In a series of sketches for Saturday Night Live, Billy Crystal played a fictionalized version of actor and director Fernando Lamas as host of the talk show “Fernando’s Hideaway.” Crystal’s character would often say that it is better to look good than to feel good.

This was on my mind as I reviewed recent evaluations of St. Louis’s guaranteed basic income pilot by Washington University’s Center for Social Development. The review’s claims will sound familiar to anyone who has followed these pilot programs around the country. Participants reported feeling more financially secure. They were better able to pay bills and cover everyday expenses like rent, utilities, and groceries.

In many ways, the findings are exactly what one would expect. St. Louis distributed $500 per month for 18 months to several hundred households using federal pandemic relief funds. If someone suddenly receives an additional $500 each month, it should not surprise anyone that paying bills becomes easier in the short run.

The St. Louis program is also not unique. Over the past several years, cities across the country have launched similar guaranteed income pilot programs. Their evaluations tend to report the same kinds of outcomes: reduced financial stress, improved food security, and higher levels of self-reported well-being.

But as economists Hilary Hoynes and Jesse Rothstein of the University of California, Berkeley note in a review of the universal basic income literature, the new wave of guaranteed-income pilots is “not well suited” to answer the most important questions about the policy. (My colleague David Stokes wrote about this same study in 2024.) The pilot program evaluations tend to measure short-run responses that economists have already examined for decades in earlier experiments.

These evaluations often measure something quite narrow—how recipients say they feel about their financial situation. But feeling good about one’s finances is not the same thing as actually being better off.

More comprehensive research on guaranteed income programs paints a more complicated picture. A recent randomized study published by the National Bureau of Economic Research examined the effects of unconditional cash transfers using a large experimental design. In that study, 1,000 individuals were randomly selected to receive $1,000 per month for three years, while a control group received only a nominal payment.

The researchers tracked employment, income, and time use using administrative data and detailed surveys. Their findings suggest that while the payments increased consumption and temporarily improved subjective well-being, participants also worked fewer hours and saw declines in income earned from work. The transfers reduced labor-force participation and led participants to shift some of their time away from paid work and toward leisure.

In other words, the transfers made recipients feel more financially secure—but they also changed work behavior in ways that reduced earned income.

This should not come as a surprise. Economists have been studying guaranteed income–style policies for decades. Earlier negative income tax experiments and other research on income transfers have consistently found that unconditional income tends to reduce work effort modestly. Those effects may be small, but they are real and have important implications for the long-term economic impact of such policies.

None of this is to say that guaranteed income programs provide no benefit to recipients, or that the research from Washington University is flawed. Reducing financial stress and helping families weather unexpected expenses is not nothing. But policymakers should be careful not to confuse the short-term financial relief detailed in the St. Louis pilot program evaluation with long-term economic improvement.

There are also broader societal concerns that pilot evaluations like this one cannot address. One of the Show-Me Institute’s objectives is to build a state where “all Missourians are free from dependence on government.” Large unconditional cash-transfer programs, such as the program tested in St. Louis, could expand long-term dependency on government support and weaken incentives for work and self-sufficiency. That risk remains a significant policy concern.

Feeling better about your finances is not the same thing as improving the underlying economics—regardless of what Billy Crystal might advise.

Local leaders must be careful not to confuse the two, lest we commit to an expensive program that does more harm than good.

The post Economically, Feeling Better Isn’t the Same as Being Better appeared first on Show-Me Institute.

Needless occupational licensing requirements make it harder for people to work in our state, and wait times for licensing waivers unnecessarily burden applicants.

The Solution

Periodic review of all licensing requirements, elimination of regulations without proven benefits to public safety or product quality, and reduction of the maximum time to receive an out-of-state licensing waiver.

Licenses Should Have Proven Benefits

Occupational licensing is the government giving someone permission to work in a certain field. Obtaining a license typically involves satisfying an educational requirement and paying a fee.

Most licensing laws are justified as public safety measures or as necessary to ensure the quality of the relevant service. However, there is little evidence that occupational licensing laws provide any benefit in this regard, as demonstrated by the Mercatus Center at George Mason University in a meta-analysis of 19 different studies directly related to licensing and product quality. In only 16% of included studies did researchers observe positive relationships between licensing and product quality.

Occupational licenses raise prices, impose higher barriers to entry, cost licensees time and money, and reduce innovation. Because of these costs, an occupational license should provide a proven benefit to public safety or product quality.

Issuing Waivers Efficiently

2020 marked the establishment of Missouri’s licensing reciprocity regime. Under current law, any person who has held a valid license issued by another state for at least one year can practice in Missouri at the same occupation or level with all Missouri licensing requirements waived.

However, the relevant oversight body can wait up to six months to issue a waiver to an applicant. A worker considering relocation to Missouri might not be able to wait half a year before starting work in the profession in which they’ve been trained. This delay puts applicants in a bind: Either wait for a waiver during this extended period or meet the Missouri licensing requirements so they can work. This reality may dissuade individuals from relocating to Missouri entirely.

Missouri provides an expedited licensing timeline for qualified spouses of law enforcement officers and members of the military. This is a step in the right direction, but all professionals seeking work in Missouri should have their applications reviewed in a timelier manner.

Key Facts

• Five percent of the U.S. workforce was licensed through state laws in 1950. In 2024, 22% are licensed.

• In Missouri, it only takes an estimated 26 days of education and experience to become an EMT, but 175 days to become a makeup artist.

Sunset Reviews for Occupational Licenses

Many licenses are created and then exist for years without scrutiny. Not all licenses justify the costs they impose; in fact, Missouri has eliminated a number of unnecessary licenses, such as licenses for hair braiders. A sunset provision would bring attention to other outdated and unnecessary requirements, helping ensure that only those with proven benefits remain.

Reducing the burden of occupational licensing could create opportunities for workers and consumers, lower prices, and increase economic growth. Licensed occupations should be the exception, not the rule.

Policy Recommendations

• Establish a staggered sunset and review period for all professional licenses and licensing boards.

• Reduce the maximum waiver review time from six months to 45 days.

The post Occupational Licensing appeared first on Show-Me Institute.

Regarding the courts, a coalition of Missouri business groups, including the Missouri Chamber of Commerce, has filed a lawsuit challenging Proposition A.

The plaintiffs argue that combining wage increases with sick leave provisions violates the state constitution’s single-subject rule for ballot initiatives. Proposition A, which passed with 58% of the vote, would incrementally increase the minimum wage from $12.30 to $15 by 2026 and provide workers up to seven paid sick days annually starting in May 2025. Supporters contend that wages and benefits are integral to overall compensation and thus constitute a single subject. The Missouri Supreme Court has yet to schedule hearings for the case.

As for the legislature, because the proposition was a statute, the legislature may act to overturn it. One Missouri legislator introduced the Entrepreneur Rights Act, which would exempt some small and seasonal businesses from minimum wage increases.

Supporters may point to California’s recent mandate elevating the minimum wage for fast-food workers to $20 per hour as a triumph for labor rights. However, a closer examination reveals that the anticipated benefits, particularly in job creation, have not materialized. A study from the University of California, Berkeley, initially suggested that the wage hike did not adversely affect employment levels. Yet, upon scrutinizing the data, it becomes evident that fast-food employment in California has grown at a slower pace compared to the national average. In fact, since the law’s implementation, California’s fast-food employment increased by only 1.85%, while the national rate rose by 3.22%. This discrepancy indicates that the wage increase may have hindered job growth within the state. Such outcomes underscore the complexities of implementing blanket wage policies without fully accounting for market dynamics and the potential unintended consequences on employment opportunities.

Show-Me analysts have consistently been critical of the arguments for, and the claimed benefits of, increases in the minimum wage. Minimum wage hikes just don’t deliver on their promises—even if academic studies twist themselves into knots trying to demonstrate otherwise.

The post No, California’s Minimum Wage Hike Did Not Create Jobs appeared first on Show-Me Institute.

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The post The Minimum Wage in Missouri appeared first on Show-Me Institute.

As free-market economists have long explained, raising the minimum wage prices the most vulnerable workers out of a job. It can lead to reduced hours, less full-time work, layoffs, and increased prices for consumers. There is nothing moral about advocating for policies that produce these results.

A new survey from the Employment Policies Institute (EPI) highlights the negative impacts of California’s recent increase in the minimum wage. California passed a law that raised the minimum wage for most fast food restaurants to $20 an hour beginning April 1, 2024. EPI surveyed 182 restaurant operators to assess the effect of the increase in wages.

Here are some of the key findings of the report:

• A majority of restaurants say they have already raised menu prices (98%), reduced employee hours (89%), have limited employee shift pick-up or overtime opportunities, (73%) and reduced staff or consolidated positions (70%).
• Many (75%) say the number of employees will decrease (somewhat decrease, 50%; significantly decrease, 25%).
• Nearly all (99%) say prices will increase, with 73 percent saying they will “significantly increase.”
• A majority (74%) say there is an increase in the likelihood of shutting their restaurants down (somewhat increase, 38%; significantly increase, 36%).

Fast food jobs are entry-level jobs. They are well suited for individuals entering the job market for the first time or individuals who struggle to gain employment elsewhere. As such, they are a stepping stone to further career advancement. I say this as someone who began his career working minimum wage fast food jobs. Raising the minimum wage may help some workers earn more per hour, but it also leads to fewer job openings, diminished hours, and fewer opportunities for less skilled workers.

The post The Moral High Ground and the Minimum Wage appeared first on Show-Me Institute.

In recent years, several studies have also suggested a positive correlation between an increase in the minimum wage and property crime (such as burglary, larceny, and auto theft) committed by young adults, who are disproportionately impacted by an increase in the minimum wage. But why would a minimum wage increase lead to an increase in property crime?

The hypothesis is that when minimum wages increase, low-income and low-skilled workers experience a reduction in hours worked or increased unemployment, which often means a loss of income. The authors conclude that this decrease in earnings, reduction in hours worked, and increase in unemployment contribute to increases in property crime rates.

The effects of raising the minimum wage are particularly felt by workers who are younger, have a lower income, and are less skilled. The Journal of Economics study finds:

. . . using data from the 1998–2016 Uniform Crime Reports, we find that a 10 percent increase in the minimum wage led to increases in property crime arrests for those between the ages of 16-to-24 of approximately 2 to 3 percent.

Intuitively, this makes sense—losing your job or losing hours at your job could increase economic desperation, leading people to commit property crimes such as theft. In addition, jobs help give people structure and keep them on the right track. The Journal of Public Economics study mentions that more labor market opportunities for younger workers reduce criminal behavior because it increases the opportunity cost of crime. If you have a job, you have more to lose if you get caught committing a crime.

What does this all mean for Missourians? Raising the minimum wage can not only lead to fewer hours and jobs, but also more crime. To actually benefit low-income and low-skilled workers, shouldn’t we instead pursue policies that foster an environment enabling businesses to create more jobs, such as tax cuts or eliminating unnecessary occupational licensing?

The post Does the Minimum Wage Impact Crime Rates? appeared first on Show-Me Institute.

Similar to Missouri’s potential $15.00 minimum wage, Seattle’s minimum wage ordinance passed in 2014 phased in an increasing minimum wage in the City of Seattle from the state’s $9.47 minimum to $11 in 2014, $13 in 2016, and $15 in 2017. A 2017 study at the University of Washington found that the increase to $15 an hour resulted in low-skilled workers experiencing a reduction in hours worked or even job loss. This decrease in hours worked for low-skilled workers resulted in “a net loss of $74 per month.” A pay cut of $74 per month can have a significant impact on low-income workers. The study found that employers opted to replace low-skilled workers with higher-skilled workers who could perform the job more effectively and therefore warrant a wage equivalent to the new minimum wage.

Seattle’s experiences are just one example of how a minimum wage increase negatively affects low-income workers. California recently increased its minimum wage to $20 for fast-food workers, resulting in many workers suffering from a loss of income. Mark Harmsworth, director of the Small Business Center at the Washington Policy Center, said:

Sometimes, instead of a salary bump, many workers instead find their work hours cut or their jobs eliminated completely. For some employees, if they fall below a minimum hour threshold required for benefits, they lose benefits too.

Increasing the minimum wage is a misguided way to try and help workers. If policymakers and voters want to assist low-income workers, then increasing the Earned Income Tax Credit would be a better approach.

The post A Closer Look at the Effects of a $15 Minimum Wage for Missouri appeared first on Show-Me Institute.

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The post The Future of Missouri’s Workforce with Susan Pendergrass appeared first on Show-Me Institute.

This report describes the current Missouri workforce, projects the condition of that workforce in 2040 barring a course correction, and examines potential policy fixes that could get the state’s workforce back on track. Click here to read the full report.

The post The Future of Missouri’s Workforce appeared first on Show-Me Institute.

Click here to read the full report.

The post The Case for Modernizing Unemployment Insurance appeared first on Show-Me Institute.

Occupational licensing adds educational requirements, fees, and other hurdles that make it harder to get a job. We see onerous requirements negatively affecting workers across the country, such as hair braiders in Louisiana (highlighted in the Journal article) who need 500 hours of training to receive a full cosmetologists license to exclusively braid hair. Lawmakers at the federal level have expressed a desire to increase competition in the workforce by reining in occupational licensing, but it is state lawmakers and licensing boards that set the standards and regulations.

Missouri lawmakers took a big step forward with occupational licensing reciprocity, but there is still more that could be done. One policy that I believe would prove beneficial for Missouri workers: Lawmakers should introduce a five-year sunset for all occupational licenses and licensing boards. With a sunset, all licenses and boards must be evaluated and approved by lawmakers every five years. The hope is that unnecessary regulations, and maybe even unnecessary licenses, will be identified and eliminated. Reducing the burden of occupational licensing will create opportunities for workers and consumers, lower prices, and increase economic growth.

The post Let’s Sunset Occupational Licenses appeared first on Show-Me Institute.

With all these job openings, it really does seem like it’s time for things to finally get back to normal and for people to get back to work. The reasons we may have needed additional unemployment benefits during the height of the pandemic are fading fast—businesses are opening, vaccines are widely available, and people are returning to life outside their homes.

The economy is recovering from the pandemic, but it’s possible that increased federal unemployment benefits have slowed down our recovery by causing people to push back their job search. Governor Parson decided that Missouri would end all federal pandemic-related unemployment benefits on June 12th to incentivize people to get back to work. I think this was a smart move because jobs are clearly available. It’s time to stop relying on government handouts and fill those job openings.

The post Jobs, Jobs, and More Jobs appeared first on Show-Me Institute.

Fact #1: Our economy and society are increasingly bifurcating along educational lines.

Fact #2: People with bachelors’ degrees are doing much better than people without them.

Fact #3: Not everyone can or should earn a bachelor’s degree. (Okay so this one is part fact, part opinion)

A recent paper by economists Anne Case and Angus Deaton showed that while racial gaps in life expectancy are narrowing, the gaps in life expectancy between those with bachelor’s degrees and those without them are widening. And, tracking the last two decades of unemployment data shows that every time there is an economic contraction, those at the lowest end of the educational spectrum are hurt substantially more than those with college degrees. This is reflected in the completely different pandemic experience of more-educated Americans who were more likely to have jobs that could be performed remotely and less-educated Americans who had jobs that had to be performed in person.

If our society continues to cleave along educational lines, there will be serious negative consequences for our politics, communities, and economy.

It is tempting to respond to this problem by saying “Okay, well then everyone should get a bachelor’s degree,” but we know that many good jobs don’t require bachelor’s degrees, many people are unable or unwilling to engage with college-level work, and college is increasingly expensive.

The real question is: Is there another way?

A recent working paper published by the Annenberg Institute at Brown University may offer a better way forward. Researchers from Rice University and the RAND Corporation examined occupational credentials—post-high school certifications that denote skills or knowledge relevant to a particular field.

The authors found that certifications increased the probability of employment for workers without a bachelor’s degree by 37 percent. As they put it, “this suggests that occupational credentials act as an important signal to employers in the hiring process, especially for those with less than a bachelor’s degree.” This, as one might imagine, also translates to higher earnings.

It is increasingly clear that students need some kind of post-high school education to access more stable, more rewarding, and more remunerative jobs. Creating quality certification programs and helping link students to the training that they need could go a long way in bridging the educational divide.

The post Are Occupational Credentials the Answer to Educational Polarization? appeared first on Show-Me Institute.

We saw similar weak employment recovery following the 2009 financial crisis when endless extensions of unemployment insurance benefits discouraged some from seeking jobs and reduced job creation. Could the forces that created the “Redistribution Recession” last time also be a threat now?

One reason to be extra concerned is that people may be getting more money on unemployment than they would if they were working. The most recent federal relief package, the American Rescue Plan Act, extends unemployment benefits through at least September and maintains the $300 supplement that gets paid out on top of the usual state benefit.

Unemployment benefits are meant to provide temporary assistance for people as they look for jobs. These benefits are not intended to replace work and therefore should not put people in a position of taking a pay cut to get a job. Why would people go back to work if that’s the case? We also need to be mindful of other factors here—disincentivizing work hurts small businesses that are trying to find workers to get back up and running.

Of course, not all unemployment benefit recipients are receiving more than their previous paychecks. Some workers are getting paid too much—disincentivizing them from taking a job—while others are still left to make do with less money than when they had a job. To fix these problems, it may make sense to replace the $300 supplement with unemployment benefits that are more closely tied to previous wages.

The best way to get the economy on track is to help jobless workers avoid financial distress while still ensuring that it is financially advantageous for them to find a new job rather than remain unemployed. Putting money in people’s pockets is a temporary Band-Aid that staves off hardship. But if an unemployment insurance program delays the real cure of getting people back to work, is it really a stimulant for the economy? Or a depressant?

The post Are Unemployment Benefits Making It Harder to Find Workers? appeared first on Show-Me Institute.

• Attempts to license certain occupations are almost always initiated by the current practitioners of that field. Whether framed as a safety measure or a benefit to consumers, don’t be fooled. Practitioners personally benefit from limited competition and higher prices brought about by licensing. It is the classic case of concentrated benefits versus dispersed costs.
• Promises about what occupational licensing will achieve often fall short. Instead of improving service quality, we often see unintended consequences like do-it-yourself accidents and stifled innovation. Much of this can be explained by the fact that licensing increases costs. For example, higher costs lead to more do-it-yourself work, and that leads to more accidents.
• In the absence of licensing, people are not regularly subject to fraud and abuse as proponents of licensing would have you believe. Many Missourians hire from particular professions via recommendation from a trusted third party, like a friend or review website. If the worker does a poor job, he will stop being recommended and will receive poor reviews. As my colleague David Stokes said in his testimony (who was himself paraphrasing economist Adam Smith), in a competitive market, job performance and reputation put bread on a worker’s table, not a state license.

Ultimately, occupational licensing increases costs to consumers, limits competition, and hinders Missouri’s economy. Missouri has lost thousands of jobs and millions of dollars in output due to licensing requirements. During pandemic-related shutdowns, it is especially important to encourage entrepreneurship and remove regulatory barriers to work. Last year, Missouri took a huge step forward by allowing occupational licensing reciprocity and temporarily waiving some occupational licensing requirements. Let’s make sure that policymakers continue to move Missouri in the right direction.

The post Don’t Forget the Basics of Occupational Licensing appeared first on Show-Me Institute.

Titled “Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?” it surveys the existing research on the effects of the minimum wage.

What does it find? According to the authors:

Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.

Labor economics isn’t my field of expertise, but from an outsider’s perspective, raising the minimum wage doesn’t look good!

The post New Summary of Minimum Wage Research Shows Negative Effects appeared first on Show-Me Institute.

Regardless of where you stand on the issue of schools reopening, there are some fundamental facts here. First, putting kids together with 20 plus students in a classroom and crowded hallways undoubtedly increases the risk of spread. We can debate how much kids transmit the virus or how few deaths occur among children below the age of 18. These are all important conversations to have. Nevertheless, we cannot deny that schools packed with children are a petri dish where germs (and viruses) are spread. Kids will be kids. They will not effectively social distance and they will not wear their masks with fidelity. Without question, teachers in schools would have a much higher risk of catching COVID than teachers working from their living room.

The second unmistakable fact is that not opening schools will lead to large disruptions in the workforce. Parents without other options will be forced to quit their jobs or work from home as they help their children navigate the new online educational environment. This disruption will lead to decreased productivity and could have long-term negative impacts on the economy. Again, there are other issues we could debate, but there is no denying that closing schools will impact the livelihoods of many families.

We ask essential workers to face greater risks because the products of their labor—their service to us or the goods they produce—are integral to the lives of other people. We do not deny that they increase their risk by going to work. We do not deny that sending essential workers home would impact the lives of others.

It does feel strange that the clearest voices arguing that teachers are not essential are the teachers themselves, while the most persuasive essay arguing they are essential that I have read comes from a nurse.

So, I return to the central question—are teachers essential? I’ll let you, dear reader, determine the answer to this question yourself.

The post Are Teachers Essential or Not? appeared first on Show-Me Institute.

States, including Missouri, have adopted other licensing policies, including the establishment of interstate “compacts” and agreements between and among states that provide some reciprocity features, but a recent paper out of Arizona State University’s Center for the Study of Economic Liberty highlights the downfalls of that and other forms of licensing portability. The paper argues that broad-based occupational licensing reciprocity is a better way to “open the broadest avenues to opportunity for the most workers in the shortest amount of time,” and although interstate compacts and multistate licenses increase license portability, they take a lot of work to set up and only provide portability for specific professions within the states that join.

A better alternative to our current system is the one we propose: broad-based licensing reciprocity. As the ASU paper explains:

Unlike compacts, universal licensing reciprocity can: 

1. be broad-based and cover a wide range of workers; and, 
2. encourage competition between states in terms of the requirements to obtain a license — or even whether a state should mandate an occupational license at all. 

Broad-based licensing reciprocity is a better route for portability reform as it avoids the pitfalls of our current system and enhances economic opportunity and competition. Hopefully the continued research in favor of licensing reciprocity will lead to favorable legislation that increases opportunities for workers.

The post Arizona State License Portability Study Highlights Reciprocity Benefits appeared first on Show-Me Institute.

The first, HB 1511, would allow for out-of-state licenses held by military spouses to be accepted here in Missouri. This has been a popular reform in recent years, and already every state, including Missouri, has some version of reciprocity for military spouses in place.

The real game-changer is the second bill, HB 2046, which would allow for this sort of licensing reciprocity for anyone. This means that someone who holds a valid occupational license in good standing from another state could come to Missouri and qualify for the same license here with few or no administrative burdens.

This bill would have a plethora of positive effects on Missouri. It would make the state a much more attractive place to relocate by eliminating the over-burdensome requirements for re-licensing a worker. But it also should offer consumers greater choice and competition in the market for all kinds of services, including health care.

Occupational licensing burdens workers and the economy. As Show-Me analysts have written and testified, reducing government barriers to work is good for workers, consumers, and the state economy. Many other states are considering licensing legislation like this, and this bill would help Missouri become a more competitive and attractive state for consumers and professionals alike.

The post Occupational Licensing Reform Is on the Move appeared first on Show-Me Institute.