Some of the rich are getting poorer, and some of the poor are getting richer.

The Des Moines Sunday Register published a lead article (Page 1) titled, “The rich keep getting richer”.  (See link below.)  Included were a number of misleading statistics or misleading conclusions based on the statistics.  For example, according the think tank, Iowa Policy Project, the median hourly wage in 2016 was $16.04 per hour.  37 years ago, the average wage, adjusted for inflation, which is fair, was $15.91.  The Register concluded, “This means a typical wage earner  working 40 hours per week for a full year would have seen a real increase of $270.40 over a 37 year span.”  While the statistics are technically true, you cannot logically conclude and that any specific person or group of people did not move themselves from a lower wage to a significantly higher wage.  I’m sure it is true some people moved down while some people moved up.  An interesting study would be to see how wages correlate to the number of years in the employment market.  It would be interesting to know the median starting hourly rate for a young inexperienced worker versus and an experienced worker who has been in the labor market to 30 years.  The fact that the average stays about the same my be a problem, but almost no one stays at the average wage for 37 years.

Another statistic was that the number of people who earned $1 million or more during specific years increased from 5,031 in 2010 to 8,325 in 2015.  Their “slice” of the state’s total adjusted gross income grew 37%.  Meanwhile, the number of Iowans claiming gross incomes of $40,000 to $99,999 climbed by 23%  while their slice of the state’s total adjusted gross income fell 2%.  First, I would venture to guess that a significant majority of the $1 million+ earners are people who sold their businesses or had other one-time income.  So, again,there is no logical reason to presume that the $1 million+ club is made up of the same people year-after-year.  At the same time, from 2010 to 2015 the Iowa economy was generally continuing to improve, so values and prices of businesses likely climbed.  Also, in the case of an “expanding pie”, the fact that any group gets a smaller percentage of the total does not mean that their real income is not increasing.

Finally, the Register reported that their analysis of U.S. Census data showed that the bottom fifth of earners saw practically no growth in household income – going from $13,798 in 2006 to $13,848 in 2016, again adjusted for inflation.  Here again, there is no logical reason to believe that the specific group of people who were in the bottom 20% in 2006 are the same people who were in the bottom 20% 10 years later.  It would be interesting to know what percent of the people in the bottom 20% in 2006 were still in the bottom 20% 10 years later.   My guess is there would be some, but not a majority.

As a society we need to make sure we don’t put hurdles in front of people who are trying to improve their lot in life.  In many cases this means removing government created regulatory barriers to entry into certain jobs.  The Register has done very good work exposing job licensing regulations that are in place more to protect existing businesses from competition and to protect the profits of licensing education businesses, than to protect the public.  Yet, the Iowa Legislature has done precious little to address this real problem for low income workers who are trying to work their way up in our economy.

Link to Register article:  https://www.desmoinesregister.com/story/money/business/2017/11/25/most-iowa-wages-have-stagnated-but-rich-keep-getting-richer/818770001/

 

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We are over-licensed. We do need to reduce licensing requirements in Iowa.

Contrary to the opinion of almost every person who already has a government required license to work, many of the licenses required by the State of Iowa are not only unnecessary, their primary purpose seems to be to protect existing licensees against competition, rather than to protect the public.

I am sure that certain state licensing requirements do help to ensure the safety and quality of the service provided, but in almost all cases, private certification programs could serve the same purpose without involving the use of force by government, and without giving government backed protection to existing licensees.  A great example of this is Certified Financial Planners (CFPs).  Financial professionals who want to hold themselves to a higher standard can get this private certification, and then advertise that fact.  The same is true of Realtors.

I’m sure that many licensed professionals also have various college degrees, private certifications, and other professional credentials.  In many cases, these private credentials should be sufficient.  Those who have them should advertise the fact, and not ask government to prohibit others from competing against them.

 

 

Register link:  http://www.desmoinesregister.com/story/opinion/readers/2017/03/19/professional-licensure-protects-public/99176434/

Professional licensing gone wild!

Some of the people in my industry, home medical equipment (HME) dealers, think it would be a good thing if all HME dealers in the state were required to be licensed by the State of Iowa.  They lobbied Senator Jeff Danielson who agreed to propose Senate Study Bill 1172 (SSB1172) which, if passed, would require such licensing.  I am not aware of any patients who are calling for this.  I’m not aware of any particular problems in our industry that have resulted in harm to patients.  Almost all HME dealers are providers under Medicare, and Medicare requires all providers to be accredited by an independent accrediting agency.  The purpose of accreditation is to help ensure that all services and products are provided in a safe and appropriate manner.  It does not appear that licensing is needed for the safety of the public.  Therefore, I presume that those who advocate for this bill are hoping is will help protect existing HME businesses against new competitors.

I think they learned about this political technique for protecting existing providers against competition from the orthotists, prosthetists, or pedorthists in Iowa.  What’s that?  You say you don’t know what an orthotist, or a prosthetist or a pedorthist is?  They are medical professionals who, only a few years ago, successfully lobbied the Iowa Legislature to require a license to practice their profession in Iowa.   (You’ll need to look them up.)  The effect has been that many DME dealers are now prevented from selling specially fitted shoes to diabetic patients because they do not have the proper pedorthist license.  I had never heard of pedorthists until we found out that we had to have a licensed pedorthist in order to continue to sell diabetic shoes.  I had never heard of any complaints from the public, or of any public safety issues surrounding the sale of diabetic shoes by DME dealers.  Again, I presume that the existing businesses were trying to protect themselves against new competition for DME dealers.

Professional licensing in Iowa is out of control.  Any group that wants to prevent new competitors from entering their industry goes to the state to become a licensed profession.  This not only needs to stop, it needs to be reversed.  As the Des Moines Register has advocated, we need to go through all licensed professions to determine whether or not there is a real public safety concern that is actually solved by licensing.  If not, we need to repeal the licensing requirement.  If there is a real public safety need, then we need to make sure that the licensing requirement is limited to meeting that need, and that it does not go beyond that need in order to protect existing providers from competition.

 

Auto dealers want government force to protect them against competition

The Des Moines Register reported that the Iowa Department of Transportation, at the urging of the Iowa Automobile Dealers Association, has stopped Tesla Motors from allowing Iowans to test their all-electric car.  Under Iowa law, it is illegal to sell new cars without going through a dealer.  Auto dealers have a strong lobby in the Iowa Legislature. They want to use the force of government to prevent free market competition and voluntary free market transactions. Just like they lobby to keep it illegal for a dealer to be open on Sundays. Nobody wants these laws except the dealers.  Let your Iowa legislator know what you think.

 

Link to Register article:  http://www.desmoinesregister.com/story/money/companies/2014/09/25/tesla-test-drives-iowa-dot-west-des-moines-laws-illegal/16192477/

Welcome Uber to Des Moines!

Des Moines and surrounding communities should welcome Uber, the internet based company that coordinates ride sharing as an alternative to taxis and limousines.  Uber is now available in the Des Moines area for both drivers (car owners) and for riders.  Uber takes advantage of the fact that most privately owned cars are very under used, and that many car owners have available time to provide a ride to those who need one.  What a great way to earn extra income, or to start your own business full time.  Uber does extensive background checks on people who want to provide rides in order to ensure a high level of safety.  Beyond that, Uber actively solicits riders to rate drivers on a scale from 1 to 5 with 5 being excellent.  It has been reported that Uber stops working with drivers who’s average rating falls below 4.6.  So, Uber strives for high quality.  (Uber drivers also rate passengers, so it is possible that Uber can also stop serving customers who are abusive.)  Although Uber will be very upsetting to existing taxi companies, the City of Des Moines and surrounding communities should make whatever legal and regulatory changes are needed to allow Uber to operate in the metro area.  If Uber is not doing enough to provide for reasonable customer safety, then laws and regulations should address those issues.  Licensing should not be necessary.  Generating tax revenues or protection of existing businesses should be considered in the process of making any needed changes.

Stop auto sales prohibition!

Iowa prohibits auto sales on Sundays!  Aaron Gott’s commentary in The Des Moines Register about the unconstitutional anti-competitive protections given to automobile dealers and others was spot on.  (7/19/2013 “Don’t let laws play favorites”)  I don’t know if Iowa law prohibits automobile manufacturers from selling directly to consumers in Iowa, but if so, that law should be repealed.  I do know that Iowa law still prohibits automobile dealers from being open for business on Sundays. That law only benefits auto dealers, not the citizens of Iowa. Many businesses in Iowa would love to be closed one day a week if the government forced all of their competitors to do the same.   Our legislators need to stand up against the well funded automobile dealers and repeal this anti-consumer, special interest protection law.

Naturopathic medicine doesn’t need government help

Contrary to the letter to the Register on 5/28/2013 by Michelle Anderson, “Iowans should have access to naturopathic docs”, we already have open access to naturopathic doctors and medicines.  What we don’t have and don’t need is for our government to license practitioners and then require that their services be covered by insurance.  Individuals are not calling for licensure in the interest of public safety.  Practitioners are calling for licensure in order to have their products and services be a required service under Obamacare.  Unfortunately, as long as our government continues to use its power to force insurance companies to cover politically favored medical products and services, there will be many special interests, such as naturopathic doctors and pharmacists, who will try to get on the government gravy train.