by Mitch Kokai
Senior Political Analyst, John Locke Foundation
North Carolina ranks among the nation’s top 12, when it comes to limiting the state regulatory burden for businesses. That’s according to the latest report from the Cato Institute.
Who’s the competition?
As for our other neighbors, South Carolina ranks No. 28 and Tennessee No. 31.
The worst states for regulatory barriers? Washington, Hawaii, California, New Jersey, and Connecticut.
Report author Chris Edwards explains why state-level regulatory barriers are important.
The U.S. economy was damaged by the COVID-19 crisis in 2020. Output plunged and unemployment spiked. Mandated shutdowns, social distancing, and altered consumption patterns resulted in many businesses closing permanently and laying off workers.
To replace lost jobs and incomes, the economy needs entrepreneurs to fill the void with business startups. During the economic downturn a decade ago, the business startup rate fell and never fully recovered, which contributed to a slow recovery. Even before that, the startup rate had been trending down since the 1980s. That is troubling because startups play crucial roles in the economy. They create most net new jobs. They are a key source of innovation because new products are often pioneered by new companies. And they challenge dominant firms, which helps to restrain prices and expand consumer choices.
This report argues that state and local policymakers should slash regulatory barriers to startup businesses. State governments should repeal certificate of need requirements and minimum wage laws, liberalize occupational licensing and restaurant alcohol licensing, and fully legalize marijuana and hemp businesses. Local governments should reduce and simplify permitting and licensing rules for new businesses. They should also liberalize zoning rules for home??based businesses. …
… At the federal level, the Biden administration is likely to increase regulations on businesses and raise taxes, which would undermine entrepreneurial activity. But state and local governments should move in the opposite direction and repeal unneeded barriers to new enterprises and spur economic growth.