Report: Regulatory burdens reduced Nebraska jobs and businesses
While some regulation will always be necessary, Nebraska needs to make sure its regulations are not unintentionally inhibiting economic prosperity or harming the potential to create jobs and allow businesses to expand.
As of August of 2020, the Mercatus Center at George Mason University had inventoried 44 states’ regulatory restrictions. Compared with the 43 other states, Nebraska ranks 29th in terms of regulatory burden (California the highest at 1, and Idaho the lowest at 44). In the Platte Institute’s 2021 Legislative Issue Guide, we point out how Nebraska ranks third highest of eight states regionally in terms of regulatory restrictions per capita.
A new research brief published by the Mercatus Center examines the growth of Nebraska’s federal regulatory burden from 1997 to 2015 and discusses how greater regulatory burdens are associated with increases in poverty rates, higher levels of income inequality, reduced entrepreneurship, and increased consumer prices.
Nebraska’s regulatory burden increased between 1997 to 2015 and is associated with an increase in the number of people living in poverty by 34,232 (205,393 after vs. 171,161 before). Nebraska is significantly impacted by federal regulations. The state saw an 80% increase in federal regulations and this increase was associated with a 20% increase in poverty. 34,232 more Nebraskans living in poverty is nearly equal to the population of Scotts Bluff County.
To add insult to injury, regulations tend to increase consumer prices, and those in poorer households spend an increased proportion of their income on goods that are highly regulated.
Entrepreneurship is not immune from the burdens of regulation, either. In 2017, Nebraska had 42,129 small firms employing 412,587 workers. From 1999 to 2015, federal regulations imposed increased by an average of 3.78% per year. According to Mercatus, if federal regulations uniformly increase by 3.78 percent, this translates to Nebraska losing about 67 small firms and 853 jobs annually. That represents more than 1,000 businesses with enough employment to hire almost every person living in La Vista.
While our state cannot control federal regulations all on its own, we can work to minimize regulations imposed by the state and not add to these opportunity costs. As policymakers embark on a new legislative session, it will be important to look for ways to repeal and reform harmful and unnecessary regulations.