Starting late in the Obama administration, Americans’ life spans began dropping (coincidentally or not, this happened after Obamacare went fully into effect in 2014; the opioid crisis has been cited as a possible cause of the drop in life spans).
But in most of the world, life has gotten better. Life spans in the world as a whole have never been so high in human history. As Human Progress notes, in 1981, “44.3 percent of the world lived in extreme poverty.” But “in 2015,” only “9.6 percent” did. The last forty years have seen “massive and historically unprecedented decline in global poverty.”
At Human Progress, Marian Tupy points out that “America experienced her lowest poverty rate since 1974 in 2000, when openness of the American economy, as measured by the Fraser Institute’s Economic Freedom of the World index, was at its highest. Since then, America’s economy has become less free.” Tupy asks, “Could that be the reason why the American recovery from the Great Recession was so sluggish and why America’s poverty rate has not retreated as fast as it did on previous occasions?” (Tupy is a Ph.D and expert on development who has briefed the State Department and intelligence officials).
In America, the economy has grown less open due to things like the proliferation of occupational licensing regulations. Occupational licensing has expanded from covering 5 percent of the workforce in the 1950s to 30 percent today. Now, many people are required to get a license from a state or local government just to cut someone’s hair, be an interior designer, or be a tour guide. Such regulations increase costs to consumers and are usually unnecessary. They have spread to the point that they were criticized by officials in both the Obama and Trump administrations.
As Reason Magazine’s Eric Boehm observed, “During the Obama administration, the Department of Labor and the White House Council of Economic Advisers published a lengthy report on licensing laws, and called for states to take action to remove unnecessary barriers to work. ‘Licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars,’ it concluded.”
In 2017, the current Labor Secretary, Alex Acosta, described the harm of these regulations in a speech to state legislators:
“Excess licensing hinders the American workforce.
“First, the cost and complexity of licensing creates an economic barrier for Americans seeking a job, especially for those with fewer financial resources.
“Second, excessive licensing creates a barrier for Americans that move from state to state.
“Third, excessive licensing creates a barrier for Americans looking to leverage technology and to expand their job opportunities.”
Excessive occupational licensing also drives up the crime rate by leaving ex-cons jobless. People are more likely to commit crimes if they can’t find a job after being released from prison. Occupational licensing regulations make it harder for them to find a job. A 2017 study found that “formerly incarcerated residents are more likely to commit a new crime within three years of being released from prison if they live in a state where they’re prohibited from getting a license solely for having a criminal record.” Occupational licensing restrictions disproportionately harm African-Americans, excluding them from jobs at a higher rate than other races.
As Eric Boehm notes at Reason:
“Licensing is a barrier to entry for all Americans looking for work in certain professions, but it’s particularly pernicious for those on the lower end of the economic ladder. For example, getting a license to cut hair can require more than a year of expensive schooling in some states, while becoming an interior designer in places like Florida requires more than 2,000 days (yes, days!) of training. There’s little evidence that licensing those professions does much of anything to protect public health and safety.
“Once you have a license, you might be stuck in the state where you earned it. A 2015 study by the Brookings Institution found that licensed workers were less likely to migrate between states, but not necessarily because people are happy in those places. Instead, researchers say workers feel locked in place because most state-issued professional licenses are not transferable, so moving out-of-state means you’d be out of business unless you can obtain a new license in your new home.”
Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law.
Editor's Note: This piece was originally published by Liberty Unyielding and was reprinted with permission from the author.