7 December 2015

Consensus blooms around intractable troubles


As presidential campaigning heats up, we are hearing less and less about areas of common ground between those on the political right and the political left. It is especially important therefore to mark the areas where the trend is moving in a more cooperative direction.

Zoning is an area where more and more economic and public policy analysts are reaching consensus about the harm of burdensome rules distorting the market. As Ilya Somin explains at the Volokh Conspiracy:

In recent years, and especially over the last few months, economists and other public policy experts across the political spectrum have come to realize that zoning rules are a major obstacle to affordable housing and economic opportunity for the poor and lower middle class. By artificially restricting new construction, zoning and other similar land-use restrictions greatly increase the price of housing, and prevents the market from adjusting to increasing demand.

Economist Morris Kleiner, a professor at the University of Minnesota, is the godfather of the growing consensus around the harm from occupational licenses. He’s found that the growth of such licensing rules increases wages by 15 percent in those fields and may slow growth of jobs. “With licensing, you’re creating a monopoly, and it’s very difficult for people in many places to enter these occupations,” Kleiner told the Washington Post. “And it’s keeping people away from the American dream.” Kleiner worries that licensure also hurts workers’ ability to move because licensing requirements differ from state to state.

Since Kleiner started beating this drum, and along with advocacy organizations like the Institute for Justice, which has successfully fought for limiting licensing in some states and cities, the left is getting with the program as well.

The Obama administration has come out against burdensome licensing requirements, with the Council of Economic Advisers issuing a report that sounds almost like it came out of some limited-government, pro-liberty think tank:

Over the past several decades, the share of U.S. workers holding an occupational license has grown sharply. When designed and implemented carefully, licensing can offer important health and safety protections to consumers, as well as benefits to workers. However, the current licensing regime in the United States also creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines. Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing.

Finally, family structure and specifically marriage, researchers have found are a cure for poverty and boost for economic mobility. On the right there is the terrific work by AEI researchers Bradford Wilcox and Robert Lerman proving that family structure matters for economic growth. The two, “showed that the decline in traditional two-parent married families is associated with rising income inequality, lower median incomes and lower labor force participation rates.”

Looking at data from 1980 to 2012, they found that among married parent families, the median family income rose 30 percent, while for unmarried parents, family incomes rose only 14 percent over the same period. In addition, their work also suggested that this retreat from marriage is correlated with lower labor force participation rates for men.

Then there is the joint research out of Princeton University and the liberal Brookings Institution. As Sara McLanahan and Isabel Sawhill note in the Future of Children, “most scholars now agree that children raised by two biological parents in a stable marriage do better than children in other family forms across a wide variety of outcomes.”

Once we pay proper attention and celebrate all this agreement, we have to face the stubborn fact that while these problems are obviously complex and harmful, figuring out top-down, one-size-fits-all policy solutions will be hard to nonexistent. As Somin concluded in regards to zoning, “This emerging consensus is a good sign, though it may be difficult to translate it into effective policy initiatives.”

Abby W. Schachter is editor of CapX America.