While many in the political arena are focused on national elections, we can’t forget how local issues also effect the socioeconomic fabric of local communities. As The Defending The American Dream Summit hosted by Americans for Prosperity begins, one of the sessions focused solely on this issue concerning state policy and how it drives economic growth. Spoiler Alert: low taxes, labor union reform, and smaller government often lead to more economic growth.
Jonathan Williams, Tax and Fiscal Policy Task Force Director for the American Legislative Exchange Council who also co-authors ALEC’s Rich States, Poor States report, detailed how simplicity, transparency, neutrality, and predicability are key areas to look over when assessing a tax code. He also detailed the dynamics of the Laffer Curve, which often irks the political left.
However, weather also effects a state’s economic vigor. Hawaii and California, states considered to be paradise, have lost scores of citizens in the last ten years. Hawaii has lost population in eight of the last ten years. California has lost over 1.5 million residents over the past decade. Proof that taxpayers vote with their feet. Hence the reason why Florida, Texas, Arizona, North Carolina, Georgia, states with low taxes and responsible government, have had the highest rates of in-migration over the past ten years. While states with (surprise!) high levels of taxation and government spending, New York, California, Illinois, and New Jersey, are on the top of the out-migration list.
Overall, over the past ten years Ohio, New York, Hawaii, New Jersey, Vermont, California, and Oregon have grown their economies 42.06%, their population has grown 5.36%, and their job growth is an abysmal -1.68%. Furthermore, total tax receipt growth in those states accounted for a meager 44.80%. While Alaska, Florida, Nevada, New Hampshire, Tennessee, Wyoming, and South Dakota collectively experienced a 58.54% gross state product growth, a 13% increase in population, total tax receipt growth of 81.53% and job growth of way over 5% over the past ten years. What a shocker…for liberals.
James Sherk, Senior Policy Analyst in Labor Economics for the Heritage Foundation, reiterated how labor reforms are essential to loosening markets and increasing economic activity. After all, when you don’t have constraining hiring and firing provisions in a contract with a union, you might have more options as an employer. As we conservatives know, a union is a legal cartel. An unsustainable economic model that crumbles once competition is injected into it. Hence, the reason why merit pay for teachers is so viciously opposed.
Teachers have been pushed front and center in this fight against public sector unions. Sadly, the most qualified and efficient teachers, the good ones, are the first to go when a budget crunch occurs and the worst of the bunch with seniority are saved. Is that efficient?
This whole fight over collective bargaining is one fraught with liberal confusion. An aspect that isn’t all that surprising, but this shift towards collective bargaining as a human right is patently false. Federal employees aren’t allowed to collectively bargain and the AFL-CIO’s first president, George Meany, is quoted as saying in 1955″ it is impossible to bargain collectively with the government.” Why? Because “government collective bargaining means voters do not have the final say on public policy. Instead their elected representatives must negotiate spending and policy decisions with unions. That is not exactly democratic – a fact that unions once recognize.”
Another thing that needs to recognized is that a staggering 35% of all jobs require a license. Sherk said that in forty-nine states you need documentation to be a barber or a preschool teacher. In thirteen states, you need a license to be a bartender. In Maryland, such a document is required to be a fortune teller. Lastly, three states require papers to operate as an interior designer. With unemployment rising, people do not have the time or the money to go through years of training to learn a trade that shares little correlation with safety and the ability to perform the job. It’s out of control.
Sherk reports that the lobbying arm of these professions are directly reposinsible for keeping 35% of all U.S. jobs in license limbo. It’s hurting the poor and folks with a low-skill set. Does it really take a year for one to be an efficient barber? No. If he/she cuts hair poorly, the market will remedy that defect.
On a positive note, we don’t need federal ordinances to reform the system. States are fully capable of fixing this problem.