal funding for home care services should first go to the workers; and it would then be up to the unions to collect dues – on their own – from those who freely choose to join.Earlier this summer, after a major push by SEIU and other progressive activists, legislation that had been on the back burner was rammed through Rhode Island’s General Assembly and signed by the Governor. This new law could transfer control of the home care services industry from the private sector to the government and its union allies. This proposed rule, by removing the government as its potential partner, would create less of an incentive for SEIU to attempt to unionize this industry.
At the same time, the burden on state taxpayers would rise, as the government would surely provide frivolous and unnecessary benefits to allow unions to offer a more compelling reason to unionize.
The new law in Rhode Island seeks to lure home care workers, most of whom are now employed under a successfully operating private ‘agency’ system, to register with the government, becoming quasi-public employees, with their names and other personal information then to be turned over to SEIU labor bosses for the purposes of unionization efforts.
Policymakers in Rhode Island strove to make this look like some sort of system innovation to provide better services, but it’s just an opening for labor unions to collect a cut of federal money.
For eight years, progressive-left politicians have told us that the ‘new normal’ for economic growth would be limited to the 2% range. And for years, our Center and other free-market advocates argued that major tax and regulatory reductions would reverse this course and lead to rapid economic growth, meaning more money and prosperity for families. After this week’s 4.1% GDP growth report, there can no longer be any doubt that we were right.
As Democrat Governor Gina Raimondo spins Rhode Island’s economic numbers and the news media touts her “wooing” of blockchain companies, an article from the Newport Daily News a couple of weeks ago hasn’t gotten much attention:
Hodges Badge Co. Inc. has made the “difficult decision” to close its Portsmouth plant this November and consolidate production at its Washington, Missouri, facility, according to a company statement.
“Hodges Badge Company Inc. is a 98-year-old family-owned company and we consider each one of our employees as part of our extended family,” according to the statement attributed to Rick Hodges, the company president and CEO. “We greatly appreciate being part of the Portsmouth community and are truly grateful to all the employees who contributed to our success over the past several decades. This is a necessary and critical economic decision that we do not take lightly, and we will be working with each of our employees to provide compensation packages and on-site outplacement services.”
The facility in Portsmouth opened in 1974 and employs around 92 people. Rhode Island just won’t allow the company to justify keeping those jobs here.
To be sure, that’s not only a tax and regulation issue. For Hodges Badge, energy played a big role, too:
Despite other business reforms aimed at reducing electricity costs, the plant still consumed 451,000 kilowatts of power for all of 2008 at a cost of $91,000, according to a Daily News article in July 2009. That was twice as much as the company paid to power its Missouri plant.
“I live here and I love it here, but how long can you realistically sustain that?” Rick Hodges said at that time.
Imagine how the current political landscape looks from that perspective. The governor is touting more crony wind deals; NIMBYism is hindering an effort to increase power production in the state; and schemes to make energy more expensive through carbon taxing are a regular feature of every legislative session and may explode into law any year.
Rick Hodges was vocally against the toll on the Sakonnet River Bridge, and it can’t have been lost on him that tolls are proliferating in the state and could return at any time. Add in the recent mandatory-sick-leave law and the push for extremely radical “equal pay” legislation. At some point, business owners must tire of always feeling vulnerable. Any given legislative session could be the end of their operations for some money grab or progressive identity politics impulse.
A couple of weeks ago, Governor Gina Raimondo’s Department of Transportation announced the locations of the balance of ten toll gantries and released an Environmental Assessment [PDF] of them. They also announced that hearings to take questions and comments on the E.A. would occur in three locations on July 27 – tonight, as a matter of fact.
Yes, that’s right, RIDOT is holding public hearings on a very significant project on a summer Friday evening. Quite similar in spirit, as a matter of fact, to the scheduling and location of the hearing for the first Environmental Assessment – in that case, two days before Thanksgiving hard by a cow pasture in South County so remote, the cows themselves need GPS to get there.
The latest fight for independent gubernatorial candidate Joe Trillo is against the Town of Narragansett, which has been trying to get him to remove a giant political sign from a family-owned beach-front property that his sister currently occupies. The story has a number of angles that might pull a political theorist in conflicting directions. On one hand, doesn’t a town have a right to set some restrictions on signs in residential zones?
Even if the Trillo property on Ocean Road wasn’t in a “public” zoning district, Manni said, the sign would be too large. In residential districts the maximum size for a yard sign is 6 square feet, he said.
On the other hand, how could a town (or state) possibly have the Constitutional ability to ban specific kinds of speech?
… since political signs are banned anywhere in town until 60 days before voters head to the polls, Trillo would have to wait September before he could advertise for the November general election.
On this count, the law will surely fall the very first time anybody challenges it, and it would be interesting for that anybody to be Joe Trillo. Of course, that doesn’t mean the sign should stay. It’s difficult to have sympathy for the property owners on small-government grounds after reading this:
Trillo acknowledged that the private residential property, occupied by his sister, sits in a zoning district designed for public land that does not allow the use of any private signs. But he says the town should be working with him to remedy the situation, a result of his family decades ago having sold the state the beachfront land.
Without digging into the details, one can infer that the Trillos availed themselves of one of those schemes that allows a property owner to sell property (or development rights) to the government while maintaining ownership of the structure, or some similar arrangement, thus getting out from under taxes and, in some circumstances, blocking others from developing land that might otherwise be sold in subdivisions.
So, yeah, when you manipulate the law to get special treatment for your property, demanding to be able to use that property for your own political advertising takes a bit of chutzpa.
Rhode Island’s commercial real estate market has stopped being a tenant’s market, which provides a lesson in the problem with our economic development strategy.
A number of policy questions come into play with GoLocalProv’s coverage of a labor union’s picketing a project receiving Commerce RI tax credits.
As a result of the investigation on 4/24/18 it has been substantiated that JS Interior Construction has misclassified 27 employees as independent contractors and has failed to pay wages to the employees in violation of R.I. General Law 28-14-19. Misclassification of Employees — (a) The misclassification of a worker whether performing work as a natural person, business, corporation or entity of any kind, as an independent contractor when the worker should be considered and paid as an employee shall be considered a violation of this chapter.
If I’m interpreting the story correctly, a builder hired workers as subcontractors in order to avoid burdensome laws that prevent workers from agreeing to work for less than an arbitrary level set by government. Labor unions push for these laws in order to make their competition less competitive, and politicians agree to these laws in order to secure financial and boots-on-the-ground support from labor unions.
The first issue is that the state government shouldn’t be subsidizing private-sector projects in the state because bureaucrats have judged them worthy. The second issue is that the state government shouldn’t be restricting the rights of Rhode Islanders to agree to pay rates agreeable to both parties, especially as a systemic subsidy to private labor unions.
But the eye catcher of this issue is the labor union picketing a project ultimately (I’d suggest) because a non-union shop got the job. What would you think of a company that sent its employees to picket another business that was out-competing it — or, more accurately, to picket a client because he or she chose a different contractor?
That’s obviously offensive, but labor unions fit the progressive narrative and (more importantly) the progressive money-flow scheme, so it’s not only tolerated, but lauded.
Paul Edward Parker’s Providence Journal article profiling businesses that are and aren’t concerned or confused about Rhode Island’s recently passed law to force employers to provide paid time off for employees implies the reason the legislation was a product of hubris:
“I can’t even imagine how that would work out, being a seasonal business,” Bitto said in a telephone interview last week. At Evelyn’s, the season runs from mid-April to Oct. 1. …
With the Evelyn’s season running about 170 days, any employees who work the whole season will be able to use their accrued sick time during the last two or three weeks of their employment. …
“Honestly, I have no focus on it at all,” she said. “I’m just busy running the business, worrying about my freezer breaking down.”
Dan Dwight, president and chief executive of the Pawtucket-based Cooley Group, which makes fabric and polymer roof membranes, isn’t sweating the new law. His company, which has about 130 employees in Rhode Island, already provides paid sick days.
For the most part, employers who can offer this benefit already do, and those that don’t have a good reason and (given market pressures) have probably accounted for the omission somewhere else in their compensation packages or business practices. That could mean higher pay, to attract employees willing to forgo paid time off, or a work environment that is attractive for some intangible reason or hiring people who might not otherwise be able to find work (like young adults looking for seasonal jobs).
Forcing this regulation on every business reduces employees’ negotiation leverage, makes it more difficult for new businesses to get going and to expand, and gives some businesses an advantage over others simply because of their size or because the nature of their work better lends itself to this particular benefit. In the long run, the result won’t be that every Rhode Island employee has paid time off so much as that those whose potential employers who can’t offer it simply won’t exist.
One last minute bill in the Rhode Island General Assembly, H8324, may or may not be going anywhere, but it’s worth a look as an educational exercise.
Very simply, it would require any “hosting platform” (e.g., AirBnB) that allows people to “offer any property for tourist or transient use” to be responsible for making sure that the rentals are in compliance with state and local laws and regulations. It would also require the platform operators to take a more active role in the collection and transfer of all relevant taxes.
This little change in law, affecting a narrow portion of a single industry in the state, carries some important questions of the sort that we don’t consider thoroughly enough. What is the nature of commerce? Who works for whom? Who has responsibility for whom?
From a free-market perspective that starts with the individual as the origin of all economic activity, the property owners are responsible for the product that they are offering, and the hosting platforms work for them. Because they are the constituents of state and local government, they have a say in that government and can arguably be said to have consented to granting it some authority to regulate their activities.
The progressive perspective that has long been insinuating itself into Rhode Island government and encroaching on Rhode Islanders’ rights is very different. That view doesn’t begin with individuals as autonomous sources of responsibility and power. The Rhode Islanders seeking to rent their property don’t truly have ownership of themselves. Rather state and local government has claims on their activities, and the hosting platforms own their rental businesses. It is therefore reasonable for the government to require platforms to make sure that their workers comply with its requirements.
From a free-market perspective, a government that imposes requirements on people might create incentive for them to hire a contractor to do tasks for them — for AirBnB to provide inspections for regulatory compliance, for example, with an extra fee. But from a progressive perspective, the government has a right to tell companies that intend to draw profits from its people what conditions they must impose, or else they cannot do business here.
In other words, progressives implicitly believe that the government is renting us out to the companies.
Missouri has taken a step that Rhode Island should follow:
Previous state legislation in Missouri had required people who wanted to braid hair for profit to obtain a cosmetology license — which required the completion of 1,500 hours of training.
This requirement was time-consuming, expensive, and created an unnecessary obstacle that made using one’s knowledge and skills to earn a living more difficult. Furthermore, it mostly affected women of color, who primarily make up both the customers and the braiders.
The requirement was yet another example of the ways regulations hurt everyday Americans’ ability to provide for themselves and to pursue their own economic liberty.
We can discuss in a more rigorous way when licensing is needed. Is the use of chemicals a line? Should it be a matter of life and death or contagion? But surely, when one person consents to give money to another to braid her or his hair, the government doesn’t have to be in the middle of that transaction, especially to require a license for something that hair braiders don’t actually do.
I don’t doubt that Jocelyn DoCouto will eventually win her issue with the State of Rhode Island. What’s astonishing is that it should take years of advocacy and lobbying to get it done:
I have spent my life mastering the art of African-style, natural hair care. As a young girl, I learned to braid and even practiced on my own head. I later learned more advanced techniques from my aunt. My knowledge has expanded to include weaving, crocheting, extension braiding and many other natural techniques — all collectively referred to as “protective styling.”
I started receiving clients at home, based completely on referrals, and now have customers of all ages. I have even been lucky enough to use this art to give clients who have recently undergone chemotherapy the protective, natural styles they have always wanted. And I strive do the best job possible for every client who walks through my door, because my customers’ satisfaction literally determines whether my business lives or dies.
I wanted to open my own salon, but Rhode Island would not let me. Under state law, I am not allowed to braid hair without a cosmetology license, which requires 1,200 hours of irrelevant training and can cost upwards of $17,000.
As I wrote earlier, Rhode Island can have a vibrant, innovative economy, or it can have its insider system, but it can’t have both. It is well past time for us to let people like Ms. DoCouto explore their areas of specialty, even if it means some comfortable people have to compete a little harder.
In the Washington Examiner, Paul Bedard points to an under-reported achievement of the Trump administration:
When he came to office, Trump promised to cut two regulations for every new one he imposed.
The duo said that the percentage is actually 3.75 to 1, an unprecedented reduction.
Trump believes that cutting regulations, while it receives few headlines, is one of his team’s biggest accomplishments and a driver in the improving economy and investment in the United States.
Contrast this with Rhode Island’s efforts. Here, it takes years to create a special commission that takes years to get rolling in order to produce a short list of licenses and regulations that can maybe be taken off the books, which list the legislature will trim before it becomes law, after which the special interests that benefited from the existence of the regulations will agitate to put them back.
This shouldn’t be so hard. Rhode Island overtaxes and over-regulates. We need a strong, quick push that changes the impression of our state into one barreling in the right direction, and the right direction is not extending limited taxpayer subsidies to counteract the effects of our taxes and regulations for hand-picked companies willing to cut deals with politicians.
Perhaps it’s healthy every now and then to post something without implying that one knows how to fit it into a mural of opinions. If so, I’ve found an opportunity in this news:
Rhode Island’s median house price jumped 13 percent in March, rising to $265,000, as the inventory of houses for sale plunged by 16 percent, compared to March 2017, the Rhode Island Association of Realtors reported Thursday.
Naturally, the realtors’ association suggests the problem is that they need more properties to sell. In general, the trend would seem to count as contrary evidence to assertions that the state is losing people.
Both economic curves that bear on price come into play, here: supply and demand. It could be that people want to buy property in Rhode Island, and that’s driving up prices. Or it could be that regulations are too restrictive to allow sufficient expansion of supply. And referring to “regulations,” we have to expand the term not only to mean direct zoning restrictions and the like, but also other regulations, like licensing restrictions that drive up the cost of building.
Too many threads must be unwoven, here, for a rainy Thursday, and I don’t have a quick answer. I continue to hold that people should have a right at the local level to determine what sort of community they live in. (Although, I’ll generally argue against using that right to hamstring your neighbors.) I’d also suggest that we do too much to subsidize some construction while restricting different kinds of construction (say commercial versus residential), and much too much to prevent the economy from growing quickly enough for people to be able to afford housing.
My suspicion, in other words, is that all of Rhode Island’s economic meddling is doing something to focus economic value unnaturally on housing. I also suspect the people who benefit from that state of affairs would be much better able to explain it.
This last week, one of America’s leading conservative thinkers, Arthur Brooks of the American Enterprise Institute, inspired over sixty local leaders at our Rhode Island Center for Freedom & Prosperity leadership luncheon. One guest said: “Every once in a while I get the opportunity to experience something that will change my life in such a profound positive way, that was exactly what happened to me yesterday as I listened to Mr. Arthur Brooks’ words of wisdom. I was further empowered and assured that together we all can and should make that needed difference!”
With “life entrepreneurship” as his central theme, Brooks encouraged the lawmakers and civic leaders in the audience to advance a “start up your life” attitude among the people of Rhode Island. Brooks said that by taking the risk of investing love, time, and commitment to the important people and self-improvement opportunities in one’s life, that this “start up your life” attitude will bring happiness, prosperity, and overall returns on that investment many times over.
The feedback from the bipartisan attendees, whether liberal or conservative, was overwhelmingly positive. As only Arthur Brooks can do, he challenged us intellectually to consider the kind of moral, family, and work culture we want to have in our state. Click here now to see pictures of the event.
Occupational licensing takes rungs off the mobility ladder for those who most need them, suggests Jared Meyer, writing in the Washington Examiner:
According to estimates by the Archbridge report’s authors, the growth of licensing corresponded with up to a 6.7 percent decline in absolute mobility, depending on the state. In other words, because of occupational licensing, children who grow up in low-income families are less likely to achieve the American Dream when they are adults. …
Researchers are still discovering just how much occupational licensing harms economic mobility, but there is no question that these barriers disproportionately harm low-income individuals. The Archbridge Institute’s new report, along with a continued focus on the problem by state and federal policymakers, offers hope that more positive policy changes are coming.
According to the report, the reduction in upward mobility for Rhode Island due to its licensing regime is 3.7%, and the increase in the Gini Coefficient (a measure of income inequality) is 8.6%. That is, occupational licensing helps those who’ve already made it keep it and serves to block those who haven’t from doing so.
Added to tax burdens and every other drag that Rhode Island puts on economic activity, licensing is one reason the “productive class.” We don’t need more programs, government handouts, and central control. We need more freedom and opportunity.
Whether it’s removing market signals with a value-added tax or creating incentive to block new children through zoning, public policy shouldn’t remove its red flags and should seek to address original problems, not symptoms.