Federal agencies have a well-deserved reputation for issuing regulations, publishing guidance documents, and bringing enforcement actions against American businesses. But when the stars align, agencies sometimes eliminate old regulations and modernize their guidance documents.
The Federal Trade Commission (FTC) is pursuing another deregulatory approach: advocating for economic liberty at the state and local levels. The agency’s new Economic Liberty Task Force, recently announced by FTC Acting Chair Maureen Ohlhausen, is intended to tackle “regulatory hurdles to job growth.”
The FTC has its work cut out.
For starters, this task force will focus on occupational licensing rules, which have made it increasingly difficult for people to find jobs and launch businesses. As the FTC has noted, nearly three in 10 American jobs now require a license, a six-fold increase since the 1950s. This trend, which has taken place largely at the state level, has met growing criticism as an unnecessary economic burden on U.S. workers and a driver of higher prices for consumers.
One longstanding opponent of occupational licensing regimes is the Institute for Justice, which published an excellent report in 2012, “License to Work,” that documents the licensing requirements for 102 occupations across the country.
Libertarian groups aren’t the only critics of these laws—a 2015 report issued by President Obama’s White House expressed skepticism toward occupational licensing restrictions, offering lawmakers guidance about how to adopt less restrictive alternatives to licensing.
But occupational licensing is just the tip of the iceberg when it comes to barriers to economic liberty. As James Cooper of George Mason University’s Law & Economics Center explains, a panoply of laws ranging from “minimum service requirements” to auto dealer franchise laws to the “three-tier” alcohol distribution system have accumulated over the years to the detriment of consumers.
Local regulation of transportation providers like Uber and Lyft is another area where liberty is restricted, as TechFreedom President Berin Szoka observes. However, such regulations tend to benefit incumbent businesses, so they are rarely eliminated. When a law enriches narrow interests while imposing diffuse costs on consumers, the concentrated interests tend to prevail.
The FTC, a century-old federal agency staffed with some very knowledgeable economists, can help consumers by effectively advocating for fewer barriers to economic liberty. From public speeches in state capitals to legal filings to testimony before state legislatures, there are plenty of opportunities for the agency to participate in the regulatory and legislative processes, lend a prominent voice in support of reform-minded officials, and assist judges in resolving legal challenges to irrational state and local regulations.
We commend Acting Chair Ohlhausen for launching the Economic Liberty Task Force, and look forward to seeing the initiative in action.