After the controversial firing of Erika McEntarfer, who served as commissioner at the Bureau of Labor Statistics, the release of the August jobs report was hotly anticipated. With that data now in hand, it certainly seems like the commissioner was not the reason for the weak labor market. The report brought even more bad news than expected.
Behind the headline-grabbing increase in the unemployment rate to 4.3 percent, what’s most troubling is a longer-term trend of declining labor force participation. There are almost 3 million fewer people actively seeking employment than there were this time last year; this translated into both a lower labor force participation and lower employment-population ratio.
Federal policy is a mixed bag. High tariffs — and even worse, the uncertainty surrounding the policy — are certainly not helping the U.S. labor market. On the positive side, efforts to cut unnecessary regulation represent a welcome change that helps to buffer some of the declines.
Despite the mostly gloomy news nationally, there are many states that stand out with healthier labor markets. South Dakota’s unemployment rate is less than half the national average, at 1.9 percent. North Dakota, Vermont, Hawaii and Montana are also below 3 percent.
Each of these five states is unique, but one characteristic that they share is that they fall in the bottom half of occupational licensing burdens nationally, according to the Archbridge Institute’s State Occupational Licensing Index report, which I co-authored.
Occupational licensing makes it illegal to begin working in a profession before meeting state-mandated requirements like minimum levels of education and training, passing exams, and paying fees to the state. Americans may want our doctors and dentists to be licensed, but we find that there are at least 28 occupations that are licensed in as few as five states. Lactation consultants, interior designers and dance therapists are just three examples of professionals that most states don’t license.
Why might less burdensome occupational licensing be associated with a stronger labor market? Economic research has documented that tough occupational licensing reduces labor supply by as much as 27 percent.
Intuitively, it makes sense that there should be such a connection. If the state creates arbitrary barriers for individuals to begin working, fewer people are going to work. At the very least, individuals will not reach their true potential and might find themselves underemployed.
Continue reading at The Hill.
Edward Timmons, PhD, is a senior fellow at the Archbridge Institute. He formerly served as founding director of the Knee Regulatory Research Center at West Virginia University. He is regularly asked to provide expert testimony in state legislatures across the U.S. on occupational licensing reform and the practice authority of nurse practitioners. His work is heavily cited by the popular press, and he has authored numerous articles for media publications.
Economics of Flourishing
After the controversial firing of Erika McEntarfer, who served as commissioner at the Bureau of Labor Statistics, the release of the August jobs report was hotly anticipated. With that data now in hand, it certainly seems like the commissioner was not the reason for the weak labor market. The report brought even more bad news than expected.
Behind the headline-grabbing increase in the unemployment rate to 4.3 percent, what’s most troubling is a longer-term trend of declining labor force participation. There are almost 3 million fewer people actively seeking employment than there were this time last year; this translated into both a lower labor force participation and lower employment-population ratio.
Federal policy is a mixed bag. High tariffs — and even worse, the uncertainty surrounding the policy — are certainly not helping the U.S. labor market. On the positive side, efforts to cut unnecessary regulation represent a welcome change that helps to buffer some of the declines.
Despite the mostly gloomy news nationally, there are many states that stand out with healthier labor markets. South Dakota’s unemployment rate is less than half the national average, at 1.9 percent. North Dakota, Vermont, Hawaii and Montana are also below 3 percent.
Each of these five states is unique, but one characteristic that they share is that they fall in the bottom half of occupational licensing burdens nationally, according to the Archbridge Institute’s State Occupational Licensing Index report, which I co-authored.
Occupational licensing makes it illegal to begin working in a profession before meeting state-mandated requirements like minimum levels of education and training, passing exams, and paying fees to the state. Americans may want our doctors and dentists to be licensed, but we find that there are at least 28 occupations that are licensed in as few as five states. Lactation consultants, interior designers and dance therapists are just three examples of professionals that most states don’t license.
Why might less burdensome occupational licensing be associated with a stronger labor market? Economic research has documented that tough occupational licensing reduces labor supply by as much as 27 percent.
Intuitively, it makes sense that there should be such a connection. If the state creates arbitrary barriers for individuals to begin working, fewer people are going to work. At the very least, individuals will not reach their true potential and might find themselves underemployed.
Continue reading at The Hill.
Edward Timmons
Edward Timmons, PhD, is a senior fellow at the Archbridge Institute. He formerly served as founding director of the Knee Regulatory Research Center at West Virginia University. He is regularly asked to provide expert testimony in state legislatures across the U.S. on occupational licensing reform and the practice authority of nurse practitioners. His work is heavily cited by the popular press, and he has authored numerous articles for media publications.
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