Case Study: How We Helped Create More Jobs in Nebraska
Nebraska has more jobs available than people to fill them. That can make job creation seem like an unimportant issue for the state.
But for Nebraska to grow and meet its workforce needs, it needs to offer economic opportunities for people from all walks of life and all communities.
Recent census figures show Nebraska trails many of its peers for the number of new residents it attracts from other states and countries. Nebraska also falls behind many states in the number of new business firms created.
That’s one reason we’ve worked on removing regulatory barriers to jobs, which can help more people find the opportunities they’re looking for: to become entrepreneurs if they want, and allow families to put down roots in Nebraska.
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Today, I’m going to share with you three ways the Platte Institute helps Nebraskans create more jobs, entrepreneurship opportunities, and local businesses. Here’s the topics I’ll cover:
- Review and reform Nebraska’s job licensing system.
- Increased types of businesses entrepreneurs can start in Nebraska.
- Helping workers and entrepreneurs use legislation when they can, and litigation when they must.
It’s never my goal to make people reflexively dislike or distrust regulation or taxes. Instead, I want to get people asking good questions about why we really have these policies, and the best way to accomplish their intended goal.
Certainly, we need basic rules for protecting public health and safety and preventing fraudulent business practices. But in every state, hidden among the useful rules, are also restrictions on getting a job or starting a business that can be arbitrary or unfair.
These counterproductive policies survive with the help of politicians on the left and the right for a number of reasons. Traditional business groups might fear upsetting their members who lobbied for these policies, and strong believers in regulation might think reform is an attack on all rule-making.
But what we’ve learned in Nebraska is that if we do ask the right questions about regulation, the whole state can win.
- Workers can have new and better job opportunities.
- People in urban and rural communities have new kinds of businesses they can start.
- Consumers and residents can access more services and amenities to enjoy in our state.
An added benefit is that the rules for running a business can remain more squarely focused on serving the public interest (which is what regulation is really supposed to do). To achieve these goals in Nebraska, we took action to:
#1. Review and reform Nebraska’s job licensing system.
Most people know you need a license to be a doctor or an airline pilot. But over time, licensing requirements to get a job have expanded to many more careers.
Most licensing is run by state governments, and some of the requirements vary dramatically around the country. For example, Nebraska is one of only seven states that requires a license to work as a real estate title examiner.
I’m sure there are people who lobbied for this license who believe it makes their industry better. But what are the chances that researching real estate records is any more dangerous or risky for consumers in Nebraska than it is in 43 other states?
The Federal Trade Commission, an independent agency responsible for protecting consumers, has been working to inform state governments for decades that excessive job licensing can actually,
- Harm workers,
- Harm consumers, and
- Impose anti-competitive trade practices.
This excessive licensing makes it harder for workers to enter a field and increases prices, while reducing choices and the quality of services at the same time. At the Platte Institute, we started getting involved in this issue in 2016 by looking at the barriers contained within individual licensing requirements.
One way to restore some sense to these laws is to exempt certain specializations and skill sets from licensing. The first licensing reform bill we supported used this kind of approach.
Like most states, Nebraska requires licensing for cosmetologists, who are trained in hair, nail, and skin care. Back in 2016, their training took 2,100 classroom hours, and often cost as much as $20,000.
Case Study A: Brandy McMorris, North Omaha Hair Braider Forced to Close
Our team got in touch with Brandy McMorris, who was having trouble because of this requirement. She had started a small business in North Omaha offering African-style hair braiding services. Brandy had grown up learning how to braid and was already building a list of clients.
She didn’t want to cut hair or offer any of the other services a cosmetologist normally provides. She just wanted to do braiding. In fact, none of the training offered at the local cosmetology schools at the time even covered hair braiding.
But because hair braiding was assumed by the state to be part of the scope of cosmetology, Brandy was shut down by the Department of Health and Human Services for practicing without a license.
We supported a bill exempting natural hair braiding from the state cosmetology license, which allowed Brandy to reopen. She could use the skills she already had to start a legitimate small business, without going into debt for training she wasn’t going to use.
Brandy’s story is not an isolated case. With nearly a quarter of the workforce today requiring a license to work, we’re meeting more Nebraskans all the time who are sometimes stuck waiting years—sometimes waiting forever—for the opportunity to use their skills to earn an honest living.
We knew there had to be a better way to help policymakers find more ways to improve the job licensing system.
In 2017 and 2018, with the leadership of then-Nebraska state Sen. Laura Ebke, we helped pass the Occupational Board Reform Act. The Occupational Board Reform Act requires the Legislature and state licensing boards to conduct a complete review of every licensing law the state has.
The goal is to identify where less-restrictive regulatory alternatives can be used, such as registration, private certification, or sometimes just getting rid of a license that no longer makes sense to have. The review happens in a five-year cycle. That means at least 20% of the state’s licenses are reviewed each year, and as times change, they’ll be reviewed again.
This legislation has gotten Nebraska noticed as a leader in licensing reform. The Wall Street Journal even called the Occupational Board Reform Act a model for the nation. Already, about ten percent of Nebraska’s licenses have been streamlined in some way, from making it easier for workers to sit for licensing exams, to completely eliminating licenses that are no longer necessary, in some cases.
In addition to reducing excessive licensing, in many professions, Nebraska now waives first-time licensing fees for younger workers, and applicants from low-income or military families.
But there’s still a long way to go.
Case Study B: Mike Beyer, Veteran’s Experience Doesn’t Cross State Borders
Several of our neighbors now offer universal recognition of job licensing and work experience workers bring from other states or from the military.
This would mean that someone like Mike Beyer, a U.S. Navy veteran from Bridgeport, can come home to Nebraska and use his skills in a licensed profession.
Mike completed a military apprenticeship for electricians during his eight years in the service. But upon returning to Nebraska, he was told it would take another three years in an apprenticeship to get his license.
Workforce shortages are a very real problem, not just for Nebraska businesses, but for everyday people who need access to services in their community. We simply can’t afford to be turning away skilled, qualified workers just because that’s the way things have always been done.
Having more qualified people to work, start new small businesses, and bring their families to Nebraska communities means a lot for all of us. But especially for places like Bridgeport, with a population of about 1,500.
A handful of new workers and businesses can make a noticeable economic impact.
Of course, excessive licensing is only one barrier to opportunity in Nebraska. As we became more involved in job licensing reform, more Nebraskans began to reach out to us with other concerns.
#2. Increased the types of businesses entrepreneurs can start in Nebraska
Everyone knows the COVID-19 pandemic was a terribly difficult time for small businesses, especially in food service. But did you know there was a category of food business that actually grew in Nebraska during the crisis?
I’m referring to cottage food producers. These are entrepreneurs who don’t have access to a commercial kitchen, but make shelf-stable food items at home: from baked goods, to spices, to roasted coffee. Until recently, it was illegal to sell cottage foods anywhere in Nebraska besides a farmers market.
Now, farmers markets are great, but their hours and locations are limited throughout the year. This leaves home-based and rural producers at a disadvantage while looking to grow a business.
Proposals to expand Nebraska’s cottage food law had languished in the Legislature’s Agriculture Committee for some time. But working together with a nonpartisan coalition, including farmers, nonprofits, and aspiring cottage food producers, we were able to change Nebraska’s cottage food law from one of the country’s worst, into one of the best.
Case Study C: Cindy Harper, Government Blocks Cookie Sales to Grow Business
To explain how much the law has changed, consider the story of Cindy Harper. Cindy lives in Lincoln, and has previous culinary training and experience. One of her favorite things to bake are holiday-themed sugar cookies.
As Cindy was looking to retire, she saw that a home-based cottage food business would make a lot of sense for her. She could produce themed products throughout the year, on her schedule with low overhead, while generating an additional source of income.
But under the old cottage food law, Cindy would struggle to find a farmers market where she could sell, say, Christmas-themed cookies in December. She also couldn’t take orders and deliver them to customers at a later date.
Nebraska’s expanded cottage food law offered home-based food producers like Cindy the chance to sell direct to consumers year-round. They can even take orders online and ship their products.
The best part is that unlike in some states, Nebraska’s cottage food law has absolutely no cap on how much income a producer can earn. Whether a producer is looking to start a larger business and needs a proof-of-concept, or wants to remain an independent operator, they can follow the model that meets their needs.
The rules for starting a cottage food operation in Nebraska are pretty simple. Producers need to complete a food safety course, which is now offered online at the University of Nebraska Extension for $25. They need to register with the Nebraska Department of Agriculture, and if they operate from a property that uses well water, they need to have their well water inspected.
Producers also need to tell their customers the products are not made in a commercially-inspected kitchen. Since the passage of Nebraska’s expanded cottage food law in 2019, more than 500 cottage food producers have registered with the Department of Agriculture, and so far, it’s doubled every year.
This is just one example of how regulatory reform makes it possible to create new types of businesses in communities of all sizes. Here’s another. In recent years, food trucks have taken off as an alternative to starting a brick-and-mortar restaurant.
Did you know that until recently it was illegal in Nebraska to offer many personal care services outside of a brick-and-mortar location?
If you were a massage therapist living in Paxton, Nebraska, (population 523) your business had to be based in a storefront in your town. Or, if you were a hair stylist with aging clients who could no longer drive, you didn’t really have a good way to reach them.
But by working with legislators, we’ve helped to pass laws that allow Nebraskans in hair, nail, and massage care fields to take their businesses on the road.
The timing of these changes couldn’t have been better. During the pandemic, more customers than ever were looking for a less-crowded place to get a haircut or have their nails done.
From east to west, we’ve met Nebraska entrepreneurs who are now putting their businesses on wheels, allowing them to serve a larger geographic area, and bring their services to customers who might not otherwise be able to reach them.
In Omaha, one mobile nail salon is looking to establish a franchising system, as more states join Nebraska in legalizing these mobile businesses.
Seeing these business and job opportunities come into existence feels like magic, but there’s really no mystery behind making these changes in the law.
It just takes policymakers who are willing to question the status quo and give creative and entrepreneurial people the chance to try new things. Sometimes that’s a lot easier said than done, though.
#3. Helping workers and entrepreneurs use legislation when they can, and litigation when they must
The Platte Institute generates a lot of ideas about how we might make Nebraska a better place to live and work. But if policymakers never hear from Nebraskans who stand to benefit from these ideas, then those proposals will be written off as mere theories.
That’s why we put our resources toward amplifying the voices of workers and aspiring entrepreneurs who don’t have their own lobbyist in Lincoln. Unicameral watchers might forget that many Nebraskans don’t know how a bill gets introduced, who their state senator is, or how to testify at a legislative hearing.
We work to identify Nebraskans who face obstacles because of red tape, and give them the tools to get their good ideas and amazing stories in front of legislators.
After all, it’s much more impactful for lawmakers to hear from workers and entrepreneurs in their own words, than it is for my team to try to explain a problem using only impersonal data or research.
Everybody says they want to live in a place with a strong economy, but the reality is that economic growth involves a messy process full of trial and error.
Innovation takes a measure of risk, and to a lot of officials, that can sound like bad politics. At first, making a difference for an individual worker or entrepreneur can be written off as a waste of policymakers’ time.
Yet, when laws change, lives change. The more times we return to the Unicameral with stories of Nebraskans whose lives and communities have been improved through changes in regulations, the more policymakers tend to become entrepreneurial in their work, too.
Officials start to see they can be part of helping to create opportunities no one would have ever imagined in Nebraska before them, and that there’s actually very little political downside to scrutinizing regulations, and finding more ways for honest people to find better jobs and start more businesses.
Sometimes, though, the legislative process fails people and a legal remedy becomes necessary. Naturally, people are skeptical of lawsuits, but just because a law or regulation exists doesn’t mean it would stand up in court. That’s why we have three branches of government.
There are great legal defense organizations out there that take cases for people who are having their economic freedoms violated, and many have a strong winning record.
Earlier I mentioned Cindy, the home baker. Although the Legislature did a great job enabling her to start a cottage food business, initially, the City of Lincoln did the opposite.
After the new cottage food law passed, the City of Lincoln decided to impose its own cottage food ordinance, going beyond what the state required. This forced businesses like Cindy’s to close while the city drew up their additional regulations.
Of course, Cindy was disappointed about her business being temporarily shut down, but it also seemed like Lincoln was acting in opposition to the Legislature’s intent.
With the help of the public interest law firm the Institute for Justice, Cindy filed suit against the City of Lincoln, claiming their ordinance was in violation of the state’s new cottage food law and Nebraska’s constitution.
A Lancaster County District judge received arguments from both sides. While rendering no final decision, the court allowed the lawsuit to continue, stating that there seemed to be tension between the city’s new rules and the state law that had already passed.
After looking at their legal options, the City of Lincoln agreed to a less-restrictive ordinance that closely mirrored the state’s new cottage food law, making Lincoln just as good of a place to run a cottage food operation as anywhere else in Nebraska.
Case Study C: Marc Nda, Competitors Veto His Entrance to the Market
Another case we’re watching closely at the Platte Institute is a current constitutional challenge of Nebraska’s law related to competition for non-emergency medical transportation.
In that case, an Omaha and Lincoln-based entrepreneur named Marc Nda wanted to expand his home care business by offering transportation services to his clients.
But under Nebraska’s current law, existing transportation businesses can protest and prevent the entry of new service providers in the marketplace.
While the Legislature took some action to rein in this competitor’s veto for in-state moving companies, the rules applying to businesses like Marc’s were conspicuously left unchanged.
In many states, anti-competitive laws like this have been struck down as unconstitutional, and this same question is now being asked in Nebraska under a pending case Marc has brought forward.
By the way, you can find out more about Marc’s story and Nebraska’s Competitor’s Veto law here.
It would always be better if we had policymakers solve these problems before they get to the courts. But I’m grateful we have another legal means of giving Nebraskans their economic freedom back when it’s being wrongfully taken from them.
These are just a few ways that the Platte Institute has helped to create more economic opportunities in recent years. To recap, our research and advocacy programs work together to:
- Review and reform Nebraska’s job licensing system.
- Increase the types of businesses entrepreneurs can start in Nebraska.
- Help workers and entrepreneurs use legislation when they can, and litigation when they must.
This is just the beginning of our efforts. As times and technologies change, there will be even more ways we can help make Nebraska the best place in the world to get a good job or to start a new business.
As always, I’d welcome your thoughts on the obstacles and opportunities you see for growing Nebraska.
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It’s time to stop the status quo. Let’s remove economic barriers and make Nebraskans proud.