Prevailing wage laws are harmful because they inflate the cost of projects taxpayers pay for or, in these cases, subsidize. Research on the subject suggests that prevailing wage laws can increase the total cost of public construction projects by as much as 25 percent. For local governments with many projects needing to be built, that could mean lower-priority but beneficial projects will go undone for lack of funding. Repeated year after year, the harm done by leaving these projects uncompleted compounds, leaving the community with fewer and inferior government services compared to what market labor rates would have otherwise allowed.

DBE programs require that a certain amount of work involved in a project go to contractors and subcontractors owned by women or minorities. DBE programs also inflate the cost of projects for taxpayers and have often been vehicles for fraud and abuse. Increasing costs and encouraging criminal activity . . . where do I sign up?

Finally, the proposed law requires that bidders offer apprentice-training programs, which are generally found in union shops. There is nothing wrong with apprenticeship programs, but instituting such a mandate is blatant favoritism for union shops over nonunion competitors. It would be a substantial burden for a typical independent, nonunion company to create an apprentice program before it could bid for a project. Whatever that burden may be, the county council has absolutely no business mandating it. This is a blatant ploy to guarantee that union companies will win all county bids.

Not surprisingly, much of the language in the bill was put in by unions, according to the Post-Dispatch story.

I am a strong opponent of tax incentives and subsidies for businesses, but imposing these types of regulations on all sorts of projects in St. Louis County is a terrible abuse of the political process. St. Louis County has no business making these rules, and, indeed, I question its legal authority to do so in some of these cases. Local government should address the major issue of incentive and subsidy abuse by saying “No” far more often. Saying “Yes, but with a bunch of new regulations and red tape” is the worst policy of all.

The post Two Wrongs Don’t Make a Right appeared first on Show-Me Institute.

This chart is produced by Mark Perry at the American Enterprise Institute, and this version is an update he released in January of 2024. As he describes in an earlier blog post, there is an important pattern in the price trends: the greater the degree of government involvement in the provision of a good or service, the greater the price increase over time.

If this chart is the answer, the question would be something like “Why are free-market principles so important?”

The chart shows that between 2000—2023, inflation was 82.4 percent. Price changes over this time period greatly exceeded inflation in the following categories: Hospital services, college tuition and fees, college textbooks, childcare and nursery school, and medical care services. Housing and food and beverage prices also increased by more than inflation, but barely.

At the other end of the spectrum, prices on electronics, toys, clothes, cars, cellphone service, and household furnishings have fallen, or grown much less than inflation.

Once you see the stunning gap between goods and services in industries regulated and subsidized by the government versus goods and services in industries where the government is mostly uninvolved, it is hard to unsee it. This is just descriptive data and is not meant to be a rigorous causal analysis of the effect of government. But where there’s smoke, there’s usually fire.

This is a good reminder of the reason we fight for free-market policies in Missouri. Though often well intentioned, the government is just not very good at providing goods and services efficiently. When it gets involved, we all pay the price. Of course, there are some roles the government must handle (national security is an easy example), but for the most part, we’re better off when it stays out of the way.

The post The Power of Markets appeared first on Show-Me Institute.

Certain municipalities, such as the City of St. Louis, have mandated that if certain residential and commercial businesses engage in new constructions or major renovations, they must install, maintain, and operate EV charging stations on their own dime.

HB 2062 would provide statewide exemptions for churches and nonprofits from EV charging station mandates. But what about everyone else?

As I have written before, these types of mandates are an unnecessary government intrusion into the free market. All businesses should be protected from EV mandates—not just churches and nonprofits.

At the local level, the City of St. Louis has also included some exemptions from its mandate. Businesses that the city council has determined a visitor wouldn’t typically stay long enough at to warrant charging their vehicle are exempt from the mandate. Currently public-level charging is exceptionally slow (which is part of the reason why installing them is wasteful), but what happens when charging improves and people use charging stations during shorter stops? Will many of these businesses no longer be exempt?

A stronger version of a state law with more than just narrow exemptions would render these concerns at the municipal level moot. While it’s nice to see protections from these mandates offered to some, shouldn’t those protections be extended to all businesses in our state?

The post Protections from EV Charging Station Mandates—for Some appeared first on Show-Me Institute.

If these students do one day get into the food truck business, one thing they will learn about is government regulation. Food trucks in Missouri are overregulated in many parts of the state—sometimes they are outright banned from operating in certain cities. While everyone would agree there are some safety rules that should apply to food trucks, such as not blocking busy intersections or parking in dangerous places, many places still engage in protectionism against them in favor of sit-down restaurants.

In some locales food trucks can operate, but not within a set distance from brick-and-mortar locations. That compromise is better than a total ban, and it may be a political necessity in some cities.

How are the food truck regulations in Joplin that these students may one day encounter? The good news is that the city allows them in the first place, and there does appear to be an active foot truck scene in the community.

But the regulations for food trucks appear to be heavy-handed. Don’t get me wrong, I know they are heavy-handed for restaurants, too. The obsession with “safety” in health regulations has led to things like banning popular (and perfectly safe) bake sales at schools. For example, in Joplin’s regulations I fail to see why a food truck has to:

“report to an approved commissary daily for servicing, food prep and cleaning”

There are other regulations on the list that seem unnecessary, but that is typical for the field.

But at least Joplin kids will be able to operate a food truck if they so desire, getting a real-world education in government regulations at the same time.

The post Joplin Students Learn About Food Trucks and (Perhaps) Government Regulations appeared first on Show-Me Institute.

Well, the cap was enacted and consumers can already see the difference it’s making. I was considering an order on DoorDash and I noticed a new fee included during checkout. As shown below, I saw a “Regulatory Response Fee” included with the other taxes and fees.

When I clicked on the symbol for more information, the below image appeared:

And there it is. The new fee on customers in St. Louis City is a direct response to the regulatory cap that the St. Louis Board of Aldermen passed.

I don’t revel in this “I told you so” moment. Lawmakers thought they were protecting small businesses, but instead they are hurting consumers by increasing the prices of delivery services. If consumers respond to this by using delivery services less, the small businesses this move was designed to protect will be the ones that end up getting hurt.

Previous fees were mutually agreed upon in the market and neither party was forced to partner with the other. Consumers may have paid a portion of the higher fees before the cap, but they are certainly paying this fee now. This $1 fee may not be budget-breaking, but consumers are only subject to it because lawmakers interfered. Lawmakers should let the market work to avoid unintended though predictable consequences.

The post We’re Already Seeing the Effects of Delivery Fee Regulation appeared first on Show-Me Institute.

A paper released last month by the Mercatus Center calculates how much regulations actually increase operating costs. The authors look at federal regulations in 28 industries and find that a 1 percent increase in industry-specific regulatory restrictions in one year is associated with a 0.2 percent increase in operating costs per unit of output in that year. Perhaps that seems like a small amount, but federal regulatory restrictions grew at an average annual rate of 3.55 percent from 1998 to 2017. This means that if nothing else affected operating costs, these regulations alone would have increased operating costs per unit of output by 17 percent over the past 20 years.

The Mercatus paper addresses federal-level regulations, but it’s safe to assume that Missouri’s numerous state and local regulations also bring about significant cost increases. Over time, these regulations mean increases in operating costs for businesses, and therefore increases in costs for consumers.

All regulations come with costs, so why are Missourians paying for needless ones? It’s been months since Missouri responded to the COVID-19 crisis by waiving regulations like the one prohibiting hospitals from establishing alternative sites of care, and the one that requires Missouri real estate brokers to keep a brick-and-mortar site open during business hours. Now, we should ask why these regulations existed in the first place and why we had to bear the cost of them. Isn’t it time for lawmakers and bureaucrats to get rid of all needless regulations? Cutting the red tape can lower costs for consumers and promote growth across the state.

The post Why Are Business Regulations Bad for Consumers? appeared first on Show-Me Institute.

The government overreach here is clear: Lawmakers want to change the market and pick the winners (restaurants) and losers (food delivery services) themselves. Businesses and food delivery services have been operating with mutually agreed upon rates for years. Restaurants aren’t being duped here; they’re not forced to work with delivery services, but agree to do so in order to serve more customers. There is really no reason for the government to get involved at all.

How could this bill effect those of us using food delivery services?

If delivery fee caps are implemented, who would make up the monetary difference between the previously agreed upon service rate (which reportedly is often 25 to 50 percent) and the cap of 5 percent? It seems unlikely that food delivery services would continue business as usual after this huge hit. It’s much more likely that delivery services would increase fees for consumers (since they can’t increase fees for businesses) or reduce their now-unprofitable business dealings in St. Louis City.

We could also see less pay and fewer job opportunities for delivery drivers as food delivery services try to make up for lost earnings. This could hurt restaurants as well. If there are fewer delivery options or fees get too high, customers may simply stop ordering delivery from local restaurants.

Though intended to help small businesses, this bill could ultimately hurt consumers, delivery drivers, and restaurants in St. Louis City. I realize that we are living in unprecedented times, but we don’t want to fall into the bad habit of allowing lawmakers to control our markets. Prices should be set in the market by supply and demand and consumer preferences; lawmakers do not belong in business and market decisions.

The post This Bill Could Hurt Consumers,Workers,and Businesses in St. Louis appeared first on Show-Me Institute.

This proposal is an attempt to protect local restaurants by giving them a larger share of revenue earned, but it’s a governmental overstep; government should not be involved in these agreements between private businesses.

This excerpt from a St. Louis Post-Dispatch article highlights two important points:

 . . . depending on the contract negotiated between an eatery and an app platform, the platforms sometimes charge anywhere from 25% to 50% per item.

The first point is that the contracts were negotiated between a restaurant and a food delivery service, meaning that the delivery rates were agreed upon by both parties. Neither was forced to comply, and either could have backed out if they deemed the deal harmful for their business. Why mandate different rates when the rates were agreed to voluntarily by all parties involved?

This brings us to the second point from the excerpt: The agreed-upon delivery fees seem to be well above the proposed five-percent cap right now. The current rates, no matter how high, are the product of negotiations in the market. The five-percent cap seems to be an arbitrary number that would allow lawmakers to drastically change a market and pick winners (restaurants) and losers (delivery services).  

And what happens if we cap the delivery fee? We would probably see delivery drivers being paid less, and fewer delivery drivers in general. We would also see fewer options for delivery in the City of St. Louis, as it wouldn’t be profitable for delivery services to work with city restaurants. This industry is already struggling mightily when it comes to profit; most food delivery services lose money and the big companies stay afloat due to heavy venture capital investment.

This proposal, if passed, would be a bad move for St. Louis businesses and consumers. If two businesses have agreed to a delivery rate, why do lawmakers need to insert themselves into the situation? Lawmakers should let the market work.

The post St. Louis Lawmakers Should Stay Out of Business Decisions appeared first on Show-Me Institute.

Some were quick to argue last year that the greatest threat to affordable housing is the ending of low- income housing tax credits (LIHTC). This is demonstrably wrong. The program was fully funded up through the end of 2017; any current affordable housing shortage in Kansas City has nothing to do with a lack of state tax credits. And the data from the Missouri Housing Development Commission show that the number of housing units in the construction pipeline has not decreased since state funding for LIHTC was zeroed-out.

The simple problem in Kansas City, St. Louis and elsewhere is in part due to the high cost of housing regulations and city bureaucracy; it is simply too expensive to build so-called affordable housing.

A 2018 paper issued by the National Association of Homebuilders (NAHB) and National Multifamily Housing Council (NMHC) concludes that:

Regulation imposed by all levels of government accounts for an average of 32.1 percent of multifamily development costs, according to new research released today by the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC). In fact, in a quarter of cases, that number can reach as high as 42.6 percent.

The table at the top of this post shows the impact on housing costs of several types of government-imposed costs such as changes in building codes or requirements over and above common standards. The NAHB paper goes on to say: “Over 90 percent of multifamily developers also incur costs of delays caused by sometimes lengthy approval processes.”

A study released in 2016 concluded: “. . . on average, regulations imposed by government at all levels account for 24.3 percent of the final price of a new single-family home built for sale.”

Sometimes, exactly because the government is trying to help solve a problem, the problem becomes worse. Seattle for Growth, née Smart Growth Seattle, published in 2015:

Affordable housing projects have many unique costs, and often cost more because of financing, construction, and labor requirements. Affordable housing projects can be more expensive than market-rate due to some of these unique costs.

Regulations regarding health and safety are necessary, and one does not need to argue that housing construction should go unregulated to suggest that some obstacles are not worth the expense. Some of these obstacles, such as time spent waiting on permits and approvals may simply be due to city offices being overworked and understaffed. Cities ought to understand the barriers to housing construction and the additional costs of regulation before they act to add even more regulation or spend limited tax dollars on subsidies.

The post Want More Housing? Get out of the Way appeared first on Show-Me Institute.

The idea sounded good to me—so off we went to get the ingredients. But to no avail. You see, the North Carolina state government controls the entire liquor industry in the state. Alcohol can only be purchased at the state-run Bureau of Alcoholic Beverage Control (ABC) stores. Their inventory and prices are decided by the state and, not surprisingly, inventory is minimal and prices are high. There’s certainly no Velvet Falernum, and thus no Best Mojitos Ever in North Carolina.

Recently, it seems “privatize” and “for-profit” have become code words for evil and greedy. But the private sector does many things quite well. My daughter’s Denver neighborhood has multiple boutique liquor stores that would absolutely have Velvet Falernum. Consumer demand is met by commercial supply. In North Carolina, purchasing liquor is similar to getting a driver’s license—strictly on the government’s terms. Do we really want more government control and fewer private markets?

Would the Fourth of July have been better with the Best Mojitos Ever? If you spend it in North Carolina, you’ll never know.

The post What Works Better-Markets or Government? appeared first on Show-Me Institute.

The U.S. Labor Department has extended mandatory overtime pay to more than four million white-collar workers, including some 100,000 workers in Missouri. A new ruling from the department more than doubles the weekly threshold for salaried workers exempt from overtime pay to $913 a week (or $47,476 a year), and it requires employers to pay time and a half to employees at or below the threshold for any week in which they work more than 40 hours.

With five hours of overtime pay, a salaried worker at the threshold level will go from making $913 in a week to $1,172.

That may sound good, but it reflects a fundamental lack of understanding of what leads to wage and job growth and upward mobility for workers. It sets a new high-water mark in government meddling in other people’s business—or businesses.

As the CEO of one restaurant chain points out, the new ruling will demote thousands of mid-level managers into “glorified crew members” whose overriding incentive is to log more time rather than get results and be rewarded with bonuses and promotions.

In calling for cumbersome timekeeping systems that will rein in those who see showing initiative and always doing more than the required minimum as a ticket to success, the new ruling restricts the freedom and flexibility of employers and a large portion of their front-line managers to come to mutually beneficial agreements on compensation and working hours.

Other unfortunate side-effects will also follow. According to a National Retail Federation study, the rule will cause employers to move about a third of salaried retail and restaurant workers to hourly status. Further, it will lead to reduced hours for many of those workers and a shift to hiring more temps.

The idea that government can force businesses to take money out of profits in order to pay more to different classes of workers is itself delusional. To force any business to pay more to a worker than his or her value to the enterprise is to ensure that the business will do its best to keep employment of such workers at an absolute minimum. Unlike governments, companies that can’t make money are unable to expand, and are subject to extinction. That is especially true for low-margin, hypercompetitive businesses such as hotels, restaurants, and retailing that have been especially critical of the ruling.

The White House is saying that millions of salaried workers will get a raise under the new overtime rule. However, according to the Federation of Independent Businesses, that is contradicted by the Labor Department’s forecasts of a decline in average pay rates of newly covered salaried workers of about 5.3% in 2017.

To paraphrase Churchill, the Obama administration’s plan to order up a raise for middle-class Americans through an administrative edict is as foolish as the man who stands in a bucket and expects to lift himself up by pulling on the handle.

In fact, the administration’s plan is worse than that. At least the man who pulls on the bucket handle does not descend to a lower level. But that is exactly what will happen through the ministrations of our know-it-all government.

The post Know-it-all Government Undermines Growth and Jobs appeared first on Show-Me Institute.

We’ve written about ridesharing regulations in Missouri many times before, and we have submitted testimony on HB 2330 specifically. While state regulation of industries is not something the legislature should consider lightly, in the case of ridesharing, local government intransigence invites state-level intervention. For instance, in Saint Louis City and County, the Saint Louis Metropolitan Taxicab Commission has fought tooth and nail against the entry of Lyft and Uber. Far from embodying the ideal of local control, the commission, half of whose members are representatives of existing taxi companies, uses the state’s enabling legislation as an argument for why it cannot accommodate the entrance of ridesharing services.

The problem of local regulatory bodies trying to block ridesharing companies is not limited to Saint Louis; it's a nationwide phenomenon. In response, 30 states (including all of Missouri’s neighbors save Iowa) have approved statewide ridesharing regulations similar to those proposed in HB 2330.

Ridesharing can provide increased services and employment opportunities in Missouri’s urban areas, and efforts to allow these types of companies to operate safely and effectively could benefit the entire state. Whether or not HB 2330 becomes law, Missouri cities should reform their ridesharing regulations.

The post Ridesharing Regulations Pass Missouri House appeared first on Show-Me Institute.

African-style hair braiding, or natural hair care, is a traditional hair care practice where hair is twisted, braided, and weaved without the use of chemicals or heating. It’s often practiced by Africans, African-Americans, and immigrants. In Missouri, anyone who handles hair is required to get a cosmetology license from the government. This license requires thousands of dollars and at least 1,500 hours of cosmetology training—and teaches you nothing about African hair braiding.  

The Institute for Justice has helped Joba and Tameka file a lawsuit to allow them to continue practicing their trade without government interference. “The U.S. Constitution protects every individual’s right to earn an honest living in their chosen occupation free from pointless government interference,” says Greg Reed, an Institute for Justice attorney.

African-style hair braiding is just one example of government overreach through occupational licensing and regulation. I’ve written before about the state’s interference with yoga teacher training. We’ve also commented on proposals to license street performers, landlords, and of course the regulation of taxicabs to keep competitors like Lyft and Uber out of the market.

For further information, the Institute for Justice’s video on the licensing of African hair braiders is available here.

The post Hair Braiders’ Hands Tied by Missouri’s Twisted Regulations appeared first on Show-Me Institute.

So what forced the psychiatric emergency clinic to shut down? If you guessed government meddling, you guessed right.

Truman took over operation of the behavioral health emergency room from the state in 2009, when it was known as the Western Missouri Mental Health Center. It has served about 30,000 patients in the past six years.

Truman decided to close the ER after state and federal regulators said it would have to staff and equip the facility as a full-service medical emergency room, Truman spokesman Shane Kovac said.

“That’s a big challenge,” Kovac said. “It just made more sense to shut this down.”

The clinic's closure is a blow to the interests of mental health patients and advocates. To be clear, consolidation of medical services is not necessarily a bad thing, especially when separate operations are inefficient and wasteful. But here, government-imposed regulatory burdens created the inefficiency by requiring a clinic tailored to psychiatric patient needs to operate like a regular emergency room instead. The result: now there's no psychiatric ER at all.

It's yet another example in a long line that supports the old Ronald Reagan quip: "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help." Patients deserve better.

The post Prompted by Regulators, Truman Medical Closes Psychiatric Emergency Room appeared first on Show-Me Institute.

MTC representatives, along with other opponents of ridesharing, criticize Uber and Lyft as being unsafe, unprofessional, and discriminatory. They argue that these companies need to be regulated so these problems can be addressed. But is the MTC really effective at protecting the consumer? Let’s ask some questions:

1. The MTC, unlike Uber or Lyft, specially requires cabs to pick up any customer and take them wherever they want to go. So taxis never refuse fares or avoid going to certain neighborhoods?   
2. The MTC has rules on insurance that they claim are more comprehensive than Uber and Lyft’s policies. So cabs never operate without proper insurance?
3. The MTC has a myriad of rules to ensure cab drivers dress and act professionally. So all cab drivers provide good service?

The answer to all these is an emphatic no. Cabs have ways to refuse fares and avoid certain neighborhoods. Drivers sometimes act unprofessionally and, as an editorial in the Post-Dispatch claims, even operate without proper insurance.

The presumption that creating a regulatory commission and writing regulations will result in intended outcomes, and only intended outcomes, is an example of the “Unicorn Governance” fallacy; it’s magical thinking. In reality, even when regulators are competent, impartial, and have the public interest in mind, regulation can fail to be effective or even make matters worse. But with a regulatory body like the MTC, which has taxi company representatives as commissioners, impartiality is an unreasonable assumption. And after recent outbursts from the MTC’s chairman, competence is in question as well. Given the incentives at play, it should not come as a surprise the MTC is more effective at blocking competition than protecting consumer safety.

Market competition and open information, not regulation, are the best ways to ensure customers get a safe, comfortable ride when they want. Unfortunately, the MTC still wants to prevent that competition from coming to Saint Louis, to the continued embarrassment of the city. Saint Louisans should consider whether the MTC now does more harm than good. 

The post The Metropolitan Taxicab Commission and the Myth of Effective Regulation appeared first on Show-Me Institute.

The draft ordinance allows TNCs to apply to operate, free of charge, in Kansas City. Drivers for the TNCs must have insurance, pay a $250 annual permit fee, a $44 inspection fee, and get the medical permission to drive. If the TNC agrees to pay $10,000 to the city, individual drivers need only pay $150 annually, and they do not have to pay an inspection fee if they can provide proof of a state inspection.

Paying $294 to drive for Uber or Lyft may not sound like a lot, but the majority of ridesharing partners drive less than 15 hours a week. The higher the permit costs and ancillary requirements, the fewer drivers will be available. One might ask why, if Kansas City permits the overarching ridesharing company (who is required to perform background checks and carry insurance), the individual drivers need city permits at all? At a hearing on possible state regulation of TNCs, a representative from Kansas City’s Regulated Industries Division gave an answer to that question. The representative stated that even though the city could enforce existing safety laws it could take considerable time and effort. It is more effective for the city to be able to pull a driver permit at will. The representative worried that without the permits, the city “won’t have anything to regulate.”

TNCs aside, the proposed taxi regulatory changes are completely disappointing. Taxi permits are still capped at 500 (applicants must have at least 10 cabs to apply). Prices are still regulated, private bus routes are still illegal, and apparently Kansas City is still protecting customers from drivers wearing jogging suits. How long do Kansas City officials think that highly regulated segment of the market will last in competition with (even hampered) TNCs?

While Kansas City may be changing the name of its taxi code to “for hire vehicle code,” they are a long way from a holistic, safety-driven approach to transportation regulation. Control is still paramount for city officials, and balkanized market controls pervade the code. If officials go forward with changes as they are, they will likely cause instability and a need for further changes in the future.

The post New Kansas City Rideshare Rules Need a Rethink appeared first on Show-Me Institute.

Read the full testimony: .

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Read the full testimony: .

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Read the full testimony: .

The post The Introduction Of Taxi Regulation In The Lake Of The Ozarks (Osage Beach) appeared first on Show-Me Institute.

To read the full testimony: .

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