The Rent-Seeking Is Too Damn High | FiveThirtyEight
Occupational licensing is just one example of rent-seeking. For another, see this Aruna Viswanatha story in The Wall Street Journal on the rise of noncompete agreements in fields such as journalism and fast food. Yes, fast food: The sandwich chain Jimmy John’s has had some employees sign contracts barring them from working at any other sandwich shop near its locations. University of Maryland economist Evan Starr has found that such policies inhibit workers from changing jobs, hurting their bargaining power and thereby benefiting companies at the expense of their employees.
There is evidence that rent-seeking, in various forms, is becoming more common in the U.S. economy. In a recent paper, economist Dean Baker argued that rent-seeking has driven much of the recent increase in income inequality. And while Baker is a liberal, conservatives are also concerned about rent-seeking, such as land-use restrictions that make it hard to build housing in high-priced coastal cities. The White House is worried about occupational licensing, but it was Mike Lee, one of the Senate’s most conservative members, who called Tuesday’s hearing.