February 2015 Brief: Volume 22, Number 6
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Indiana Means Business!
by Nicholas W. Rhoad,
The regulatory environment in this country continues to creep into more and more corners of our lives. The rule of law has become so massive and cumbersome that younger generations are disenfranchised with the idea of starting a business because it seems to be out of their reach. Student debt is at an all-time high. While the economy is finally making real progress, too many graduates and young professionals face limited job prospects upon entering the workforce. In addition to all of this, increased government spending and political gridlock has resulted in the national debt continuing to climb, threatening the financial sovereignty of our nation.
Economist Ludwig von Mises believed that we would all be better served with less government intrusion, stating:
As the Executive Director of the Indiana Professional Licensing Agency (IPLA), our agency is a key step in a professional’s quest to practice a trade or a business owner’s goal to offer a good or service in the marketplace. We are at the epicenter of government regulation as almost a half million Hoosiers have to be licensed and/or permitted by our agency to go to work every day. On top of this staggering number, the IPLA doesn’t even oversee every profession that requires licensing. Including other government agencies that license teachers, lawyers, insurance agents and many more, one in four Hoosiers must be licensed to work in our state.
Other states are much worse.
In a national study titled License to Work, the Institute for Justice reviewed the licensing regimes in every state with Louisiana, Arizona, and California having the worse regulatory environments. Louisiana regulates and requires almost twice as many professions to be licensed as Indiana. Holistically, the study found that about one in three Americans have to be licensed today to have their job. In 1950, this number was one in twenty.
These numbers should be seen with great concern by the public as they are the ones who are impacted by the negative economic principles in action. The schooling and fees required for individuals to be licensed increase the costs of the service for consumers by an estimated 15 percent. This is especially detrimental to people who live in less populated areas and/or are poor. With 22 percent of Indiana’s population living in rural areas and another 15 percent living in poverty, this constitutes about 2.4 million Hoosiers. Additionally, the supply of incoming practitioners is being restricted and reduced because of the barriers to entry, namely surrounding the costs of education and continuing education, which can be in the tens of thousands of dollars to complete.
Sadly, those trades most in need of an open marketplace, like cosmetology or hair braiding, are being shut out by government protectionism.
At the IPLA, our focus is customer service and working with the Legislature to limit the regulatory burden placed on Hoosier licensees and consumers. Every dollar not spent on regulatory paperwork is a dollar businesses can spend putting people to work. While we are tasked by the Legislature with carrying out its mandates to license certain professionals and industries, I continue to remind our staff that “I mean business!” when tasking them to help those we serve. Businesses, across all sectors, have shown strong gains in Indiana as we continue to make our state the most attractive place for development and growth. Business not only puts a paycheck in our pockets, but it creates important products and services that keep our cities and towns moving forward.
Successful businesses mean more jobs; more jobs mean more workers; and more workers mean more paychecks. This is how families and communities can thrive, and our work at the IPLA is centered on making sure Hoosiers are equipped for the workforce with the license they need to practice. But regulations, while sometimes protecting the public good, can also increase costs and stifle business growth. For this reason, Governor Mike Pence instituted an agency-wide regulatory moratorium on his first day in office, which resulted in 55 percent fewer new rules in 2013 as compared to 2012 and 36 percent fewer in 2014 than in 2013.
We have cut red tape and reduced barriers for licensees over the past few years, but we can do more and are determined to make real progress in this regard. We are working to make sure there is a proper balance between public safety and a free market. Being efficient with tax dollars and offering a high level of customer service is our mission as we do our part to make Indiana the state that works.
Let’s work to keep the economy on an upward trajectory by limiting the government’s role in the workplace. Cutting red tape, allowing for free market competition, and looking at ways to deregulate the myriad of professions currently requiring licensure would better serve consumers, practitioners, and employers. Together, I know that we can make Indiana an even better place to live and work.
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