Aug 07, 2014 | By Bethan Johnson, NETWORK Fellow
In recent years, legislation has too frequently forced people to stomach bad policies in order to gain necessary and life-altering improvements. Such can said about Representative Ryan’s proposals in the area of regulatory reform in Expanding Opportunity in America, a mixture of positive anti-poverty suggestions and unnecessary political tactics that have no place in proposals fighting poverty.
Half of the regulatory reform portion of focuses on the currently unjust burden placed on low-income workers seeking occupational licenses. Rep. Ryan highlights the arbitrary and burdensome nature of many licensing requirements—for example, he notes that Minnesota law requires more hours in the classroom for cosmetologists than lawyers.
Occupational certification often protects those already licensed and makes it particularly challenging for low-income workers to gain qualifications. The Institute for Justice explains that “hurdles are exceptionally burdensome for low-income workers” because the process of receiving an occupational license too often requires long hours and high cost, something most workers cannot always afford. By keeping requirements for a license high, license-holders protect their businesses from competition and indirectly continue the cycle of poverty.
Reforming occupational licensing is important. There has been a significant increase in the percentage of laborers in fields requiring state licenses: in the 1950s approximately 5% of workers were licensed; by the 1980s that number tripled to just under 18%; in 2014 roughly 33% of workers must be licensed.
Changing occupational licensing will significantly benefit people with low incomes and benefit our economy. One recent study shows that “licensing is associated with about 18 percent higher wages.” Also, more commonsense licensing requirements will provide more choices for consumers.
The other half of Ryan’s proposal is about “regressive reforms.”
Under the current regulatory system, federal agencies are granted the right to review and, at times, alter agency policies without congressional approval. It is this independence that Congressman Ryan objects to so strongly; it prompts him to argue that our model has bred “seemingly overzealous bureaucracy” that disproportionately harms low-income families.
It is important, however, to look at Ryan’s true intention.
First, whenever a federal agency intended to introduce or change a regulation, it would be required to conduct a three-part distributive analysis of the proposed change in order to assess its effects on low-income Americans. The first analysis would study which demographic bears the greatest cost because of the new regulation, with a particular focus on whether the proposed regulation would disproportionately burden people who are poor. This study would also be required to account for low-income people’s willingness to pay for the change. Second, the agency would need to analyze which group or groups benefit most from the proposed regulation. The final analysis would estimate number of jobs lost or created, both directly and indirectly, either above or below the median income because of the change.
Then, (in what I believe is a clear attempt to ensure a delay in presenting regulations for review) all findings must be translated into layman’s terms, as per the requirements of the Plain Writing Act.
Then the agency would submit their findings to the Office of Management and Budget’s Office of Information and Regulatory Affairs for review. If, upon inspection, a report is deemed “lacking,” it would be returned to the petitioning federal agency for additional information.
Then, if the proposed regulation were regressive, the agency would be required to conduct an additional assessment to see if enacting it would cause an “immediate risk to the public health or safety.”
Then, regardless of findings on the issue of health and safety, Ryan states that reforms with regressive effects must either be changed to mitigate these effects, or receive congressional approval. In addition to the large quantity of analysis already conducted, any regulation needing congressional approval objections must also include a document to Congress explaining why the relevant agency believes the regulation necessary.
It is only after all of these steps are completed that any vote on a change take can be considered. In comparison with all of the hoops necessary for the federal agency, the only requirement Ryan makes of Congress is that it considers the petition in “a timely fashion.” He offers no further explanation on how Congress should assess any of the information, or if the only reason for rejecting a regulation would need to be on its harmful impact on low-income households.
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