Here’s a modest proposal for the Texas Legislature: In the coming legislative session, try to end with the same number — or even fewer laws — than you began with. Repeal some regulations, loosen some licensing requirements.
Here’s why that matters. Texas has the highest level of “economic freedom,” according to a new study by the Canada-based Fraser Institute.
“The link between economic freedom and prosperity is clear — states that support low taxation, limited government and flexible labor markets see greater economic growth while states with lower levels of economic freedom see lower living standards and less economic opportunity,” says study co-author Fred McMahon.
And Texas ranks high on the economic freedom index, the study found.
“In Texas and South Dakota, high levels of economic freedom help create prosperity and economic growth for working families,” it reports. “The freest economies operate with minimal government interference, relying on personal choice and markets to decide what’s produced, how it’s produced and how much is produced. As government imposes restrictions on these choices, there’s less economic freedom.”
One way state government interferes with ordinary Texans’ pursuit of making a living is by onerous occupational licensing requirements. In his campaign for governor, Greg Abbott pledged to review licensing requirements and ease the burden on Texans.
There are currently 150 business activities that currently require a state-issued license before they can be legally performed in Texas, according to Abbott.
“Some of these are necessary for the health and safety of our citizens, like licensing medical doctors,” his platform read. “But many are unnecessary or overly burdensome. For example, why do we require a license to be an interior designer? Or a salvage vehicle dealer? Or a shampoo apprentice?”
In fact, occupational licensing acts as a barrier to employment and entrepreneurship, according to a 2012 study by the Institute for Justice, a Washington policy group.
“An occupational license is, put simply, government permission to work in a particular field,” the study says. “To earn the license, an aspiring worker must clear various hurdles, such as earning a certain amount of education or training or passing an exam. In the 1950s, only one in 20 U.S. workers needed the government’s permission to pursue their chosen occupation. Today, that figure stands at almost one in three.”
In Texas, 32 low-income occupations require licenses; they average 326 days of required education and experience, and an annual cost of $304.
Other regulations can be eased, which would benefit Texans. For example, nurse practitioners could be allowed to do more. Not only would this help nurse practitioners, it would help with a looming doctor shortage that Texas — like everywhere in the U.S. — is facing in the near future.
Lawmakers can do much in the coming session by doing as little as possible, in the way of making new laws and new regulations. That would be a start.
But repealing existing regulations and licensing requirements would be even better.
Economic freedom comes from government getting out of the way. That should be the Legislature’s real goal for 2015.