In today’s America, the economy is growing really slowly, and there are many theories floating around as to why this is happening. While slow growth is probably due to a number of factors, over-regulation is likely a huge part of the problem.
Some claim that regulations cost the American economy in excess of $2 trillion a year. Other interest groups that aim to protect the environment, consumers and workers claim that our regulations don’t go far enough.
Make no mistake: Regulations are necessary to protect our environment and our safety. But in many ways, they’ve gone way too far, to the point that they’re choking out economic growth. There are examples of red tape making life more difficult for all of us.
Ever wondered why it’s hard to get a job? Employers have so many onerous rules put on them that it discourages hiring full-time employees. While the majority of net new private sector jobs come from small business, it’s never been harder to be in business because regulations pertaining to overtime compensation, minimum wage hikes and Obamacare have only further increased the cost of doing business. For too many business owners, the burden is just too onerous to turn a profit.
Ever wondered why your rent is so expensive? Studies show that strict land-use regulation limits the supply of housing and causes prices to rise faster.
In recent years, we’ve seen rapid increases in housing prices that have made renting or purchasing a place to call home nearly impossible for ordinary folks. Strict zoning laws that prevent building more housing are often blamed for declining affordability across the country.
If cities don’t start accommodating the growth of housing inventory, we’re going to see an all-out housing crisis in many cities all over the United States.
Ever wondered why it’s so hard to be an entrepreneur? Many states have crazy occupational licensing requirements that make it much harder to get started in fields where middle-class people find jobs, such as barbers, massage therapists and medical assistants.
Much of the red tape in this area is at the state level where boards are controlled by special interests and look to limit entry into the field they regulate. The absurdity of occupational licensing requirements in many states led the Obama administration to commission a study, which concluded that these regulations are limiting worker mobility and reducing wages.
The new Trump administration has proposed a rule that mandates two rules be repealed for every new regulation. While that idea doesn’t work neatly in practice, it’s a good guiding philosophy that’s been successfully implemented in countries such as the U.K. and Canada.
This rule would help avoid the creation of unnecessary regulations that increase the cost of doing business and crush our already tepid economic growth.
For too long, special interests have controlled our regulatory system to the detriment of American growth prospects.
We need regulations for the 21st century that protect consumers and the environment and help stimulate economic growth. Let’s make sure our regulations are doing what they’re intended to do, and not costing us our economic future.
This article was originally featured on GenFKD.org
Photo by Tax Credits
David is the Editor of Bold. He's especially passionate about millennial economic empowerment. A former local news reporter, David is originally from the Little Havana area in Miami, and later became a pioneer resident of the Disney-inspired town of Celebration, Florida. David holds a Master’s in Public Policy from the Harvard Kennedy School.
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