Upward Mobility Barriers
Let's pretend that we have the political guts to expand economic opportunities for people at the lower end of the economic spectrum. What vested interests should be attacked, and what economic regulations should be targeted for elimination?
It doesn't take a lot of money to become a taxi owner-operator and earn more than $40,000 a year. One needs a car, an insurance policy and ancillary interior equipment to make a car a taxi. In New York City, to be a taxi owner you'd have to purchase a license -- called a medallion -- that in June 2012 cost $704,000. New York's Taxi and Limousine Commission restrictions that generate such a license price outlaw taxi ownership by people who don't have access to a $704,000 loan. By contrast, in Washington, D.C., the annual fee for a license to own a taxi is $125. I'll let you guess which city has more taxis per capita, cheaper fares and more black taxi ownership.
For decades, the Institute for Justice has been successfully bringing suit against egregious taxi regulations. Last year, it filed suit, Ghaleb Ibrahim v. City of Milwaukee. In Milwaukee, a taxi license costs $150,000. The suit will be argued before the Milwaukee County Circuit Court in December 2012.
Taxi regulations such as those in New York, Milwaukee, Chicago, Boston and other cities just didn't happen. There are vested interests who benefit from keeping outsiders out and therefore enrich both companies with large fleets and single taxi owners at the expense of would-be owners and the riding public through higher prices.
Suppose you are affiliated with a poor congregation and wish to sell them caskets as did the Rev. Nathaniel Craigmiles. Casket retailers neither perform funerals nor handle dead bodies, but the state of Tennessee required anyone selling caskets to be a licensed funeral director, which takes years of costly training, including learning how to embalm. The Institute for Justice brought suit, Craigmiles v. Giles, and successfully got the law repealed. The institute has attacked and is attacking similar regulations in other states.
What kind of money does it take to get into the business of African-style hair braiding? The main inputs are the skills and a place in which to braid. However, in some states -- such as Utah, Minnesota, Mississippi, Ohio and California -- a person had to spend thousands of dollars in tuition and anywhere from 1,500 to 2,000 hours at a cosmetology school to obtain a beautician's license. Safety is not an issue, because African-style braiders do not use chemicals, shave or give facials. Most of what's in cosmetology school curricula is irrelevant to hair braiding. As a result of Institute for Justice lawsuits on behalf of hair braiders, a number of restrictive state licensing laws have been struck down or repealed by state legislators under the threat of suits. Nonetheless, hair braiding restrictions remain in some states.
As I have documented in my recent book "Race and Economics" (2012), historically, occupational licensing and economic regulation have been used to keep blacks out of particular trades. For example, the Plumbers, Gas and Steam Fitters Official Journal, in January 1905, wrote, "There are about 10 Negro skate plumbers working around here (Danville, Va.), doing quite a lot of jobbing and repairing, but owing to the fact of not having an examination board (licensing agency) it is impossible to stop them, hence the anxiety of the men here to organize." Black scholars Lorenzo Greene and Carter G. Woodson said, "A favorite method of barring (Negroes) from plumbing and electrical work was to install a system of unfair examinations which were conducted by whites."
Today we don't hear racist intentions for restrictive economic regulations and licensure laws, but the intentions behind those laws do not change their effects. Their effects are to prevent people with meager means and little political clout from getting a foothold on the bottom rungs of the economic ladder. Politically, it's preferable to give handouts than attack these and many other vested interests.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2012 CREATORS.COM


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13 Comments | Post Comment
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Amazing! Williams finally going straight and admitting the scales are tipped in favor of the wealthy and connected and against those on the lower rungs who are trying to help themselves or start up a business.
Or put another way, the wealthy in America have managed to keep the wealth to themselves and their kind and the Democrats, unable to prevent or stop this discrimination did provide a safety net or two...which the Republicans call an 'entitlement' and plan to quickly dismantle all the safety nets of the poor and downtrodden while reinforcing them for the wealthy.
Happy Labor Day to all the laborers and those who care for and help those whose labor is no longer needed or viable.
Comment: #1
Posted by: morgan
Mon Sep 3, 2012 10:15 AM
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Morgan - equally amazing is how you ignored - intentionally or unitnentionally - the point of Williams' article: restrictive economic regulations deny the poor and powerless access to the bottom rungs of the economic ladder. Those who benefit from restrictive economic regulations support politicians who support the regulations. Those who are hurt by the regulations support politicians who support programs that provide a safety net for those who are hurt. In many cases the same politicians support the regulations and the safety net.
Williams' solution to the problem is quite simple: repeal the restrictive economic regulations and the those hurt by the regulations will no longer need a safety net because they will have access to the bottom rungs of the economic ladder. This solution benefits almost everyone: the poor and powerless have a chance; increased competition results in better and more abudant sercices at lower costs; taxes are lower because there is no longer the need to admisiter the regulations or provide the safety net. The only people who do not benefit are those who were conspiring to rig the system: those who were protected by the regulations and the politicians.
Morgan, wake up and see that the democrats are using you to maintain their power; a life with minimal government involvement where you are free to make your own choices is the only life worth living.
Comment: #2
Posted by: Joe Slowinski
Tue Sep 4, 2012 4:53 AM
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Re: Joe,
I'm sure you'd like me to believe your spin. While I'm neither Republican or Democrat, I am carrying Obama's banner again this year so I will respond.
We are talking two different things here. First, re: Williams taxi expose, what is not mentioned is the governing New York body that first approved and implemented those restrictive regulations. Need I say....Republican. New York was a complete Republican ticket and it is they who drafted the restrictions and taxi regulations.
I'll remind you that the economic restrictions in place today are not in place to make a buck or to keep competition out of the market place or to feather some politicians nest.
The restrictions put in place by President Obama are in place to ensure what happened to us and Europe in 2007, when our economy collapsed under Bush/Cheney/Republican policies, never happens again.
These "restrictive regulations" to which you refer, are restrictive only to the businesses that helped collapse our economy, ie hedge fund operators, mortgage brokers and the housing bubble, the "shadow banking system" , investment bankers and insurance companies without enough capital to back their 'deals', Wall Street run amok.
When the "restrictive regulations" were removed..in '99 is when they really ran amok.
Today's regulations are in place to protect all people.... not a specific business or group of businesses.... and to ensure they no longer have the power to topple the US and global economies.
And keep in mind, the politicians who implemented the regulations Williams is citing, which ensured they would lock up the taxi and limo service from the little guy, were Republicans. Not only did New York vote a straight Republican ticket that year, but the POTUS was also a Republican.
No sale, Joe. You're going to have to ride the merry go round alone.
Comment: #3
Posted by: morgan
Tue Sep 4, 2012 9:13 AM
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Morgan I find it hard to believe you're not a democrat. You've taken their side in every single comment I've seen you post. You've indeed taken a non-partisian observation and completly turned it into a polerizing issue and placed the blame at the republicans. I'm not saying you're wrong, I'm saying lets fix the problem instead of placing blame. There are lots of restrictions that Walter points out that hurt minorities and the poor. They are in place because rich lobbiests have influence over an overbearing government. There are no lobbiests for the poor. There is no money in doing things in the poors best interest. If you think thats what Obama does, then he's got you programmed real well. Thats the way government works. So lets shrink its ever-expanding influence.
Comment: #4
Posted by: Chris McCoy
Tue Sep 4, 2012 9:34 AM
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A lecture coming from Chris McCoy?? Telling me how government works?
Now if Sweeney wrote that to me, I'd stop, look, and listen.
LOL...I've read your comments Chris, with your snippets of false info and your snipes against Obama.
Then you say let's fix the problem instead of placing blame. Really?
Until everyone, especially those who benefit from the "problems", agree there is a problem,it won't get fixed.
The problems Walter cites have been in place more than forty years, but because Obama, a Democrat, is in office, now you want him to fix not only problems that have occured on his 3 1/2 year watch, you also blame him and expect him to fix problems that didn't seem to be a problem under 28 years of Republican Presidents and 12 years of Democratic Presidents.
44 years we've had the very same problems with lobbiests and politicians being bought and sold and the poor getting crumbs from the table with but one difference. The seven Presidents that came before Obama weren't expected to fix all the problems or fix everything on their watch, or to walk on water. The regulations Williams is referencing were put in place in 70 -71.
Damn, there I go again, providing easily verifiable facts.
Seems a concensus that our first black President should walk on water and stop being so uppity expecting the same considerations given to the seven white Presidents Republican and Democrat who preceded him when these regulations were written.
As for lobbiests, I've spent all these weeks on Creators pointing out the hypocricy and pandering of
Republicans to the two biggest and most influential lobbiests of our time, Grover Norquist and the NRA.
Chris, you support the NRA, so what are we talking about? Lobbiests are ok if they lobby politicians to vote your way?
As I said earlier, the restrictions that Walter points out were put in place by his party of choice. They remain in place because neither party in forty years has seen fit to change them but now, when the middle class can't get the credit to go in business for themselves due to the banking industries f*ck up, now it's a problem. You see, it's not really about the poor having upward mobility. We've always had poor and if that's the concern they would have fixed it a long time ago.
No, it's about the not so poor no longer having access to easy credit. Who is to blame for that? The banking system. And what do we want to do about it? Remove the regulations we just put in place to prevent them from doing it again.
Dumb!
You don't remove the regulations, you lower the prices. It's not rocket science.
Just FYI, Sweeney, Masako, and myself are, for the most part, the only regular posters here that don't write canned, regurgitated nonsense. We write our own conclusions and opinions citing bipartisan historical and verifiable information. The fact the information is usually damning for the Republican party doesn't say anything about the messenger or the messengers politics. It provides historical data from non biased non partisan sources indicating that the Republican party has caused the most damage to this country from Nixon till now and it seems they are hoping to continue their wayward ways.
I have no intention of supporting shrinking government while allowing Republican policy to take away all the advances made for women's rights, and the rights of minorities of all races and nationalities while they lead us into more warfare and ridiculous posturing and policing of the world. We can't afford it and few of us are willing to die anymore to support our country interfering in the business of the world strictly so the obscenely rich can grow their businesses and employ people in yet another country that is not America. I'm all for pulling out of countries with neverending tribal and religious wars.
We need bigger government more representative of the people, but in this arena, Sweeney is far more erudite. You can reference any of Sweeney's writings regarding government and politicians and that is why I am such a Sweeney supporter. I am in full agreement with his well researched info and his remarkably accurate conclusions.
Programming? I don't think so. Just a trip down the old timeline letting history speak for itself. I wish I was programmed or did drink Kool Aid (if it counts, we once had a renter who survived Jonesville). Seems those who parrot whatever the last thing was that they heard are much more carefree. They've got their little bit of information and are satisfied with it and not curious enough to check it for authenticity. Alas and alack, that ain't me.
Comment: #5
Posted by: morgan
Tue Sep 4, 2012 12:50 PM
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There are certainly enough people out there who think Obama walks on water. They refuse to accept that he's ever done anything bad or that his policies don't work. You're just saying the same old dividing non-sense, only longer, like Sweeny. I want people to work together and solve these problems. I don't care who is in office at the time or who is to blame. Walter is not wrong in this article.
Comment: #6
Posted by: Chris McCoy
Tue Sep 4, 2012 2:26 PM
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If you guys think Obama is so great, lets tackle the issues one at a time. Start with spending. He said as a candidate that he would reduce the national debt. He also said that raising the debt ceiling again and again was irresponsible. He has failed to get a budget passed. He controlled House and Senate for 2 years, so you can't say reps blocked him as an excuse. So far he's raised the debt by 4 or 5 trillion dollars. Looks like what he promised back then didn't live up to reality.
Comment: #7
Posted by: Chris McCoy
Tue Sep 4, 2012 2:41 PM
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And another thing. Sweeny says all the time how corrupt and dysfunctional the government is. When he says it, he's a guru and a sage, but when I say it, suddenly I'm nuts. Dosen't make any sense to me. Is it because I don't write short stories for comments? I can try, but when I get started my lunchbreak will be over. I could try writing them at home, but then my kid starts crying. So, I'll have to keep writing brief and concise comments.
Comment: #8
Posted by: Chris McCoy
Tue Sep 4, 2012 4:29 PM
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The cure for the regulatory paralysis inflicted onto the economy by overlords is to abolish the "fine." If regulations had no remedy other than incarceration, the regulatory apparatus would grind to a halt, both because most of the regulatory dicta is not important enough to a jury to send a violator to jail, and because the funds confiscated by the overlords are used to perpetuate the constriction.
Comment: #9
Posted by: Joel
Wed Sep 5, 2012 6:04 AM
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All we are doing is complaining about how bad the situation is in America and the world and everyone whether Democratic or Republican doesn't realize that the economy and education needs a radical workable overhaul or update. Piece meal modifications to the political system will just not work in the long run because both political philosophies are going to bankrupt the United States and eventually the world. We need to radically change the laws in the welfare system and education system to adjust them to the technological age and start to institute solutions which will work and lead us out of the impending bankrupcy which threatens to come true if we apply old fashioned ways of doing things. My books available on Kindle and Nook Book offer most of the needed change solutions-EDUCATION REFORM and CHANGES IN WELFARE LAWS. Happy reading!!!
Comment: #10
Posted by: Uldis Sprogis
Wed Sep 5, 2012 6:38 AM
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Regulation of safety, competence, energy independence, or any other prohibition on exchange is everywhere and always to the advantage of existing suppliers at the expense of: (a) consumers/customers; and (b) would-be new competitors seeking to become suppliers.
It's that simple. THAT simple, really! NONE of these regulations is justified (net beneficial) on the large scale of things. This includes, of course, the production of money, a process the government jealously (everywhere) arrogates exclusively to itself.
Comment: #11
Posted by: N. Joseph Potts
Wed Sep 5, 2012 9:03 AM
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QUESTIONS FOR POLITICIANS::: ‎1] DO YOU PLAN TO ELIMINATE NAFTA, CAFTA, FOREIGN TRADE AND BRING AMERICANS TEXTILE AND FURNITURE MFG. JOBS BACK TO AMERICA, THUS PUTTING MILLIONS BACK TO WORK? [2] DO YOU PLAN TO CUT SALARIES, INSURANCE, AND RETIREMENTS OF ALL SENATORS, CONGRESS PEOPLE, AND JUSTICES, THUS PUTTING TAXPAYERS MONEY BACK IN SOCIAL SECURITY? IF NOT, THEN SINCE POLITICIANS HAVE DONE NOTHING CONSTRUCTIVE FOR AMERICA, SEND THEM HOME...NO SALARY...NO INSURANCE..NO RETIREMENTS AND PUT IN PLACE "GOVENOR OF EACH STATE" TO TAKE ARE OF 'WE THE PEOPLE', AS THESE 'CAREER POSITIONS' SHOULD HAVE NEVER HAPPENED TO BEING WITH!!! [3] ELIMINATE OBAMACARE...THE MEDICARE SYSTEM IS SO SCREWED UP, IT NEEDS TO BE TRASHED, THUS GIVING TAXPAYERS THEIR MONEY BACK, SO THEY CAN GO BACK ON THEIR OWN INSURANCE, INSTEAD OF BEING "FORCED" TO PAY EXTRA MONIES TO MEDICARE FOR NOTHING...GENERIC DRUGS ARE NOT THE ANSWER, EITHER!!! [4] ELIMINATE ALL SOCIAL AND WELFARE PROGRAMS, AS THESE HAVE DESTROYED THE MORAL FIBER OF OUR COUNTRY AND IT'S TIME TO STOP!!! [5] CUT GOVERNMENT BACK BY 98% AS BIGGER GOVERNMENT IS NOT THE SOLUTION, JUST MORE PROBLEMS!! [6] THIS IS A GOOD PLACE TO START AS THERE'S SO MUCH WRONG THAT NEEDS TO BE CHANGED!!! hARD-WORKING TAXPAYERS ARE COUNTING ON YOU TO START WITH THESE AND MORE TO FOLLOW!!!
Comment: #12
Posted by: Shirley deLong
Wed Sep 5, 2012 1:14 PM
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Taxpayers need to know why politicians, already in office, seeking re-election continue to
state ‘we're working for you' when in essence you're only working for yourselves and your
exorbitant salaries, insurance, and big retirements, thus costing Taxpayers trillions! You
politicians have been in office long enough to have done something constructive for
America and the only thing you've done is sold American's jobs to foreign
countries..stating “we'll become a service country!” The only things being serviced are
your exorbitant salaries, insurance, and retirements! Just another Ponzi Scheme and
totally unacceptable to Taxpayers. If textiles and furniture manufacturing jobs aren't
brought back to America immediately, there's nothing left for our children and our
granchildren!
Folks, do you want a GM car or a John Deere tractor in your home to sit on instead of
furniture you built? The politicians apparently think so, as this is why they gave Taxpayers
money away instead of trying to do something about NAFTA, CAFTA, & FOREIGN TRADE!
Doesn't take a rocket scientist to see nothing constructive has been done by politicians in
past five (5) decades. Lies and deceit destroyed and bankrupted America. Why does
America need all these senators, congress people and justices? Oh, it must be the political
way of saying “we're putting people back to work!” Really, these people wouldn't know
what work is. Harry Reid admitted this was the hardest he'd ever worked (?) while he was
supposedly working (?) on a budget! His political career and other political career
positions only create bigger government. America needs to wake up and understand this
only means ‘Taxpayers are the Puppets' and are being used and abused.
America needs to run like a business with no fringe benefits. If he or she doesn't do the job
(no longer a career position), fire them and hire someone else.
Time to ship politicians, Democrats & Republicans, to the very countries they sold America
out to...no salary...no insurance...no retirement, take all their assets to pay off the trillions
they've borrowed (?) without Taxpayers consent, to pay back the Social Security monies (&
other monies) they have taken, and put Governor of each state in charge..If they don't do
the job (no longer a career position (never should have been), then 'YOU'RE FIRED'!
While I'm on a roll, anyone know why politicians would be ‘loaning' Taxpayers money to
foreign countries, but yet, ‘borrowing' money from foreign countries. Something is wrong
with this picture, don't you think?
Comment: #13
Posted by: Shirley deLong
Sun Sep 9, 2012 11:09 AM
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