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A Woman's Right to a Free Market

Summary:
As the mother of two daughters — and so, obviously, also as a woman — I am grateful to stand on the shoulders of giants, many of them women, who fought for the right of women to own property, to vote, and to control their own bodies. We have come a long way. But there is still room to grow.In the past, women suffered because the state treated them differently than men, out of either a misplaced sense of chivalry or outright misogyny. The old discriminatory policies usually announced themselves as such, like the ban on women owning property in their own name. Nowadays, policies tend superficially to be gender-neutral, but they often have disproportionate and negative effects on women. Here are a few examples.End Restrictive Immigration PoliciesThe convergence between men and women in terms

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As the mother of two daughters — and so, obviously, also as a woman — I am grateful to stand on the shoulders of giants, many of them women, who fought for the right of women to own property, to vote, and to control their own bodies. We have come a long way. But there is still room to grow.

In the past, women suffered because the state treated them differently than men, out of either a misplaced sense of chivalry or outright misogyny. The old discriminatory policies usually announced themselves as such, like the ban on women owning property in their own name. Nowadays, policies tend superficially to be gender-neutral, but they often have disproportionate and negative effects on women. Here are a few examples.

End Restrictive Immigration Policies

The convergence between men and women in terms of education, lifestyle and professional choices is one of the greatest advances for society. Yet it is true that for those women who decide to join the labor force, time spent on the job comes largely at the expense of time spent doing housework and caring for children — functions still mostly female-dominated.

What is clear is that working moms who have to cut back on their housework would benefit a great deal from the ability to hire workers to help them. Unfortunately, state governments’ regulations such as staff-child ratio rules and worker-qualification requirements have reduced the supply of child care providers, and hence hiked the cost of child care (see later section). While deregulation would be a great way to address some of these issues, there is no better way to solve the problem than to get rid of restrictive immigration policies, especially for low-skilled immigrants. These low-skilled immigrants are found in three major categories: child care, housecleaning, and yardwork. So increasing the supply of low-skilled immigrants would allow women to work longer hours and earn more money. It also would allow them to spend less of their free time doing housework and more time interacting with their kids (or doing whatever they actually want to do). Restrictive immigration policies get in the way of these improvements by reducing the supply of household help.

Tariffs

Tariffs are taxes on the goods we choose to buy from foreigners. They are regressive. They inflict disproportionately heavy harm on the poor. No surprise there.

You may be surprised to find out that there are also great differences in the burdens of tariffs across genders. Focusing on apparel products — which are responsible for about 75 percent of the total tariff burden borne by U.S. households — 66 percent, of the tariff burden is on women’s apparel products. According to a study by the International Trade Commission, in 2015, the tariff burden for U.S. households on women’s apparel was $2.77 billion more than on men’s clothing. This gender gap grew about 11 percent in real terms between 2006 and 2016.

And there’s a super-easy fix for this problem: unilateral elimination of U.S. tariffs. Eliminate the tariffs immediately and completely and without condition. Voila! Problem solved. No more burden and no more disproportionate damage inflicted on women.

War on Drugs

Here’s a government policy that might be more devastating to women than any other: the war on drugs. Because of mandatory minimum sentences, prosecution of low-level drug offenses, increased conviction and imprisonment of those with relationships to drug dealers, and the treatment of drug addicts as criminals, the number of incarcerated women has skyrocketed since 1980.

For instance, female prisoners are more likely than male prisoners to be serving time for drug offenses (25 percent vs. 14 percent in state prisons, 56 percent vs. 47 percent in federal prisons), even if men still account for the vast majority of drug offenders in prison (88 percent in state prisons, 92 percent in federal prisons).

This is a slight improvement over the past. The number of women serving time in state prison for drug offenses has fallen slightly (by about 7 percent) since 1999, while the percentage of female state prisoners serving time for drug offenses has fallen more sharply, from 34 percent to 25 percent. The overall percentage of state prisoners serving time for drug offenses fell from 21 in 1999 to 15 in 2015. The share of federal prisoners serving time for drug offenses also has declined, from 57 percent in 1999 to 47 percent in 2016. But that’s still too much, especially for victimless crimes that shouldn’t even be crimes.

As you can imagine, when women leave prison, they face many barriers to obtaining housing, employment, and education. As I wrote a few years ago over at Reason:

"As Harvard University sociologist Bruce Western and University of Washington sociologist Becky Pettit showed in a 2010 study published by the Pew Research Center, incarceration has a lasting negative impact on inmates’ earnings. Taking age, education, school enrollment, and geography into account, they found that past incarceration reduced subsequent wages by 11 percent, cut annual employment by nine weeks, and reduced yearly earnings by 40 percent."

And their kids are victims too, I added:

"Incarceration also has consequences for families. According to “Caught in the Net,” a 2005 report from the ACLU, two-thirds of female state prisoners are the mothers of minor children — kids who become indirect victims of a cruel and unfair policy."

Criminal-justice reform and ending the war on drugs would address many of these problems. As I have written here, there is hope on the horizon after the recent midterm elections.

Regulation

Workplace regulations make women’s lives harder as well. Because women exit and re-enter the labor market (for maternity leave or to take care of their children) more frequently than men, they suffer disproportionately from labor regulations that restrict workplace mobility.

Women also suffer from idiotic state regulation of the child care industry.

Rules like staff-to-child ratios and work-qualification requirements restrict the supply of child care and jack up the price significantly. Cato Institute’s Ryan Bourne writes, “According to 2016 data compiled by Child Care Aware, the average annual cost of full-time center-based infant care varies dramatically nationwide, from $5,178 in Mississippi to $23,089 in the District of Columbia. That amounts to 27.2 percent of median single-parent family income in Mississippi and fully 89.1 percent in D.C.”  

Not surprisingly, these high costs are particularly hard on poorer people and single mothers. 

Staff-to-child ratios could be relaxed to increase supply and lower cost without impacting quality. Bourne cites a few studies to that effect:

"Mercatus Center economists Diana Thomas and Devon Gorry, for example, estimate that loosening ratios by just one child across all age groups would result in prices falling by 9 percent or more. That’s over $2,000 per year for a family using full-time infant-center care in D.C. Requiring lead teachers to have high-school diplomas likewise raises prices by between 25 percent and 46 percent.…

"It’s a matter of supply and demand, as research by economists Joseph Hotz and Mo Xiao shows. They find that tightening the staff-child ratio by one child reduces the number of child-care centers in an average area by 10 percent with no apparent impact on quality. Increasing the average required years of education for center directors by one year has modest positive effects on quality, but likewise reduces the number of centers by between 3.2 percent and 3.8 percent."

And then there are occupational-licensing laws for child care providers. Each state has its own set of regulations for licensed daycare providers and makes it illegal to operate an unlicensed child care operation with the exception of caring for a few children in a home setting. We are told that the need for licenses to work comes from the necessity to protect consumers (parents and children) and guarantee quality. Yet while those licenses do not deliver on that front, they are effective at protecting workers from competition in the child care industry, reducing the supply of child care, and forcing consumers to pay higher prices. Women who want to join the labor force or work more are the primary victims of these idiotic rules.

Women suffer all the normal barriers to entry that men do. But in addition, professions dominated by women tend to require licensing more often: 28.1 percent of employed women have a license as compared to 23.2 percent of men. These licensing requirements create a heavier burden for women entering or re-entering the workforce than for men.

Absurdly, many low-risk occupations dominated by women have ridiculously high licensing requirements. For example, some states require a license for braiding hair, even if the service offered involves no cutting of hair (no sharp object), heat-related treatments such as straightening, or chemical treatments such as coloring.

Missouri requires 1,000 hours at a school of cosmetology or 3,000 hours in an apprenticeship, as well as a written exam, and a practical exam. Can you believe this? This training and these exams require that a woman who wants to open a business that involves practically zero risk to her or her customers must nevertheless spend bizarrely large amounts of time and money on “training” that imparts no knowledge of any practical value.

State-granted licensing is an unfair protection against competition and should be removed entirely. The private sector can provide necessary licensing for those professions where consumers demand them.

I could go on and on. I would like to end with a warning. There is a worrisome trend in the conservative movement today to demand protections for women in the name of promoting families and children. The most recent example is the push that the federal government implement a paid family leave law. The proposals range from straight-up government provision of paid leave to using Social Security to pay for the benefit.

Paid Leave Policies Will Backfire

Unfortunately, these provisions will not only over time grow the size and scope of the federal government, but they are guaranteed to produce bad outcomes. They already have in Europe, where they have been implemented at large, as well as in the states that have family leave policies. Government mandates that force employers to offer lengthy maternity leaves make hiring women of childbearing age less appealing.

As a result, women are more likely to be unemployed or to see their cash compensation reduced, whether they want to have children or not. I recommend the work of MIT economist Jonathan Gruber that looks at real wages for women in the 1990s in states that require comprehensive employer-supplied maternity expenses. He finds that their compensation fell compared to compensation in states that don’t have such requirements.

I also recommend the work of Cato Institute’s Vanessa Brown Calder and the Heritage Foundation’s Rachel Greszler on this issue. The bottom line is that conservatives and others need to resist the temptation to protect women through government policies.

Women have come a long way. Isn’t it ironic, then, that women’s freedoms are today being constrained by misguided government policies enacted in the name of increasing that freedom? In other words, there are still battles yet to be won and disasters yet to prevent.

Photo credit: Drew Angerer/Getty Images

Veronique De Rugy
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.

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