March 11, 2014

Lust For Licensure

I honestly think that one of these days someone is going to propose requiring a Missouri license to hypnotize chickens. During this year’s legislative session in Jefferson City, the quest to unnecessarily license new occupations continues. Next up: home health care agencies, electricians statewide, and expanded licensing rules for landscape workers. None of these new or expanded regulations are justified.

Did you know that areas with stricter electrician licensing actually have higher rates of electrocution? It’s true. Licensing increases costs, increased costs lead to more do-it-yourself work, and that leads to more accidents. Similarly, is there a current crisis in Missouri regarding landscaping that I am oblivious to?

Missouri has fewer licensed occupations than other states. We should be proud of that. Simply put, all of the occupations that have some sort of legitimate role for licensing are already licensed at the state or local level. We need to be removing unnecessary licenses and making it more difficult to implement new ones. When it comes to licensing rules in Missouri, we need to pass rules setting demonstrated needs and benefits before new occupations can be licensed. We don’t need to add new occupations to an already too-long list.

January 16, 2014

Taxicab Reforms In Missouri

Kansas City officials are considering changes to the taxicab licensing ordinance that would make it easier for non-profits and churches to offer rides around the city. Tony’s Kansas City has the story here. I support the changes, even though I understand the concerns about treating non-profits differently than regular cab companies. It is a difficult call. If you support treating all companies the same (I do), but the treatment, a.k.a. the local regulations, is awful, do you force everyone to suffer from the same awful rules? In this case, I do not, and I hope loosening up the regulations for some will lead to less restrictive rules for all.

It is the same story of awful taxicab regulations in Saint Louis. Here is Uber, the nationwide, web-based private car service, explaining why they won’t enter the Saint Louis market. The same basic explanation applies to Kansas City, which means they are not giving consumers more choice in Missouri, while they do in many other parts of the nation. Are the safety and regulatory concerns in Missouri substantially greater than all those other cities? Of course not.

I know a little about taxicab licensing. I once opened a bribe for a county councilman from a taxicab operator looking for stricter regulations to protect his company from competition. That councilman and I reported the bribe to police instantly, but another councilman who had been taking bribes went to prison.

Taxicab licensing is there to protect the interests of the cab companies, not the public. Consumers now are more empowered by knowledge when dealing with cabs, like your cell phone and GPS telling you if a cabbie is taking you on a long route. Old rules such as uniforms, regulated fares, limits on cab licenses, and restricted areas (i.e., the airport) are no longer necessary. All that is needed is a basic cab registration with the city or county (for the protection of both the driver and passengers), driving record checks on the drivers, and inspecting meters (but not rates) to make sure they are accurate and properly posted. That’s all.

With these changes, maybe people in Saint Louis would be able to get a cab on New Year’s Eve.

January 9, 2014

There Is No Jury Better Than The Hat

I recently heard a story on NPR about government officials in Madrid, Spain, requiring street performers, mostly singers and musicians, to audition for permission to play on public streets. These new regulations also require that those approved acts remain a certain distance from one another and change locations every few hours. The piece offered:

And with more than a quarter of Spaniards out of work, more people than ever before have been crisscrossing the city with their violins and voices, for extra cash. People squeeze giant accordions onto the metro, and roll amplifiers on carts across cobblestones.

The street performers are a tourist attraction. But Madrid’s mayor, Ana Botella, says the clamor has reached its limit.

If this sounds like an idea that could only gain traction in a country known for fascist leadership, consider that Saint Louis did the exact same thing until recently. The Show-Me Institute has highlighted efforts to reform occupational licensing for things such as performers and valet parking.

It might be in the city’s best interest to regulate the activity to provide for passable sidewalks and streets, and to protect Madrid’s tourism industry. However, one such group of performers, called the Potato Omelette Band, objected to the requirement and secretly videotaped its audition, which contained lyrics critical of the city effort:

“Oh, my poor Madrid, my city. They are kicking out musicians and artists, and replacing them with police,” the song goes. “There is no jury better than the hat — the hat you put on the floor to collect donations.”

Indeed. While Americans debate whether government ought to act on an issue or whether it even has the power to act, musicians in Madrid remind us of the simple truth that nothing is better suited to solve problems than free people operating in a free market.

December 13, 2013

Using Questionable Data To Back City Planning

A recent report from the Pew Charitable Trust called for increased affordable housing in cities across America. As the Atlantic reports, the authors suggested:

Solutions like requiring developers to include affordable housing units in new projects and developing metropolitan-wide transportation are politically unpopular. But they are a necessary part of any effort to restore economic mobility and the American Dream.

While everyone supports economic mobility and the American Dream, there is not adequate evidence to back the authors’ call for more regulation and transportation subsidies.

According to the report, “Mobility and the Metropolis: How Communities Factor Into Economic Mobility,” income segregation in a city leads to low economic mobility. This is important for Missouri cities such as Saint Louis, where income segregation is high and income mobility is low. The authors of the study would have Saint Louis expand transit and entice developers to build mixed-income housing. However, the track record of Saint Louis-area transit-oriented development has been less than ideal, as exemplified by a subsidized apartment complex near the Richmond Heights Metrolink station. A closer look at statistical models of the report calls their entire conclusion into question.

Without getting into too much detail, the problem with the report is that their model only finds an effect from income segregation when they don’t include other relevant explanatory factors. For instance, analyze New York City, which has among the highest income segregation (A) and lowest economic mobility (B) ratings. The report would have you believe that A contributes to/causes B, so improving A improves B. But what if (C), the dominance of financial services or legal professions, causes both A and B in New York City? Then fixing A will have no practical impact on B. In the complicated areas of income segregation, we must account for many possible factors like C.

However, the report promotes a simplified model that only shows a relationship between income segregation and economic mobility without including enough alternative variables. The report did not even mention that their model demographic variables did not show that income segregation was associated with economic immobility. Despite this shortcoming, both the report and media coverage have used the report to make irresponsibly expansive policy recommendations.

This over-hyping of statistical data can be all too common in the social sciences, so Missouri policymakers and citizens have to be vigilant. It is easy to twist data to justify government intervention if no one challenges the strength of the result.

November 28, 2013

We Are Thankful For Data

Debate over public policy is rife with stories about individuals who will benefit or suffer from proposed legislation. It can be a difficult thing with which to wrestle. And because much of what is offered is anecdotal, it could be true and yet not at all representative of the impact of the regulation at hand.

Debate in Missouri about Medicaid, education, and taxation is filled with anecdotes that give an either incomplete or misleading picture of policy proposals. That is why we here at the Show-Me Institute love data. Spreadsheets may not make for an impressive photo opportunity, but data analysis is necessary if we are going to improve the lives of Missourians.

To that end, our colleague Michael Rathbone has been shepherding our new website: ShowMeData.org. This new interactive tool allows you to generate all sorts of data on property taxes, population, Gross State Product, labor force, employment, unemployment, and more over the years. And not just in Missouri but the entire country. For example, is it true when Missouri politicians complain that Texas Gov. Rick Perry is poaching people and  jobs? This chart shows that Texas’ population has been growing for decades while Missouri’s remains stagnant. Want to research cigarette tax rates in Missouri and neighboring states? That’s here.

Should you be locked in a political discussion this holiday with that irascible brother-in-law, visit Show-Me Data for some valuable context. We’re all grateful for the stories of America’s greatness, now we have the data to back it up.

October 30, 2013

Don’t Feed The Blob: An Open Letter To The Editor About Government’s Spooky Growth

To the Editor:

For those of us who like a good old-fashioned scare, this time of year is a real (trick or) treat. Halloween stories of ghouls, goblins, and ghosts make for a fun annual tradition, safely delivering in fiction what would be truly frightening in fact.

Yet while it does not wear a hockey mask or carry a cleaver, Missouri state government is a scary story in its own right. Today, the state spends taxpayer money at a rate of almost $800 a second, and if the fate of last year’s tax cut is any indication, it’s more likely that this spending will rise than fall. In fact, if some legislators have their way, next year, the state will throw billions more into an already broken Medicaid program. The state seems to be just like the creature from the 1950s horror film “The Blob” — growing and covering Missourians in regulations and burdens as it goes along.

Instead of feeding The Blob, the legislature should take a different approach and return power to the People — through tax cuts and other free-market, people-powered reforms. The Blob was defeated when people united to turn back its growth; defeating big government will require a similar commitment from Missourians.

Patrick Ishmael
Policy Analyst
Show-Me Institute

August 23, 2013

Blitz: Gov. Rick Perry To Visit Missouri And Run Ads Promoting Texas’ Business Climate

He’s already visited businesses in other floundering states — including Illinois, California, and New York — in an effort to get them to move to Texas. So it was inevitable that Gov. Rick Perry would eventually make a play for Missouri businesses, too. The only question was “when.” And as it turns out, the answer is … “now.”

Texas Gov. Rick Perry is at it again.

Next week, he’ll travel to Missouri to tout Texas’ low taxes, less regulation and high job creation rate.

Starting today, a 30-second television advertisement is running in the St. Louis, Springfield and Columbia-Jefferson City markets in Missouri. The ads feature small and immigrant business owners and women talking about what Texas offers, such as no state income tax. [Emphasis mine.]

And when it comes to job growth, he’ll have plenty to discuss.

While in Missouri, Perry plans to meet with employers, business leaders and the Missouri Chamber of Commerce to talk about things like Texas being a top job producer. Texas added 19,900 jobs in July, ranking No. 5 nationally, but it created 293,000 jobs in the last 12 months, more than any other state.

Now, you can love it or hate it, but to derisively call visits like this “poaching” is like calling the best looking guy in the room a girlfriend poacher: it’s an excuse for failure. Of course we lost, they’ll say. Texas is poaching. And there’s no mystery about what Perry’s objective is on his trip — it’s to get Missouri’s businesses.

But if we all know the score, the question is, will Missouri just let Texas take our businesses and jobs without a fight? Missouri entrepreneurs may have come here with the Show-Me State, but that doesn’t mean they’ll be leaving with it at the end of this economic dance. Is Missouri just going to sit there and take it as Texas continues to walk off with the state’s wealth?

August 21, 2013

Part-Time Nation: Forever 21 Stores Cap Staff Hours

As I’ve said before, one of the least-covered consequences of the Affordable Care Act (ACA) since its passage was the impact it would have on young people. Along with directly imposing onerous new health insurance mandates on young workers who 1.) generally can’t afford them and 2.) generally don’t use much in the way of health services, the ACA also gave companies the perverse incentive to reduce employees from full-time to part-time status as a way to avoid Obamacare’s employer penalties. In fact, a 2012 Congressional Budget Office described as much, estimating that the equivalent of about 800,000 jobs would be eliminated from the economy because of the law.

So what will the Obamacare part-time “new normal” look like? Like this:

“Forever 21,” reads the memo from human resources associate director Carla Macias, “recently audited its staffing levels, staffing needs and payroll in conjunction with reviewing its overall operating budget. As a result, we are reducing a number of full-time non-management positions.” All employees who received the memo will be reduced to a schedule to not exceed 29.5 hours per week. Why is that the magic number? Because under President Obama’s Affordable Care Act, mid- and large-sized employers are required to pay for health insurance for employees who work 30 hours or more. Forever 21 thinks it can get around this simply by reducing its technically-full time staff to part-time positions.

And they’re right.

Yes they are. Of course, Forever 21 is now denying that the move has anything to do with the health care law, but there’s plenty of reason for skepticism there. Why 29.5 hours? Why not 31 hours? Or 30 hours? Heck, why not a round number? And this is not the first time we’ve seen the ACA’s 30-hour work week limitations come into play. As I’ve written before, Obamacare also incentivizes companies to ship jobs overseas to avoid the 30-hour full-time equivalent work and health care requirements. Maybe legislators should have read the bill to find out what was in it before they passed it, not after.

Young people want gainful full-time employment. For many, the Affordable Care Act is standing foursquare in their way.

July 18, 2013

In Case There Were Any Doubts About The ‘Growth Corridor’ We’re In, Here’s Another Data Point

Today, Show-Me Institute Research Fellow Rik Hafer wrote in the St. Louis Beacon about a recent CNBC business survey and how Missouri did. The result: Missouri ranked just on the bottom half of the list in 26th place. Now, “about average” wouldn’t be so bad normally, but as we’ve noted before, Missouri finds itself near the epicenter of the Midwestern growth corridor — where “average” simply isn’t good enough. CNBC’s survey demonstrates the existence of the corridor yet again.

The top four states in CNBC’s survey are right in the middle of the growth corridor: 1. South Dakota, 2. Texas, 3. North Dakota, and 4. Nebraska. And make no mistake, not all of these states were always ranked so high. As far back as 2008, Nebraska’s CNBC ranking was tracking closely with Missouri’s. But then . . . it wasn’t. Nebraska moved into the top five nationwide; meanwhile, Missouri fell further behind. Kansas is always cited as a reason Missouri should be working hard to make itself more attractive to business, and that remains an obvious argument. But Missouri’s economic problems do not begin and end with Kansas, as the Nebraska example bears out. A broader picture of the region that includes only our immediate neighbors should also concern Missourians: Of the eight states that border Missouri, only two are ranked worse — Illinois and Kentucky, both on Missouri’s eastern border.

Now as we always note, your mileage will vary with these surveys, but as Hafer notes, when just about all of them are showing basically the same thing, it makes Missouri’s economic problems all the more clear.

Should we care about such surveys[?] When they converge, yes. CNBC’s ranking corroborates Forbes magazine’s 2013 ranking analysis that placed Missouri at 29. And a report from CNBC earlier this year showed that using data from the National Association of Manufacturers, Missouri did not even make the list of 20 states with the highest manufacturing job creation since the end of 2009. Notably, Illinois, Iowa, Kansas, Kentucky and Tennessee all made the list.

Will Missouri continue down a path of mediocrity? It will unless its leaders — both political and business — grapple with those issues over which they have some control to change in a manner that enticed businesses to start or relocate to our state. Education and tax policies seem like a good place to start the discussion.

Missouri has been headed in the wrong direction for far too long. It’s time to change course.

June 25, 2013

No Fee For Photographers

When photographers saw a sign in Faust Park in Saint Louis County this spring banning professional photography without a permit, complaints began immediately. The sign was removed quickly, but photographers still worried about the potential cost of a permit to use Saint Louis County parks. County officials stated that the policy would be under review, and a rule change requiring a permit could go into effect.

Engaged citizens continued to speak out against the permit and news stories documented the issue. The Show-Me Institute contributed to the opposition with testimony we submitted to the county and a conversation about the issue on the Big 550 KTRS. I am happy to report that last week, the Saint Louis County Parks Department announced the policy has been completely dropped.

Photographers don’t impose a higher cost to the county than other park-goers and already contribute taxes to use the parks as area residents and business owners. A user fee would have been unnecessary, and I’m glad the county chose not to impose it.

May 30, 2013

Columbia Could Pave The Way For Food Trucks

It’s food truck season again. As food trucks grow in popularity, more cities are working on policies to set guidelines for these mobile eateries.

Columbia’s Downtown Community Improvement District (CID) hopes to update a city ordinance to allow food trucks on downtown streets. CID board members, restaurant owners, and food truck representatives worked together to find a solution that should please all parties.

Hopefully regulations will not look like the 75 pages of food truck rules that the Council of Washington, D.C., recently introduced. Several food trucks staged a protest a few days before the Council hearing (short video here). Trucks parked at their normal lunch spots, but refused to open for business during the lunch rush. These trucks wanted to show what lunch would be like in their absence if the city imposed overly burdensome regulations on the trucks.

Columbia’s food truck business, on the other hand, is only just beginning. The city has two food trucks operating right now, Pepe’s and Sunflower Waffle Co. But the CID is smart in thinking ahead, looking to prevent issues before a problem starts. The CID board members, restaurant owners, and food truck  representatives all agreed on certain public areas that would be best suited to food truck occupancy.

While it is helpful that varying interests are working together, the city can best encourage food truck business by imposing as few regulations as possible. Excessive rules or fees would deter entrepreneurs from starting up new food trucks. Confining the mobile vendors to specific areas of the city may help keep restaurant owners from complaining, but it also may limit the success of food trucks, if they can’t freely go where customers want them.

May 21, 2013

The Right Direction On Occupational Licensing In Missouri

The Missouri Legislature passed Senate Bill 330 last week. I hope the governor signs it (I cannot see a reason for a veto). SB 330 makes several small but worthwhile changes to state licensing rules. Generally speaking, the legislation expands the practice areas of certain jobs, allowing them to do things they were previously prevented from doing. Nurses, dental assistants, and counselors now all have slightly expanded practice areas and slightly reduced regulatory control of their jobs. This is a good thing. Furthermore, there are now a few more ways to become licensed as a hearing instrument specialist in Missouri. This is also a good thing.

What is a VERY good thing is that we appear to be moving in the right direction on the larger issue in Missouri. To the best of my knowledge, we have not passed wholesale licensing requirements for a new occupation in Missouri for a few years. (I may be overlooking some, but I do not think so.) Last year, due to prompting by court rulings, the state significantly reduced the licensing burdens to open a moving company in our state. This year, we passed SB 330, with its entirely positive changes. At the state level, we have leaders such as Missouri Rep. Eric Burlison (R-Dist. 133) who care about the personal and economic harms when government makes choices that markets and customers should be making.

At the local level, we still see an expansion of licensing abuses, from street performer auditions and valet parking licenses in Saint Louis to totally bogus HVAC rules in Saint Louis County. But at the state level, we are doing the right thing. Remember, occupational licensing of most occupations benefits current practitioners at the expense of future competitors and the public. We need less of it in Missouri.

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