Saturday, August 8, 2015

Blind squirrel finds acorn

Every so often, we're surprised to find--in this case from commenter Scott Freelander at The Money Illusion--that even the Obama Council of Economic Advisers can stumble on an economic truth. As they did with this report on the high costs to the country of occupational licensing laws;
Research shows that by imposing additional requirements on people seeking to enter licensed professions, licensing can reduce total employment in the licensed professions.

.... Licensing laws also lead to higher prices for goods and services, with research showing effects on prices of between 3 and 16 percent. Moreover, in a number of other studies licensing did not increase the quality of goods and services, suggesting that consumers are sometimes paying higher prices without getting improved goods or services.
Not only that, but the laws are often racist in that they keep Mexicans, Blacks and other minorities from using their full talents to earn a market wage. The CEA states the obvious;
In order for the economy to successfully continue to innovate and grow, we must ensure that we are able to take full advantage of all of America's talented labor. By one estimate, licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars. The stakes involved are high, and to help our economy grow to its full potential we need to create a 21st century regulatory system--one that protects public health and welfare while promoting economic growth, innovation, competition, and job creation.
Tell us about it. While we applaud that the CEA has finally gotten around to reading Capitalism and Freedom (1962), there's also a section of that book that details the harm to many of the same people from legal minimum wages. We eagerly await when this CEA's right hands meets its leftish ones.

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