Category: economic opportunity

Oregon Can Help Young Oregonians Be “Future Ready” by Reducing Red Tape

By Kathryn Hickok

Governor Kate Brown opened this month’s legislative session with her State of the State speech February 5. She focused on the need for better education and workforce training for young Oregonians, so they can achieve the American Dream and raise families. To close the “skills gap” between workers and employment opportunities, she proposed a new job-training initiative called “Future Ready Oregon.” 

The governor’s vision is laudable, but what young Oregonians need most isn’t another state program. What often stands between young workers and moderate-income jobs is government red tape in the form of burdensome occupational licensing requirements and fees that can be significant barriers to entry. 

According to the Institute for Justice, “[l]icensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means….” In fact, Oregon ranks 8th in the nation in the number and expense of regulatory burdens and restricts numerous occupations licensed in few other states, such as farm labor contractors, bartenders, and locksmiths. 

Oregon could make it easier for job-seekers by reducing license and fee requirements for jobs that have little or no impact on public safety and by replacing some occupational licenses with less restrictive credentialing options. Reducing government red tape that stands between Oregonians and the jobs and training they need to climb the economic ladder would truly help young adults become “future ready.”

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Oregon Ranks 8th Worst in Regulatory Burden on Lower-Income Occupations

Oregon Ranks 8th Worst in Regulatory Burden on Lower-Income Occupations

By Kathryn Hickok

Oregon ranks 8th in the nation in “burdensome” occupational licensing laws, according to the Institute for Justice’s new report License to Work. The report examines the regulatory burden of state licenses and fees on 102 lower-income occupations. Oregon is also the “8th most broadly and onerously licensed state,” requiring licenses for occupations that most other states don’t.

According to the authors of License to Work, “more Americans than ever must get a government permission slip before they can earn an honest living….Licensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means, such as cosmetologist, auctioneer, athletic trainer and landscape contractor. Yet research provides scant evidence that licensing does what it is supposed to do—raise the quality of services and protect consumers. Instead, licensing laws often protect those who already have licenses from competition, keeping newcomers out and prices high.”

The Wall Street Journal editorial board pointed out that “stiff licensing requirements are often prohibitive for America’s working poor, keeping them trapped in low-wage, low-skill jobs.” Oregon could make it much easier for job-seekers and potential entrepreneurs to make an honest living by reducing license and fee requirements for occupations that have little to no impact on public safety, and by replacing some occupational licenses with less restrictive credentialing options.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Income

Straightforward policy reforms can reverse Oregon’s lower-than-average incomes and high cost of living

By Eric Fruits, Ph.D.

Oregon’s economy seems to be chugging along, yet many of us feel like we’re losing steam. Employment and incomes are up since last year, but when we compare Oregon with other states, things don’t look so good here.

Oregon’s median family income is about the same as the national average. But according to the Census Bureau, we are 14 percent below our northern neighbor. Oregon’s per capita personal income—another measure—is more than 8 percent lower than the national average. Oregon is not a rich state.

At the same time, according to one widely used survey, Oregon’s cost of living is about 25 percent higher than the national average and 17 percent higher than in Washington. Oregon’s Consumer Price Index has increased 20 percent since 2007, while prices nationwide only increased 16 percent. Much of this disparity is due to Oregon’s increased cost of housing. In addition, prices for food, gasoline, and health care are also higher here.

It’s expensive to live in our state. When adjusting incomes for the cost of living, Oregon goes from the middle of the pack to the bottom of the bunch. Accounting for purchasing power, Oregon’s median family income is 20 percent lower than the nation and 27 percent lower than Washington’s.

While our incomes are lower, they are more evenly distributed. By various measures, Oregon has less income inequality than most other states. Our top one percent of income earners has a smaller share of total incomes, and our poverty rate is lower than the national average.

On the one hand, our state does not have enough deep pockets to feed soak-the-rich tax policies. On the other hand, our below-average incomes mean we don’t have the resources to feed soak-the-middle-class tax policies like the health insurance and provider taxes that a “no” vote on Measure 101 in the upcoming January 23 election would repeal.

It also means we don’t have the resources to feed soak-the-poor tax policies like the carbon tax the legislature is almost certain to take up next February.

Regulations regarding paid time off, employee scheduling, and occupational licensing increase the cost of employing people without directly adding money to workers’ paychecks. The result is reduced employment and lower wages.

Oregon’s land use laws—as well as regulations regarding design review, historic preservation, and inclusionary zoning—have stifled residential development. Demand for housing is outpacing construction, driving up housing prices. The Oregon Office of Economic Analysis estimates that over the past 10 years, the Portland area has underbuilt by 27,000 units.

The application of Oregon’s land use laws has also limited commercial development. While local areas are supposed have a 20-year supply of vacant industrial land, too often much of that land is not development-ready. Modern companies operate in globally competitive markets and cannot wait for a years-long planning process. Instead of waiting, they locate and expand elsewhere, taking jobs with them.

Anyone who drives through the Portland area knows that congestion has worsened over the past few years. It affects more than just commuters. The Oregon Department of Transportation concludes that congestion is affecting freight traffic and businesses throughout the state, threatening their national and international competitiveness. Higher transportation costs result in higher prices for consumers.

With the decline in water traffic in the Port of Portland and increased railway congestion, highway traffic is a key transportation mode for freight. As highway conditions worsen, Oregon is more likely to get crossed off the list of places to do business, resulting in a loss of potential middle-income jobs.

A recent study of income and cost-of-living data between states concludes: “Cost of living is clearly impacted by state policies [such as those noted above].” Oregon can move from being a poor state to a rich state through straightforward policy reforms. These must address our high cost of living as well as our lower incomes. Reforms to speed up and expand real estate development will relieve housing price pressures and attract employers. Construction to relieve congestion will improve our competitiveness while reducing roadway accidents and alleviating commuter stress. Labor market reforms will increase employment and boost Oregonians’ paychecks.

Do these things, and Oregon can meet its promise to all of us.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor for Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Gresham Outlook and The Portland Tribune.

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Where Did President Obama Stay in Cuba?

This week, Barack Obama became the first U.S. President in nearly 90 years to visit the country of Cuba. While security concerns may have prevented him staying in a private home rented through Airbnb, he would have had some 2,700 such homes to choose from in Havana alone.

The amazing thing is that Cuba is a communist country, yet it allows short-term room rental services to operate, while some major American cities such as Atlanta, Denver, and Los Angeles do not.

While the American President likely rode through the streets of Havana in his own armored limousine, he apparently could have ridden in one of those iconic 57 Chevys if the driver had one of the still rare and expensive Cuban email accounts. Such ride-sharing services are also allowed in Havana, while Uber and Lyft are still fighting powerful taxi monopolies in some American cities.

We can have legitimate disagreements about normalizing diplomatic and economic relations with Cuba; but we should applaud the movement toward private home ownership and use, and the entrepreneurial opportunities its communist government now allows.

It will be ironic if Cuba comes into the modern free-market era at the same time that some American politicians try to impose more government restrictions on the very economic freedoms that many Cuban refugees risked their lives to achieve by coming here.

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