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The System is Rigged: Licensing Limits the Pursuit of Happiness

Onerous licensing laws make it harder for people to move from place to place. And less residential mobility means less economic mobility.

CBS/ZUMA Press/NewscomCBS/ZUMA Press/NewscomAmericans have always taken the idea of "the pursuit of happiness" rather literally. From east to west, south to north and back again, each generation tends to reshape the country by moving from place to place in search of better things.

Though it hasn't attracted as much attention as overblown fears about declining economic mobility, residential mobility—how easy or hard it is for someone to move from place to place in pursuit of better economic conditions—is on the decline. That matters, because when it's harder for people to move where the jobs are, it's also harder for them to move up the economic ladder.

That's the premise of a new paper by Scott Winship, a senior fellow with the Manhattan Institute. Winship argues that licensing and other regulations, like zoning laws, make it harder than ever for workers to move from one state to another in pursuit of better jobs.

"There is a widespread belief that Americans' economic mobility has declined and that Americans are also less likely to 'move to opportunity' than in the past," says Winship. "These two assertions have been linked to argue that falling residential mobility is an important factor behind diminished economic opportunity in America."

There's no doubt that states with higher licensing burdens see lower migration rates. In a wide-ranging report released last year on the consequences of licensing, the Brookings Institution identified a gap in migration rates between states with high licensing burdens and those with lower licensing burdens.

Source: Brookings InstitutionSource: Brookings Institution

There could be any number of reasons for that beyond licensing—certainly there's a wide range of reasons why people would leave one state for another. ??'s study attempts to prove a causal link between those two things, essentially showing that declining residential mobility is causing declining economic mobility.

Most licenses aren't transferrable between states, so even though there might be a wealth of opportunities for interior designers in Washington, D.C., potential workers might think twice about moving there because they'd have to take 2,000 hours worth of classes and pass an exam before they can get a job.

More than one-third of all jobs in the United States is now subject to some form of licensing (up from just one in 10 jobs in 1970, acording to research by Morris Kleiner at the University of Minnesota), so more workers than ever before are forced to take their licenses into consideration when thinking about a move.

Ilya Somin, a law professor at George Mason University, laments that neither major party is discussion these serious issues. In a column at USA Today, Somin notes that the need to reform licensing laws is generally agreed upon by academics on all sides of the political spectrum, but still hasn't caught on with lawmakers—to the detriment of middle and lower income workers.

"In many cases, lower-income workers cannot move to practice their professions in a new state because of the new to meet burdensome licensing requirements," Somin writes. "Interest groups lobby to ensure that state licensing regimes make it difficult for competitors to come in from other states."

In short, the system is rigged against newcomers.

If Donald Trump were running anything like a competent campaign, this might be something that he'd have mentioned a few times by now. The notion that bureaucrats in Washington, D.C., and state capitals have creating licensing schemes that make it harder for workers to find jobs, harder for them to change jobs and driven up the price of basic household goods would square nicely with the anti-establishment, blame-the-politicians-for-this-fine-mess narrative he's been pushing for more than a year.

By now it's clear that he's more interested in stoking the flames of nationalism by blaming America's economic problems on immigrants, China and international schemes to move jobs out of the country.

For her part, Hillary Clinton has paid lip service to the idea that excessive licensing is bad for the economy, but it's hardly been a central theme of her campaign. As I wrote previously, she's mostly just promising to continue the (laudable) efforts of the Obama administration to make states pay more attention to this issue. She's also promising to spend tax money to effectively bribe states and cities into changing their licensing laws, which is a questionable strategy at best.

I doubt we'll hear anything about this issue during tonight's third and final presidential debate, but here's to hoping we do.

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  • Fist of Etiquette||

    No one wants small businesses to come to their state. It's the biggies, the ones who require tax breaks to move in. Small businesses are just burdens.

  • Deep Lurker||

    No politician wants small business to come to their state. Big businesses are more comfortable with politics and large bureaucracies, and offer much better opportunities for graft, corruption, and the sweet sweet exercise of raw political power.

  • Akira||

    "Big businesses ... offer much better opportunities for graft, corruption, and the sweet sweet exercise of raw political power."

    Exactly. If a given industry had a cartel of a few giant companies (like health insurance!) it would be much easier for the government to "regulate" those companies until there was de facto government ownership of that industry. Naturally, any subsequent problems with this industry would be blamed on "laissez-faire capitalism" and "deregulation" since there is, in theory, private ownership of these companies.

  • Azathoth!!||

    But don't you wonder what kind of licensing it would take to get Reason to finally pay attention to those Project Veritas videos?

  • loveconstitution1789||

    My state wants big and small business. In fact we are almost at the top of movie and tv producing states and not Taxifornia.

  • ||

    I had a run in with this very problem not too long ago.

    When I got my motorcycle license 10 years ago, you just had to go to the DMV and pass the test, then they sent you a new regular license in the mail with the "M" tack onto it.

    When my wife went two years ago, Texas, that bastion of freedom, passed a new law saying you had to pass a state-approved safety course before being allowed to take the test. And wouldn't you know it, there's only a few outfits authorized in every locality to provide the test, they all charge a lot, and it takes all weekend. And in my wife's particular case, they made her take the course on a Harley Roadster, which she found much more difficult to use than the Ninja 250 I'd been teaching her on. She didn't pass, and you have to pay full price to take it again. So we just decided to ride dirty and fuck the man. It was such an obvious exercise in rent-seeking it curdled my man-milk.

  • Hugh Akston||

    I assume from the context that riding dirty involves face-sitting after using the bathroom without wiping?

  • Diane Reynolds (Paul.)||

    Jesus Christ, Hugh.

  • Crusty Juggler||

    For once Hugh is correct.

  • Ayn Random Variation||

    Thanks for having the guts to say what we were all thinking.

  • DOOMco||

    has she looked at the new R3?

  • AlmightyJB||

    The System is Huuuge!

  • Jerryskids||

    Mobility is a huge social problem and it needs to be clamped down on. Look, if there are problems in your community, you can't just pack up and move. It's incumbent upon you as a member of the community to work together with your friends and neighbors to improve the community, not abandon it. "It takes a village" doesn't just refer to the child's responsibility to the community, it refers to the community's responsibility to the child. It's like with failing public schools that they won't let you opt out of - you have a duty to help improve the schools and if your kid suffers as a result, well, you gotta break a few eggs to make an omelet, right? How're we going to make an omelet if the eggs keep running away? Now get your ass back in the carton and stay there.

  • Hugh Akston||

    That's precisely why we need to put walls up around every state. Not just to keep outsiders from getting in to pursue a better life. but also to keep insiders from leaving to pursue a better life.

  • Diane Reynolds (Paul.)||

    +1 Transit Corridor!

  • Crusty Juggler||

    Would would would would.

    Alt text: "License 'em, Dano."

  • Brochettaward||

    We essentially have the return of economic guilds through the regulatory-welfare state. And when the environmentalists have their way, we'll basically be done with that whole private property thing.

    It always amazed me reading Marx just how fondly he wrote about feudalism.

  • Deep Lurker||

    I'd expect Trump to, if anything, voice support occupational licensing as part of his "Immigrants Are Stealing American Jobs!" pitch.

    As for Clinton, my bet is that she opposes State and local licensing laws because she feels that the ideal solution is for the Federal Government to take over occupational licensing and then take it up to eleven.

  • Deep Lurker||

    Whoops! I intended the above to be an independent comment, not a reply to Brochettaward.

  • John Titor||

    Marx was writing in the middle of the Romantic period, originally driven by the German Sturm und Drang movement's rejection of Enlightenment rationalism. While the Enlightenment writers and artists tended to be heavily influenced by the logos of the classical Greek and Roman tradition, the Romantic period had on a very deliberate focus on medieval values and knightly virtue.

  • Uncle Jay||

    RE: The System is Rigged: Licensing Limits The Pursuit of Happiness
    Onerous licensing laws make it harder for people to move from place to place. And less residential mobility means less economic mobility.

    Well of course burdensome licensing laws make it harder for the little people to move around and have less mobility. The State must control the unwashed masses at all times, and employing needless and really stupid licensing laws is one of the better ways to control them.
    What else would expect from our ruling elitist filth?

  • Zunalter||

    Considering our progressive tax system, why would it be in the govt.s best interest to make it hard to move up the economic ladder?

  • The Hyperbole ((Very Tall))||

    If "the gov't" had interests you'd have a point. What we have is politicians with interests,thus rent-seeking is in the best interest of both pols and Big Widget. 'The Gov't' is like 'The Economy' neither exists as an abstract, it's just people being people or more accurately assholes being assholes.

  • Deep Lurker||

    Because, like far too many other taxes, the goal of the progressive income tax is not to raise revenue but to "improve" society. And for far too many progressives, the "improved" society that they desire in their hearts is a medieval one of lords and peasants. See Brochettaward's comment above about how Marx wrote so fondly about feudalism.

  • Ayn Random Variation||

    Obama admitted this when he was off the teleprompter.

  • PapayaSF||

    OT: UMass creates cultural appropriation 'threat meter' for Halloween

    The University of Massachusetts, Amherst is posting "cultural appropriation" posters in each of the residence halls on campus featuring a detailed "racism evaluation and assessment meter." The "Simple Costume Racism Evaluation and Assessment Meter" (S.C.R.E.A.M.) poses several questions to students, then assigns a threat level based on how much a costume differs from the student's own race.
  • John Titor||

    No, it's cool, it's not like your ancestors killed them or anything.

    Given the amount of people descended from Genghis Khan I don't think you want to play this game. Also, unless you have a lot of ancestors in the U.S. Army it's actually highly unlikely your ancestors killed any Amerindians. Especially if they were bloody German immigrants in the 1890s or something.

    Remember that culture is fluid

    Finally, someone gets that cultural appropriation is a moronic concept that assumes cultures are static and insular!

    Cultural appropriation can sometimes be a savior of a cultural product that had faded away.

    Goddammit.

  • Zunalter||

    Don't try to inject reason or cogent thought into this discussion, there is no place for it. All that matters is the concentration of melanin in your skin, and what category that puts you in historically. Guilt by genetics. Dr. King's dream writ large.

    Consequently, the same reason that a blue-eyed friend of mine got screamed at by some bottle blonde college co-eds at a cinco de mayo celebration for wearing a sombrero to the festivities...nevermind that he is half Mexican.

  • robc||

    Bkue eyed? He must be one of those fake spanish mexicans.

  • Juvenile Bluster||

    No, it's cool, it's not like your ancestors killed them or anything.

    Given that my ancestors didn't get here til the early 20th century and spent the first few decades thereof as poor immigrants in New York City, no. No they didn't.

  • Rhywun||

    They're just trolling us at this point, right...?

  • Ayn Random Variation||

    It's over people. There are 5 fingers, just ly back and take it.

  • Juvenile Bluster||

    OT: I'm shocked! SHOCKED I TELL YOU!

    U.S. Urged Ecuador to Act against Assange

    Quiet pressure from the U.S. government played a role in Ecuador's decision to block Wikileaks founder Julian Assange from using the internet at Ecuador's London embassy, U.S. officials told NBC News.

    "It was a bit of an eviction notice," said a senior intelligence official.

    Ecuador's government said Tuesday it had partly restricted internet access for Assange, the founder of anti-secrecy group WikiLeaks, who has lived in the South American country's London embassy for more than four years. A source familiar with the situation says the Ecuadoran government has been frustrated with Assange and his presence at the Embassy in London for months and has been considering how best to proceed.
  • Sevo||

    'Nice little country you got going there. Shame if something happened to it.'

  • Ayn Random Variation||

    This chat room has the best news feed ever.

  • __Warren__||

    Do any of you so called "commentators" have a permit to post your inane, anti-patriotic, anti-God ramblings?

  • John Titor||

    Hang the Pope!

  • EDG reppin LBC||

    What if The Pope is hung?

  • IceTrey||

    It's a terrible waste.

  • IceTrey||

    2,000 hours to be an interior designer. 800 hours to be a cop. The State has its priorities straight. /s

  • ||

    As Land-Use Rules Rise, Economic Mobility Slows, Research Says: Trend of income gap between poorest and richest states steadily closing is upended by growth in regulations

  • Bra Ket||

    So we're calling upon the president of the united states to dictate local zoning laws? Perhaps he can cite the intestate commerce clause?

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