There has been a lot of talk this summer about levying a sales tax on services and how we can balance state government budgets without taking too much out of the pockets of hardworking Utahns. As the discussion continues, we should consider some ways Utah can improve its economy for everyone, rather than just ensuring that the state coffers are always full.
How do we maintain an economy that has many ladders for people to climb up and achieve their economic goals? Whether it be stability, business ownership, a high six-figure job or a host of other things, there are a number of ways to improve the economic outlook for all Utahns.
Education is an important ladder when it comes to economic mobility. Whether young or old, your educational opportunities play a major role in your future success. Having a robust variety of post-secondary education opportunities is going to be pivotal for people to be able to succeed in the 21st century economy. The tradition of attending a four-year university has just about overstayed its welcome; trade schools, certificate programs, apprenticeships and a host of self-teaching models are the way of the future.
One of the issues the Utah Legislature has increasingly focused on in the last few years is government-mandated occupational licensure. Overly burdensome licenses often prevent people from using their practical experience and skills to enter a profession, simply because they haven’t logged enough hours in Utah, earned the right degree or paid for a legislatively anointed program. This is where competency-based licensure and private licensure would be more ideal, allowing workers to enter the market by demonstrating their ability to safely work rather than attend a class for an arbitrary amount of time.
Economic mobility is also intertwined with available housing options, and we all know Utah’s housing costs are soaring. This presents a challenge to many of our neighbors who can’t seem to get ahead because a high percentage of their income goes to housing. This increasing financial pressure makes it difficult to save, start a business or invest. Utah communities need to strongly consider easing zoning restrictions, reducing permit fees and streamlining the building process. When the demand for housing is met with adequate supply, then prices will fall back to a stable level. More families will be able to afford a home and make that investment in their future.
And let’s not forget the impacts of incarceration on economic mobility. Not only does false imprisonment or incarceration for lower-level crimes affect the individual, but their family as well. Court fees, fines and restitution payments add up and make it difficult for a person to reintegrate into society. If we want to see a lower recidivism rate, then the ladders of economic mobility need to be available to those returning to society as well.
Utah’s business climate and friendliness to entrepreneurs are vital to creating an environment that encourages economic mobility. Low business taxes and keeping it easy for someone to start a business is key. One sector of the economy that is booming with entrepreneurs is the peer-to-peer economy — allowing individuals to take their unused capital and turn it into a revenue stream.
But far too often, government regulations get in the way of people trying to make a mutually consenting exchange. Consider the early problems with Uber and Lyft, or how some cities have tried to ban Airbnb and VRBO. More recently, companies like Neighbor (share storage space) and Turo (share your car) run up against insurance regulators and threats of new laws from legislators.
Before you know it, a majority of Utahns will be participating in the sharing economy in some way. Apps like Doordash, UberEats, Taskrabbit (for handymen), Rover (for dogsitters) and many more allow a wide range of skills, time and energy to be put to use.
As our economy transforms, the policies pursued and regulations enforced by governments can either encourage or hinder the ability of people to climb the ladder of economic opportunity. Let’s make sure Utah heads in the right direction, where all have the opportunity to prosper.
Michael Melendez is director of policy for Libertas Institute.