Job openings have been at record highs for a while now, but companies can’t find the workers to fill them. How can Congress help? That was the subject of a recent Senate Small Business and Entrepreneurship Committee hearing. The most popular proposal was to expand federal job training programs, but there are better policies to pursue.
Addressing the worker shortage doesn’t take billions of dollars of new spending on worker training and other government programs. It takes lots of little policies, such as occupational licensing reform and reining in unreasonable permit and paperwork requirements and countless other regulatory barriers that stand between workers and jobs.
But there is something Congress can do to help clear the field and keep it that way: outsource the rule cutting by creating an independent commission that periodically combs through the Code of Federal Regulations for obsolete, redundant and harmful rules and assembles annual repeal packages for Congress for an up-or-down vote, without opportunity for amendment.
For context, the Code of Federal Regulations is 185,000 pages long and contains more than 1 million individual regulatory restrictions. In total, federal regulations cost roughly $1.9 trillion per year. New rules get added every year, but old ones are rarely removed when they are no longer needed. The result is decades of built-up regulatory sludge that blocks workers from getting good jobs. If Congress and agencies are unwilling to clean out job-killing regulations, then Congress should appoint a commission that will.
The commission idea has been tried before, and it works. When the Cold War ended and the military wanted to close unneeded bases, no members of Congress would vote to close the one in their districts. To get around that political problem, Congress outsourced the tough decisions and created the Base Realignment and Closure (BRAC) Commission. Multiple BRAC rounds during the 1990s helped Congress do the right thing and saved billions of dollars.
Several versions of a BRAC-style commission for regulations have been proposed over the years from both parties. Former Sen. Phil Gramm (R-Texas) was the first, in 1995. More recently, Rep. Virginia Foxx (R-N.C.), Rep. Josh Gottheimer (D-N.J.), Sen. Rick Scott (R-Fla.) and Sen. Mike Lee (R-Utah) have all introduced bills with variations on the regulatory BRAC theme.
If Congress is serious about addressing the worker shortage, it could start the process today with one of these bills, or a new version focused on employment regulations.
There are many possible candidate rules for the commission’s list. Occupational licensing reform has support from both parties. Much of the heavy lifting will be at the state level, but there are federal licensing requirements for truckers, pilots and many federal contractors that Congress could reform. For example, the minimum age for interstate truckers could be lowered from 21 to 18, and truckers should be allowed to set their own hours.
Federal permits, especially environmental reviews, have gotten out of hand. Projects that once took months now drag on for years before the first shovel hits the ground. Streamlining the permitting process would create not just construction jobs, but also retail and office jobs as long-delayed buildings get built and open.
Financial regulations such as the Durbin Amendment to the Dodd-Frank financial regulation law resulted in a million low-income people losing their bank accounts, limiting them to more expensive financial options like paycheck cashing stores.
Given Congress’ institutional deadlock, an independent commission may be the best federal response to the worker shortage. Congress could enact any of these reforms, but it won’t, even on issues on which both parties mostly agree, like occupational licensing. Neither party wants to give the other a political win, even if it means shortchanging workers.
Given Congress’ dysfunction, a BRAC-style commission would do more good for workers than any “do-something” bill passed in election-year haste. As Competitive Enterprise Institute founder Fred Smith likes to say, you don’t have to teach grass to grow, but you do have to take the rocks off of it.
Ryan Young is a senior fellow at the Competitive Enterprise Institute.