You want to help low-income Canadians better themselves and their families by advancing up the income ladder? Then cut back on the government regulations that are prohibiting them from maximizing their earning potential.
A recent Fraser Institute study, Economic Freedom Promotes Upward Income Mobility, shows that the onerous costs of regulation, including licensing and accreditation, erects unnecessary barriers to economic freedom, resulting in slow wage growth and stunted economic advancement in the labour market, one that disproportionately affects those at the bottom.
Complexity, after all, is a subsidy. Over-credentialization (requiring workers to purchase occupational license, train to acquire credentials, or to pay regulatory fees before they can work) is often an unnecessary expense that increases start-up costs for workers and entrepreneurs.
Authors Justin T. Callais and Vincent Geloso point out that economic freedom, on the other hand, is shown in many studies to be tied with numerous positive outcomes ranging from faster economic growth, to environmental progress, and greater resilience in the face of economic crises, such as the COVID-19 pandemic we are still enduring. Additionally, they find that economic freedom appears to be highly related to four pillars of social mobility: Education Quality, Lifelong Learning, Technology Access, and Inclusive Institutions.
“If governments across Canada want to help low-income Canadians climb the income ladder during the COVID recovery and beyond, they should take a second look at regulations,” the authors conclude.
