Government regulation is a subject as dry as the desert sands to most people. But it has real, significant impacts on economic growth. Free-market thinkers have warned about that for years.
Their approach is haphazard, sure, but … baby steps. The realization itself is important. A lot of good can come if they stick with it. I hope for North Carolina’s sake they will.
Right now H.B. 2 is being fought in court. But put aside for now what eventually is decided about privacy rights in bathrooms, showers, and changing rooms. This consensus among left, right, and media can produce welcome change in lots of ways. Bigger ways.
Here are some ideas for starters:
1. Licensing reform could save North Carolina households $923 per year.
Let’s start with an idea that unites the Obama administration with libertarian and conservative policy groups nationally. It’s something that unites policy thinkers on the right and left in North Carolina. That is getting rid of unnecessary occupational licensing.
Licensing operates as a “hidden tax” on consumers in every state. According to economist Salim Furth, for North Carolina households, that hidden tax is $923 per year.
For poor households, licensing has other hidden impacts. Licensing keeps their neighborhoods from enjoying the “double dividend” those communities reap from local entrepreneurial activity. It’s not just income, it’s the much-needed new jobs, goods, and services.
2. Red tape reduction could save North Carolina households untold thousands of dollars a year.
Another issue that has united thinkers on the left and right for decades is the need to cut red tape. Federal and state overregulation slows down the economy. Unnecessary rules and regulations — red tape — drags down the economy for no good reason.
On just the state level, red tape and regulation cost North Carolina’s economy as much as $25 billion. Every year.
Worse, our losses build over time. How much have we cost ourselves by overregulation? Well, it depends on when you start counting.
Recently, some professors at Duke University looking at federal regulations started counting from 1980. They found the U.S. economy could be 25 percent larger than it actually is. All that new red tape and regulation from 1980 on was basically costing each one of us $13,000 a year.
If you start counting in 1949, like economists at Appalachian State and N.C. State did, you’ll find the U.S. economy is only about one quarter the size it could be. All that new federal red tape and regulation from 1949 on was basically costing each one of us $129,300 per year.
Red tape reduction would stop this unnecessary bleeding. It’s a ripe reform for this new consensus against government actions that might have negative effects on jobs, growth, and opportunities.
This consensus of media and liberal pundits and free-market thinkers should also, of course, be on the lookout against looming threats to jobs, growth, and opportunities.
3. Blocking new U.S. Environmental Protection Agency (EPA) regulations would save people billions upon billions of dollars a year in new costs.
A study by NERA Economic Consulting estimated monstrous costs to comply with the EPA’s proposed new regulations for existing power plants: at least $366 billion in compliance, double-digit percentage increases on electricity rates in 15 years for most of us, shutting down power plants and throwing power plant employees out of work prematurely. It would cost consumers and businesses $41 billion per year or more.
Those are unbelievably steep costs! And for what? Just to trim global warming by 0.02 degrees by 2100 and sea level rise by just 0.01 inch, according to the EPA’s own models?
Notwithstanding the economic impact of laws governing access to public showers and dressing rooms in North Carolina, they wouldn’t hold a candle to the destruction such a plan like this would cause.
4. Resisting political pressure to hike the minimum wage would save at least 46,000 jobs in North Carolina.
That’s according to estimates from a recent study published in the Journal of Labor Research. And it’s only for raising the minimum wage to $10.10 per hour.
More than doubling the minimum wage to $15 would have much, much worse impacts.
Vast majorities of economists surveyed warn of lost jobs, greater skill requirements even for entry-level jobs, fewer young people able to find work, and business closings.
It’s great there’s such widespread agreement that government policies can have bad economic effects on people and should be heavily scrutinized. There are some really big ones out there. Let’s get started.
Jon Sanders (@jonpsanders) is director of regulatory studies for the John Locke Foundation.