Transcripts For CSPAN Federal Polices And Poverty Part 2 201

Government policies that we are going to talk about in this panel limit the opportunities for them to get a job, for everyone to get a job, the most in the people are the ones who need it the most. I will cut straight to the introductions. Knepper is the director of Strategic Research at the institute for justice. Policy in social Science Research on issues choice,to School Private property rights, economic liberty, and free speech. Ofore working as a director Strategic Research, she served as the director of communications and joined the 2001tute and september where she specialized in Public Relations for technology companies. After miss knepper, we will hear from diane katz, she is a senior fellow in regulatory policy at the Heritage Foundation. She previously was director of environment, and Energy Policy for three years at the fraser institute. Snead. , we have jason he has written extensively on the need to reform the nations civil Asset Forfeiture laws, he also writes on issues such as regulation of unmanned aircraft, a economic liberties, and criminal Justice Reform and policing. He holds a masters degree in Public Policy from george mason , government and international affairs, and graduated from Bowling Green State University with a bachelors degree in history and lyrical science. And political science. We will go to lisa knepper. Lisa more American Workers than ever need a permission slip from the government before they do their jobs. That is called an occupational license. To get one, you have to meet certain criteria established by the government. You may be required to attend school for four years or for 1600 hrs. Hool you may be required to apprentice in your chosen occupation for 2, 3, or four years. You may have to pass an exam or two. Of the American Workforce subject to licensing red tape has been on the rise since 1950s. 20k then, just one in americans needed a license to work. Today, that is closer to one in four. These kinds of policies hurt the poor in two keyways. First, occupational licensing red tape creates real and substantial roadblocks to economic talk to it opportunity. In 2012, the institute for justice released a study hall license to work. Toexamined the requirements get an occupational license for 102 low and middle income occupations across all 50 states and the district of columbia. Intound that breaking those 102 lower income occupations would take nine months in education and training , passing one example, and paying more than 200 in fees. Those figures do not account for hidden costs. The cost of tuition for acquired schooling. That is a lot of time and money spent trying to earn a license instead of earning a living. Those costs are going to be particularly hard for folks with lower income to bear. Cost of a real and substantial. Licensing laws are costing the American Economy as many as 2. 8 5 million jobs. The other cost is from higher prices. Artificiallys restrict the supply of providers, allowing them to raise their prices. Estimate puts that figure the cost to all of us from higher prices at about 203 billion annually. Americans, that means paying more for the same services. Or simply doing without. Is the 30,000 foot view of occupational licensing from the perspective of any economist. What i want to talk about is what occupational licensing looks like to ordinary americans. Ms. Bell is a single mom and a hair brighter. She learned the craft from her mom. That is how the craft is passed down. It originated thousands of years ago in africa and is a form of natural hair care area involved no feet, no chemicals, and no sharp instruments. Herilled hair greater from youth was required by the state of iowa to get a cosmetology license to practice legally. That would have meant attending school for 2100 hrs for more than a year, at a cost of about 22,000 in tuition. Cosmetology exam and paying fees. That exam would not teach anything about african style would a vast, nor majority of the curriculum teach anything about africanstyle hair braiding. Got luckyght she and that she found a salon owner that was willing to employ her. She was operating in a legal gray area. At any time, the state board could have shut her down. That would have meant not just the loss of her job, she was also risking up to a year in fines. D up to 10,000 in all for the crime of braiding hair without a license. She joins with the institute of justice, we sued the state of iowa. Exempted african style hair breeders from the cosmetology licensing scheme. Now operators simply have to register with the state. These forms have been increasingly popular in the state. About 10 states have adopted some kind of reform exempting freighters from exempting braiders from cosmetology laws. Were 2600 registered braiders and mississippi. Effect of just one occupation in one state. Others have not been so lucky. Threader in louisiana is the owner of a threading school and spot in new orleans. Her craft is eyebrow threading. Naturalanother form of grooming that originates from south asia. It involves taking a thread and manipulating it over the face to pluck out unwanted facial hair. It is impressive when you see it. She learned the craft in her native india as a teenager. She opened her own business and it is booming. Becoming is increasingly popular because it is a cheaper and quicker alternative for hair removal. Her business was taking off until the state of louisiana determined that threaders should be licensed. This is another type of cosmetology license. That would take 750 hours in Cosmetology Schooling and cost about 10,000 in tuition, passing three exams. None of those exams have eyebrow threading and none of the curriculum addresses it. This is the position she is in as a Small Business owner. Demandingstomers threading services, but she cannot hire the people best qualified to provide them. Beauticians do not know how to thread. They do not learn it. The people who do know how to perform the craft typically cannot afford to get a license. She used to employ unlicensed threaders until the state of louisiana started cracking down. Centerrd of cosmetology sees and desist letters. They started finding her thousands of dollars, and finally they ordered her to fire her unlicensed threaders. During the complete loss of her business, that is what she had to do. Those folks are now out of work or working in less lucrative fields like retail because they have to find some way to make ends meet. That is what licensing laws look like to too many americans. What can we do about it . Guessing the people in this room are familiar with the phrase repeal and replace. Im going to suggest we should sometimesng and replacing. There are licensing laws we could do without. Meet the government interfering in the private marketplace for braiders or threaders. Consumers are wellequipped to decide who is qualified for those services. The discipline of the private marketplace will ensure Higher Quality. A demonstrated need for some form of intervention, we should be actively considering lighter touch alternatives to creating barriers to work. If there is a concern that sanitation practices that certain sanitation practices be followed, have a regular regime of inspections rather than licensing. Inspectarly restaurants, but we do not license chefs and the staff. If there is a concern that consumers are not sophisticated aough to understand whether Service Provider is qualified, private certification or less desirable government certification can fill that role. Providers can become certified and demonstrate they have met certain qualifications and signal that to consumers. Others who have not met the qualification are not left out of the market. , byutting back the red tape cutting back the growing tangle of occupational licensing laws, we can put more americans to work and more lower income americans. [applause] now well hear from diane katz. Thank you patrick. Good morning, everyone. I am here to talk about the affects on the poor of government efforts to eliminate loans under the dodd frank Consumer Protection act. Doddfrank represents a massive regulatory takeover of the financial system. Describingnd days the effect of those regulations on Financial Services across all income levels, across all sectors of the economy, i will stick primarily to the payday lending element. The effect of excessive regulation are the same no financialt ones status is fewer choices, less competition, and higher prices. Are feweror, there alternative sources of credit and capital, which makes the crackdown on payday lending particularly egregious. For those who may not be familiar with payday loans, they are short term loans, typically less than 500, that come due on a borrowers payday. They are structured to be paid off and out lump some a lump sum, but there is the option of a rollover. They are used to solve a specific problem car repair, a medical bill, a utility bill, something the borrower needs to take care of immediately. That is an important point because if you are poor and you have an unexpected breakdown in your transportation, if you do not have a source of quick cash, you could use your you could lose your job if you are unable to get to work. You need more than 12 million than 12 Million People use Payday Loan Services every year. Smalldo not offer such loans. This is a market niche that is not filled by any other financial Service Provider. Critics claim these loans trap borrowers into a high cost debt cycle by charging a high annual percentage rate. This is ignorance. Shortterm loans do not extend over a years worth of time. There is not an annual rate to them. The interest is not compounded, which makes all the difference in the world. The apr represents the actual rate of interest someone pays over the course of a year due to compounding. The process whereby interest is outed added to unpaid principal. Payday loan customers do not borrow for a full year. The interest charges do not compound. There is no apr on a payday loan. 100 for two weeks for a fee of 15, the fee expressed as an Interest Rate would be 15 . When a payday customer rolls over a loan at payday, he has to pay a new 15 fee, and is then responsible for repaying a total of 130. Cannot explode exponentially as they can with a mortgage because there is no compounding. The Consumer Financial Protection Bureau is the primary regulator in this case. Presumes that borrowers are incapable of making rational choices and subject themselves to exploitation because they are not smart enough to manage finances. There is a whole tangent on what that view of the poor can do for their opportunity and prospects. I will not go down that road, but it is something to keep in mind. The view is repugnant on so many levels. To grasp thatil payday loans are a remedy, they are not the problem. People are going to payday lenders because they have a problem. The remedy is the loan. Along comes the Consumer Financial Protection Bureau with putoposed rule that would 70 of payday lenders out of business. Most notable would be a new requirement that lenders, before making a shortterm loan, would have to determine the customers ability to pay, and meet their other financial obligations and basic Living Expenses without needing to reborrow. Also beenonstruct has applied to mortgage lending under doddfrank, and the result housing sales are down. The effect of that ability to pay regime also means it is much harder for firsttime buyers, younger buyers to purchase a first home. If you do not have that first population, it does not create churn in the market. That churn is current homebuyers can sell it to someone and why up. Up. And buy over time, we get increasing numbers of homes being taught and sold. The payday loans, specifically, a lender would have to verify the consumers net income, verify their debt obligations using a Consumer Report or a registered information system, verify the housing cost, forecast a reasonable amount of basic Living Expenses for the consumer, determine the consumers ability to pay the loan based on the lenders projections of the consumers in, debt obligations, housing all of which sounds absolutely ridiculous. Not even bankers do that when they are laying out mortgages. They want to know that the consumer will pay out the look previousck the loan, to doddfrank, they do not have to do that much. Under this ability to pay regime, the bureau is shifting accountability from borrowers to lenders. And youre a borrower cannot pay back your loan, you can sue the lender under this role, as well as under the mortgage role, for miscalculating your ability to repay. This is a defense against default. This is a perversion of credit principles. It presumes that consumers are incapable of acting in their own interest. Even assuming the most benevolent intentions, this kind of paternalism fosters dependence on government and the roads economic freedom. That always hits the lowest rung of the economic ladder the worst. It is not hard to predict the result of such a regulatory regime. The cost of making the loan would swap the profit and therefore payday loans would become rare and costly. It would cut off an important unbanked cash for consumers. It also reflects a politicized narrative about the finance sector where predatory lenders exploit financially illiterate consumers, and also then will , or those who have few financial resources, into getting cash and credit from black market or unregulated types of sources of funds. There is not a lack of Consumer Protection and small dollar lending. More than 30 states already regulate payday loans. In typical washington fashion, all of that does not seem to count because it is not the best. In general and the Consumer Financial Protection Bureau in particular are imposing semi rolls that many small are imposing so many rules that many small Financial Providers are being driven out of business. This consolidates Financial Services among egger banks that do not serve the poor. Among biggerhe banks that do not serve the poor. That leaves the poor to black market lending. This government is hurting the poor much more than helping them. Is one of the worst offenders. Thank you. [applause] jason snead. Thank you patrick. It is great to be able to talk about an exciting industry which is the bride sharing industry. It has generated significant benefits not only for the economy, but for the poorest citizens of our country. The ride sharing industry is interesting for a few reasons, not the least of which because it seems like it is changing. I cannot overstate the significance of the change that has taken place in the last decade and the four Higher Ground transportation market or it in the for Higher Ground transportation market. Their whole Business Model was calcified. What we have seen in the last few years, and a very real sense theave all experienced, are benefits of deregulation and freeMarket Economics in producing Innovative Solutions to problems that lower cost, encourage competition, and lead to more innovation in the last five years than we have seen in the previous five decades. To frame the issue of benefits to the poor, i think it would be a good idea to look back at what existed before ridesharing took off. Since the 1920s and 1930s, we have seen a strict and heavyhanded approach that treats Taxi Companies more like Public Utilities than private seenprises. We have efforts to control every aspect of the industry from pricing to intrigue. Issue ofeen the licensing requirements. We have seen control of vehicle maintenance and vehicle equipment mandates down to the color of the car allowed on the road. ,his scheme was put forward ostensibly, to benefit public welfare. We were told that Market Economics cannot work in this space and only through regulatory intervention can we safeguard the public and safeguard the drivers. We have seen nothing can be further from the truth and this space. For years, without competition in the market, consumers were asked to pay above market rates for services that were stagnant or deteriorating in quality. They were consistently there were consistently underserved neighborhoods, particularly lower income neighborhoods. The reason for that is there is a system in place in taxing markets called a medallion system and this is a strict entry control. City governments will issue medallions that are permits that allow the owner to operate a taxi but these are not permits you get by filling out paperwork going to Government Office and , you get your permit. These are tradable commodities, essentially. Someone owns a medallion. In order to gain entry into the market you had to buy a medallion from someone who is already there. We have to ask ourselves who is going to allow someone to voluntarily compete against them. This is one of the minty anti repetitive of the text market. Until recently, medallions were the only way to access the market here in they had a great deal of value to them. On the secondary markets we could see taxi medallion prices measured in the hundreds of thousands of dollars. Just a few years ago in new york they peaked in the neighborhood of 1 million. The review taxi dr