Conservatives and libertarians are generally strong believers in federalism. We tend to support the notion that, as Supreme Court Justice Louis Brandeis said, “States are laboratories of democracy,” and innovative policy work requires competition and insight from all 50 states. Insofar as people’s basic rights are protected federally, it makes the most sense to tailor policies toward the needs of communities, with more responsive, local governments at the helm.
Despite our fealty to the governance principles laid out in the 10th Amendment, those of us on the right often end up overlooking local policies that contribute heavily to regional quality of life issues. It makes sense, and it reflects the realities of our 24-hour national cable news cycle. After all, it’s less sexy to focus on your city’s housing regulations when President Obama is declaring victory on marriage equality.
That’s not to say of course, that national politics aren’t important. They are, very much so – especially when federal officials are intent on consolidating even more power in an ever-richer Washington D.C. We cannot however, assume that every policy battle ought to be fought on Capitol Hill. There are many winnable fights brewing on the state, and even county and city levels, where allies can cross traditional political boundaries.
The truth is, the federal government is not alone in its propensity toward enacting policies ostensibly aimed at helping vulnerable segments of society yet in turn, further diminishing their opportunities. State and local governments are especially guilty of this when it come to matters such as housing policy, zoning, regulating the sharing economy, and occupational licensing, just to name a few.
In a recent article at The Federalist, Chuck Devore, Vice President of Policy at the Texas Public Policy Institute, explains how in the realm of housing, liberal policies have made life exceptionally difficult for the least well-off. As Devore noted:
“Housing prices are going up because of artificial scarcity caused by land-use regulation. Put another way, the concentration of wealth is not an issue of the ‘1 percent’ winning while the rest of us lose—it’s an issue of homeowners benefitting from government restrictions on property rights that prevent a free market in homebuilding, restricting supply and driving up prices.”
This strikes at the heart of urban poverty, which is especially problematic in the nation’s most left-wing cities. Take San Francisco. Reason Magazine’s Scott Beyer delved into how the city’s progressive policies take an active toll on the poor. As Beyer explained:
“San Francisco now has one of the nation’s most expensive markets, with median home prices at $1 million. Numerous explanations have surfaced for what caused the spike, ranging from the area’s growing population and wealth, to its land constraints. But the spike can also be explained by regulations that discourage new housing. For example, lots within the city’s downtown, where infrastructure is already in place to handle added population, are held to severe height restrictions, and this is even more the case in outlying neighborhoods. The structures that are built endure robust approval processes that can take years, and require millions in lobbying—creating expenses that get passed down onto customers ….
….. The political establishment’s response has been to impose anti-market forces onto the housing that does exist, under the impression that this will keep prices down. Three-quarters of San Francisco’s units are rent-controlled because of a law that requires this for buildings constructed before 1979. Mainstream economists have long believed that such laws are counterproductive, because they encourage price spiking of market rate units, and under-maintenance or abandonment of the regulated ones. This has been the case in San Francisco: Along with laws that make evicting bad tenants difficult, rent control has prevented landlords from collecting the necessary fees for upkeep. As a result, they have left vacant an estimated 10,600 units, or 5 percent of citywide housing stock.”
Beyond its housing problem, San Francisco’s war on the poor continues with labor laws. An increase in the minimum wage spiked inflation in the city, but didn’t, according to a University of California Berkeley study, have a measurable impact on increasing working class wealth. As Beyer notes, “the purchasing power of $1 in San Francisco is 40 percent less than in cities like Houston and New Orleans.”
Similar scenarios with the minimum wage have unfolded in cities across the country. Seattle raised its to $15 per hour, and the results took a predictable toll on small businesses coupled with increased prices, all while providing no measurable benefit to those most in need. Progressive wars on entrepreneurial pursuits have also taken the form of increased local strangling of the sharing economy, with attempts at pushing platforms such as Uber and AirBnb out of the market.
New York City and their far-left mayor Bill de Blasio have been especially guilty of working to ban innovative competition to the city’s mandated monopolies on the hotel and transportation industries. The city has a longstanding policy against residents who could benefit from the extra income renting out space in their own homes, and recently, de Blasio declared all-out war on Uber, highlighting his preference for the city’s high-cost taxi cartel at the expense of Uber’s lower prices, better service, and the jobs it generates for working class New Yorkers.
While all of the aforementioned city policies, plus zoning laws, often contribute to inequality, poverty, and even racial discrimination, perhaps the most pernicious local regulatory regime comes in the form of occupational licensing. There are no federal laws surrounding the licenses one must obtain for jobs such as hairdressing, interior design, plumbing, and a host of other largely middle- and working-class jobs. However, many states and cities are guilty of over-regulating the processes necessary to obtain professional licensure, frequently at the behest of big companies looking to squash competition.
This licensing process often prevents would-be entrepreneurs from ever starting a business, and contributes to trapping people who could otherwise lift themselves out of poverty. As a study conducted by the Goldwater Institute entitled, “Bootstraps Tangled in Red Tape: How State Occupational Licensing Hinders Low-Income Entrepreneurship” proves, these regulations generally extend far beyond necessary safety training, and create layers of bureaucracy that disproportionately impact low-income workers.
“Although the benefits of entrepreneurship to business creators, their employees, and communities are well established, it is becoming more obvious that those who can most benefit from rising levels of entrepreneurship—low-income households—face unique impediments that fall harder on them than other budding entrepreneurs. For example, high-tech fields that drive innovation, many of which consist mainly of small start-up firms, do not require any sort of licensing or, for that matter, a college degree. (The well-known example of successful tech companies started by college dropouts is relevant here.) On the other hand, occupational fields that contain the most likely entrepreneurial opportunities for low-income workers are among the most heavily regulated in terms of state-required licensing and experience or degree requirements.”
While the barrier to entry that is excessive occupational licensing continues to hurt low-income entrepreneurs, awareness of this issue is increasing. Steps are slowly but surely being taken to remedy some of the most egregious examples of arbitrary if not outright crony regulatory schemes. For example, the Texas Supreme Court recently struck down a particularly absurd licensing law.
“In Patel v. Texas Department of Licensing and Regulation, the court invalidated state regulations requiring an individual to complete 750 hours of training from an accredited cosmetology school before they can practice hair threading, an ancient technique for removing facial or body hair using a thin string.
I don’t know much about hair threading. On the other hand, neither do most schools of cosmetology. As the majority opinion notes, of the nearly 400 state-approved beauty schools in Texas, fewer than ten teach threading techniques at all. Only one devotes more than a few hours to the practice. Instead, much of the required curriculum is on topics that have nothing to do with hair threading.”
A similar victory was obtained in Mississippi for African hair braiders, who were forced to get a cosmetology license to practice a cultural art handed down through generations, even though the curriculum didn’t cover the braiding in question. This fight, led by entrepreneur Melony Armstrong, is chronicled in an excellent documentary called “Locked Out,” which shows how a bad regulation that was finally overturned disproportionately hurt African American women who were trapped in poverty.
Ultimately, it’s clear that a combination of well-meaning but destructive progressive policies make life much harder for the poor, particularly those in our urban centers. It’s important for policymakers to recognize that more government regulation is not always the answer, and to allow for more choice and competition. As hard as it may be for politicians, this includes reducing the influence of their favored special interests, and even giving up some of their own precious power. It’s for the good of those they claim to be advocates for.