By former USDA Secretary John R. Block
We hear a lot of talk about the economy. It’s not growing as fast as it should. Two percent growth is just too slow. It has taken forever to recover from the 2008 recession. There are a lot of opinions about why growth has been slow. I think one serious obstacle is that not only the federal government, but also the states, have more regulations and require small business licensing.
In 1950, only 5% of workers had to be licensed. Today, that number is 30%. Depending on the state and city, you might be required to get a license to be a manicurist, a beekeeper, a librarian, a barber, a fortune teller. Farmers, in some states, have to go to class to get cleared to spread manure. They are not allowed to spray weed killer on their corn fields without getting a license.
Of course, consumer protection is important. We want our workers to be safe. However, could it be that the tendency for government to regulate and control everything puts our economy in a straight jacket?
The U.S. Small Business Administration tells us that the per employee cost of federal regulatory compliance is $10,585 for businesses with fewer than 19 employees. The cost is $7,755 per employee for companies with 500 employees. The cost that you see here is just federal cost. What about all the state and local costs?
Government overreach makes it hard for small businesses to get started. Sixty occupations are regulated in some way in 50 states. We are to the point now that some companies support licensing because it keeps out competitors. I thought this was interesting. Thanks to the Texas Supreme Court, they ruled that “licensing of eyebrow-threading is useless.”
In closing, let me report that with the clock ticking on Vermont’s GMO labeling law – which is scheduled to go into effect July 1. The Senate has not been able to find the 60 votes to pass a nationwide mandatory policy. They need to get it done.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, visit johnblockreports.com.