Upward Mobility Barriers

Walter E. Williams

Let's pretend that we have the political guts to expand economic opportunities for people at the lower end of the economic spectrum. What vested interests should be attacked, and what economic regulations should be targeted for elimination? It doesn't take a lot of money to become a taxi owner-operator and earn more than $40,000 a year. One needs a car, an insurance policy and ancillary interior equipment to make a car a taxi. In New York City, to be a taxi owner you'd have to purchase a license -- called a medallion -- that in June 2012 cost $704,000. New York's Taxi and Limousine Commission restrictions that generate such a license price outlaw taxi ownership by people who don't have access to a $704,000 loan. By contrast, in Washington, D.C., the annual fee for a license to own a taxi is $125. I'll let you guess which city has more taxis per capita, cheaper fares and more black taxi ownership.

For decades, the Institute for Justice has been successfully bringing suit against egregious taxi regulations. Last year, it filed suit, Ghaleb Ibrahim v. City of Milwaukee. In Milwaukee, a taxi license costs $150,000. The suit will be argued before the Milwaukee County Circuit Court in December 2012.

Taxi regulations such as those in New York, Milwaukee, Chicago, Boston and other cities just didn't happen. There are vested interests who benefit from keeping outsiders out and therefore enrich both companies with large fleets and single taxi owners at the expense of would-be owners and the riding public through higher prices.

Suppose you are affiliated with a poor congregation and wish to sell them caskets as did the Rev. Nathaniel Craigmiles. Casket retailers neither perform funerals nor handle dead bodies, but the state of Tennessee required anyone selling caskets to be a licensed funeral director, which takes years of costly training, including learning how to embalm. The Institute for Justice brought suit, Craigmiles v. Giles, and successfully got the law repealed. The institute has attacked and is attacking similar regulations in other states.

Read the rest of the column