Occupational licensing reduces economic mobility

,

Gov. Chris Sununu signed a bill this week to make permanent the emergency changes expanding telemedicine services. The restrictions on telemedicine were not primarily to protect patients. They were to protect medical providers from competition. When the state makes it illegal to see a Boston doctor via video, patients have to see their local physicians. 

Prohibitions on the practice of telemedicine are an extension of occupational licensing laws. Everyone knows you have to have a state medical license to practice medicine. But licensing laws also have prevented people from consulting online with doctors who are licensed in other states, even though technology makes this easy.

The percentage of occupations that require a state license has exploded, going from about 5% in the early 1950s to about 20% today. Economists have suspected that the growth in state occupational licensing laws has contributed to the decline in American mobility. If you’re licensed in one state, moving to another state can mean starting the licensing process all over again, as many states don’t recognize other state licenses. 

A study published this week by the National Bureau of Economic Research supports that theory, concluding that licensing could account for about 8 percent of the decline in mobility. 

Researchers Morris Kleiner of the University of Minnesota and Ming Xu of Queens University studied occupational license requirements in U.S. states from the 1980s through 2016. They found that “licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year.”

As they wrote, “occupational licensing has a strong and negative effect on worker labor market flows, but is associated with higher wage growth, whether a worker is staying in a licensed occupation or switching into a licensed occupation.”

The connection to higher wages has been well established. When the state erects a large barrier to entry for an occupation, thus restricting the supply of practitioners, compensation for that occupation rises. Who pays for that? Consumers do. And the costs outweigh the benefits.

“Existing studies have yet to find a definitive link between licensing restrictions and their stated purpose of improving service quality,” Utah State University researchers concluded in 2018. 

Though improved quality is not evident, the barrier to entry created by licensing laws is significant. Kleiner and Xu find that “occupational licensing represents a barrier to entry for both unemployed workers (1.2% lower entrance rate) and workers who enter from other occupations (24.1% lower entrance rate).”

So not only are occupational licensing laws increasing consumer costs without demonstrating improvements in service quality, they’re also harming the broader economy by reducing economic mobility. 

This hurts New Hampshire, which relies on migration for economic and population growth. New Hampshire has the second-lowest fertility rate in the nation (behind only Vermont). A UNH Carsey Institute analysis of Census data earlier this year showed that New Hampshire would have lost population in recent years were it not for people moving here from other states. 

Occupational licensing laws, both in New Hampshire and elsewhere, make it harder for people to move here and to find work if they do. That has a negative effect on our economic growth. 

We can add this to the long list of reasons why lawmakers should reform the state’s occupational licensing laws. 

/by

Impose $200 million in PFAS cleanup costs with no idea what the benefits are? Whatever

,

Sometimes, the bills everyone is afraid to vote against are the ones we should worry about the most. The PFAS bill passed 23-1 in the Senate last week is a great example. 

If you haven’t followed the Saga of the State PFAS Standards,* well, you’re probably a normal human being with a happy life, and we’re sorry to bring it up. Just know that it’s less complicated than the plot of Twin Peaks, but more complicated than Bulgaria’s relationship with Turkish soap operas.

Because we know you’re rushing out the door to enjoy in-person restaurant dining before Shutdown II: Corona Boogaloo starts, we’ll try to keep this as short as a Looney Toons episode with all the violence removed. 

The state Senate recently bundled into House Bill 1246 a bunch of PFAS-related bills for rapid passage in the coronavirus-shortened legislative session. We’ll focus on just one section of this bill: the part that writes PFAS maximum contamination levels (MCLs) into law.

The bill adopts the MCLs issued by the state Department of Environmental Services last year. These standards are, to be diplomatic, of questionable scientific legitimacy. 

The allowed parts per trillion (yes, trillion) are many times lower than the Environmental Protection Agency’s guideline levels and are based on animal tests and a questionable model adopted by one state (Minnesota).

Moreover, the costs are enormous and the benefits unknown — despite the fact that the department was required by law to conduct a cost-benefit analysis. 

The department estimated the costs at $190 million. That’s a gigantic sum. Though the point of a cost-benefit analysis is to determine whether the benefits are worth the costs, the department offered only a qualitative, not a quantitative, analysis of the benefits. That is, it couldn’t put a price tag on the benefits it claimed would result from these lower levels. 

“Any rational interpretation of the statute requires more,” a judge ruled last November in a lawsuit challenging the inadequacy of the cost-benefit analysis. That lawsuit is pending before the state Supreme Court. 

In the absence of a quality state analysis, the New England Ratepayers Association hired an economist to do one. It estimated the benefits to range between $2.6 million and $8.0 million per year, far lower than the estimated costs of $11.6 million to $23.2 million per year.

Usually, legislators will wait for a court ruling before moving forward with legislation in situations like this. Not this time. 

Writing these incredibly low and costly MCLs into law now, before the Supreme Court has determined whether their adoption was done legally, is foolhardy. 

Writing them into law without having any evidence that the benefits will outweigh the costs is reckless. 

Writing them into law without really knowing whether levels that low and that expensive are absolutely necessary to protect public health is sloppy.

These are only some of the problems with one section of this PFAS bill.

Given the poor state of municipal and business budgets this year, adding these additional costs now will only push local governments further into the red. There’s a very real possibility that the cleanup costs associated with these mandates will combine with other budget difficulties to trigger property tax increases. 

Waiting six months for the economy to recover further and the Supreme Court to act would be the prudent move. (But this is politics. If you want prudence, buy The White Album.) 

Legislation this foolhardy, reckless and sloppy usually meets more than token opposition. But this bill is expected to pass easily next week. 

Maybe, a few years after it passes and municipalities have spent tens of millions of dollars to meet its mandates, triggering property tax increases, we’ll finally get that complete and legally required cost-benefit analysis from the department.

*Rumored to be the title of Bob Dylan’s new 37-minute-long single. 

/by

Senate beclowns itself with comically unserious unemployment proposal

,

Institutions and those entrusted with their care have beclowned themselves so regularly over the years that Americans have lost faith in almost all sources of authority. In this environment, the New Hampshire Senate this week surveyed the cultural scene and said, “hold my beer.”

It’s hard to say what will be hurt most by the unemployment legislation the Senate’s Democratic majority passed on a party-line vote on Tuesday: New Hampshire businesses or the reputation of the New Hampshire Senate.

House Bill 1166, a hodgepodge of business mandates and impermissible exemptions to federal unemployment policy, is an absurdity that defies all attempts at reasonable explanation. In its totality, it is a stunning example of politicians choosing showmanship over the public official’s duty to govern.

On its face, the bill is a direct assault on New Hampshire businesses struggling to survive the coronavirus-caused recession. It would cost New Hampshire employers hundreds of millions of dollars, potentially triggering numerous business closures.

“I feel it kicks the businesses while they are down,” Wendy Hunt, president of the Greater Merrimack-Souhegan Valley Chamber of Commerce, wrote in testimony submitted to the Senate Commerce Committee. “It is the OPPOSITE of what the legislature should be doing for our business community.”

If it becomes law, the bill would burden employers with higher costs. But  some of the worst parts of the bill would have a limited effect because they are really a publicity stunt disguised as legislation. The very legislators who champion the bill as a necessary protection for New Hampshire workers inserted a provision to prevent many of those alleged protections from taking effect.

Huge costs and violations of federal labor policy 

At the Senate Commerce Committee on June 5, Deputy Employment Security Commissioner Richard Lavers explained how the bill’s excessively generous rewriting of state law on unemployment benefits would violate federal guidance, putting the state out of compliance with U.S. Department of Labor policy and causing the loss of federal money.

The bill lets an employee remain eligible for unemployment benefits if he or she “leaves employment due to a reasonable risk of exposure or infection, including self-quarantine, or to care for a family member, and either does not intend to return to the employer or the employer will not allow the individual to return.”

Federal guidance states that employees able and available to work are not eligible for benefits. The bill would let employees collect unemployment if they are able and available, and even if they do “not intend to return to work.”

“This one is not allowed,” Lavers told the committee. The eligibility provision “would also have what I assume is an unintended consequence of taking people that are now eligible for federally paid PUA and putting them on state UI that would have to be paid out of the state trust fund.”

That is, the bill moves people from federal Pandemic Unemployment Assistance to state-paid unemployment insurance benefits, causing a more rapid depletion of the state Unemployment Trust Fund, which is already expected to run out of funds by the end of November.

The bill also would make employees automatically eligible for unemployment benefits for certain COVID-19-related reasons, again in violation of U.S. Department of Labor guidance, and eliminate the one-week waiting period before benefits start.

“The main issue is that this provision, and I’m not speculating here at all, I’m not relying upon old guidance from the federal government, I’m relying on guidance issued one month ago today issued by the Department of Labor. This provision would make New Hampshire be out of compliance with U.S. Department of Labor, and we would be out of conformity with U.S. Department of Labor,” Lavers told the committee.

“That puts our federal grant funding in jeopardy.” he explained.

Going out of compliance with federal guidance “would mean that New Hampshire employers would no longer be eligible for their 90% reduction in their federal unemployment tax obligations,” Lavers said. “This would cost New Hampshire businesses over $200 million a year…. This is what they are telling states. They are cautioning states: Don’t do this.”

The committee’s response to these warnings was to insert a self-destruct button into the bill.

“In the event the United States Department of Labor provides a written notice to the New Hampshire department of employment security that any specific statutory change in this act will result in the loss of federal funding to New Hampshire then that specific statutory change, and that specific statutory change only, shall be inoperative,” an amendment introduced by Sen. Jon Morgan reads.

The “inoperative” clause is a case study in political cynicism. It could have one of only two outcomes. Either it makes those provisions instantly ineffective, in which case there’s zero point in passing them, or it makes them effective only for a brief period until an inevitable federal notice arrives, in which case there’s zero point in passing them.

No one seems to have checked with staff attorneys to find out how the provision would work. We did.

The language does not make the provisions Lavers warned about automatically inoperative based on guidance already issued by the Department of Labor. It would make them inoperative only after the U.S. Department of Labor issues additional written notice to the state, according to legislative staff.

So the self-destruct button would be triggered only after the bill had begun to damage the economy.

This is not governing. This is playing politics with New Hampshire’s economy.

Diverting $50 million from COVID-19 relief to a state department

The political games don’t end there.

The bill directs $50 million in federal CARES Act relief money to the Department of Employment Security for the purpose of upgrading its computer system. 

But the department does not need or want the money. Its system was already upgraded with federal funds.

“New Hampshire is one of 16 states with a modernized unemployment benefits system,” Lavers told the Senate Commerce Committee on June 5. 

The department replaced its computer system in 2009 and has enhanced it every year since with federal grant money, he said. 

“We were paying benefits under the CARES Act before the CARES Act existed because of our modernized system,” Lavers said. “We do not need money for this purpose from the limited amount of money that are left in the CARES funds.”

Why in the world would Senate Democrats divert $50 million in coronavirus relief money to upgrade a computer system the that was already upgraded with federal money?

It turns out that Sen. Dan Feltes, who co-sponsored the legislation, has made upgrading that computer system part of his gubernatorial campaign. He claimed in April, without evidence, that the governor failed to upgrade the system that the department says is fully upgraded. 

More ignored warnings

The remainder of the bill is filled with provisions that senators were warned would hurt New Hampshire individuals and businesses.

Tyler Brannon, director of health economics at the N.H. Department of Insurance, told the Senate Commerce Committee that the provision mandating private insurance coverage for COVID-19 treatment and testing was unnecessary and would help unscrupulous companies at the expense of Granite Staters. 

Insurers already voluntarily cover COVID-19 testing and treatment at no cost, and the state’s emergency order mandates coverage for out-of-network providers if no in-network providers are available. 

The bill goes further to mandate coverage for out-of-network providers at any time and force insurers to cover “any out-of-network charges.”

“The requirement will allow for price gouging by out-of-network providers, and it’s likely to benefit opportunistic, out-of-state companies at the expense of New Hampshire premium payers more than it is going to benefit New Hampshire members,” Brannon explained.

His warning was ignored and the provision was left in.

Another provision extends the federal Family and Medical Leave Act to businesses with as few as 15 employees “for any employee in quarantine, or covered family member in quarantine, for coronavirus or COVID-19, or for a COVID-19 related reason, as directed by a medical provider or under government direction.” 

Not even Congress would force businesses smaller than 50 employees to bear the costs of the Family and Medical Leave Act. This provision could impose significant costs on small, mom-and-pop businesses that have only a few employees.

With a laundry list of additional costs being dumped on employers even before many are allowed to open at full capacity, the bill drew sharp criticism from business owners and groups. 

The bill “will cause a significant increase to unemployment insurance taxes right when businesses are stretched thin and face significant losses already,” Ashley Haseltine, president of the Derry Londonderry Chamber of Commerce wrote.

Chris Woods, president of Advantage Insurance in Merrimack, submitted written committee testimony that the bill “will cost NH businesses who are already struggling additional money while incenting individuals to not go back to work.”

The Senate’s only response to these warnings came Tuesday when two Democratic senators, Sen. Shannon Chandley and Sen. Jeanne Dietsch, voted with Republicans to strip a provision mandating an additional $100 a week in unemployment benefits. That provision would have cost N.H. employers $53 million through the end of 2020 alone, the Department of Employment Security estimated.

The exact costs of the bill are not clear. As with other amended bills rushed through on Tuesday, it contained no fiscal note. 

New Hampshire employers are struggling to survive an economically devastating 2020. They, and the employees they want to rehire, deserve lawmakers who take this moment seriously and who seek to help. Instead, senators are playing tricks with exploding bills and vanishing promises. 

/by

House passes JBC-recommended growler legislation

In a contentious return to in-person legislating Thursday, House Republicans and Democrats traded barbs and accusations and got little accomplished. But they did agree on one thing — beer.

Representatives voted 243-92 to approve House Bill 1717, a bill to permit bars and restaurants to sell draft beer in growlers during a declared state of emergency. 

This was the first suggestion made in the Josiah Bartlett Center’s report on how to help restaurants survive the emergency shutdown orders, released in April. 

Our report explained that bars and restaurants were left with thousands of dollars worth of keg beer they couldn’t sell under emergency restrictions because state law forbade them from selling draft beer in any kind of to-go container, including growlers. Growlers are glass beer bottles, typically 64 ounces, with screw-on caps.

HB 1717, introduced by Rep. Andrew Prout, R-Hudson, also allows bars and restaurants to fill growlers with a different beer than is on the growler label. Normally, restaurants have to match the beverage to the label on the container, for obvious reasons. This exception lets bartenders fulfill a customer’s request to, say, fill a Shipyard Brewery growler with a Poppy’s Moonship On Blackberry ale by Schilling Beer Co. 

This change would’ve helped restaurants over the last three months had it come in an emergency order. Beer that was on tap in March and early April already has been poured out. Massachusetts beat New Hampshire to this and allowed growler sales in March. 

It’s a shame this legislation comes just as the stay-home order is set to be lifted, but it’s encouraging that a majority of representatives see the need for it. 

The next step is to remove the restriction tying growler-filling to an emergency order. State law already allows patrons to take home opened bottles of wine, provided they are kept out of the reach of the driver. It also allows individuals to purchase filled growlers direct from breweries. There’s no justification for prohibiting growler sales at restaurants. 

/by

The justifications for prolonged closures are unraveling

, ,

When the governors of Florida and Georgia announced that they would reopen their economies, the predictions of mass mortality were immediate. In April, a writer for The Atlantic hysterically labeled Georgia’s reopening plan an “experiment in human sacrifice.”

In the weeks that followed, the mortality surges never happened. 

Digging through COVID-19 mortality data this week, we noticed something that to our knowledge had not previously been highlighted. There have been fewer COVID-19 deaths in Florida, Georgia and Colorado combined (three states criticized for opening “too early”) than in New York nursing homes alone. 

The absence of a mortality surge is finally getting the attention of network TV news and other national media. ABC News’ lead medical reporter Eric Strauss tweeted on Thursday, “JUST IN: @ABC looked at 21 states that eased restrictions May 4 or earlier & found no major increase in hospitalizations, deaths or % of people testing positive in any of them. [SC, MT, GA, MS, SD, AR, CO, ID, IA, ND, OK, TN, TX, UT, WY, KS, FL, IN, MO, NE, OH.”

Politico Magazine on Thursday published a long essay on Colorado, “the blue state that gambled on an early reopening.” 

Colorado’s Democratic governor, Jared Polis, “moved to lift stay-at-home orders not only well before other Democratic-leaning states, but ahead of Republican-led Georgia, Florida and Texas,” Politico pointed out. And he had a plan. 

Polis, “instead of looking most closely at case and death counts, which lag behind the reality on the ground… focused on bringing down the virus’ transmission rate from one person infecting up to four others to one person infecting just one other person, which the state managed in April. As officials added thousands of temporary hospital beds, the governor also closely tracked the daily hospitalization rate, which had begun to slow by the time he made his April 20 announcement.”

Using realistic metrics that indicated how much of a public threat the virus was, Polis determined early that reopening could be done without causing an unmanageable surge in transmissions or hospitalizations.

The result? 

“An average of just 4.64 percent of people tested over three days ending Tuesday were positive for COVID-19. That’s the lowest since the state started tracking a three-day average of positive cases back on March 10,” Colorado Public Radio reported on Wednesday.

Colorado is still experiencing outbreaks in places like meat packing plants, prisons, a grocery store, and an office. But those outbreaks are not spiking overall transmission rates. “While outbreaks continue to occur, overall, the number of new cases reported to the state continues to drop,” the Colorado Public Radio report concluded.

Many Colorado businesses have been operating under capacity restrictions. But by identifying meaningful, reasonable metrics to guide the reopening, the state was able to begin its economic recovery early and eliminate some of the uncertainty for business owners. 

New Hampshire Gov. Chris Sununu has managed a difficult challenge with great skill and has listened to business owners, adjusting some regulations and guidance after seeing how harmful it could be. Bringing business and community leaders into the decision-making process by creating task forces has allowed a greater degree of citizen input and prevented some of the more restrictive regulations seen in other states.

Yet it is not clear what data are guiding New Hampshire’s approach and what the precise goals are. Business owners and employees remain frustrated because the state has offered little clarity on how emergency rules are to be lifted. 

Initially, the state’s emergency measures were focused on ensuring adequate hospital capacity in case of a surge of COVID-19 cases. The curve flattened weeks ago and the anticipated surge never happened. This week the governor ordered 10 of the state’s 14 overflow hospital sites closed.  

Yet the governor also extended his emergency order and the stay-home order this week. People see the numbers going down, the curve flattened, but emergency orders and restrictions remaining in place.

Asked on Tuesday what data the state is using to guide its decision-making, Health and Human Services Commissioner Lori Shibinette struggled to give a coherent answer. After being asked several times about the state’s declining infection rate, she seemed to say that the state’s goal was to prevent every long-term-care facility employee from getting infected.

“Those caregivers are part of our communities. So, as long as there’s still COVID circulating in our communities, there is always a risk of bringing it into a nursing home. And there is always a risk of negative outcomes,” she said. 

Ensuring that no long-term-care facility staff become infected cannot be the goal. It’s an impossible target. 

The governor on Friday offered some clarity, saying that “flattening the curve” to keep hospital capacity available remains the goal. With the curve already flattened, the state is striving to prevent a new surge from overwhelming the hospitals, he said.

The governor added in response to a question that the guiding data are the percent positive and the hospitalization rate. Yet state officials still have not explained exactly what the state’s target numbers are. 

Without clarity on the state’s targets, people will continue to be frustrated and anxious, and business owners will be unable to plan.

As the state’s own chart below shows, New Hampshire’s rate of positive COVID-19 test results has trended downward for weeks and is below 5%, about the same as Colorado’s. The state has 110 hospitalized COVID-19 patients, well below capacity. By any of the standard metrics, the state’s numbers have been trending in the right direction for weeks. 

 

Yet economically crippling restrictions on business and personal activity remain, imposing enormous costs. In April, the state counted 101,490 newly unemployed Granite Staters, for an unemployment rate of 17.2%. It’s worse up north. Coos County’s unemployment rate hit 22.6% and Carroll’s 24.3%. 

There’s little reason to believe that, say, Coos County retail and restaurant employees have to lose their jobs to protect the state’s vulnerable population, most of whom are elderly residents of long-term care facilities and individuals with co-morbidities. 

The overwhelming majority of New Hampshire’s coronavirus deaths (78%) have occurred in long-term care facilities, and 77% of deaths were associated with a cluster, meaning three or more cases in a single workplace or facility. 

Community transmission accounts for 20% of New Hampshire hospitalizations and 13% of deaths. Clearly, a vulnerable individual can contract the virus out in the community, get sick, and die. But the available data suggest that this risk is very low and that these individuals can be protected through less drastic measures.

Japan offers a case study. On Tuesday, Science magazine reported that Japan had ended its state of emergency, having achieved its public health goals without ever issuing a lockdown.

“It drove down the number of daily new cases to near target levels of 0.5 per 100,000 people with voluntary and not very restrictive social distancing and without large-scale testing. Instead, the country focused on finding clusters of infections and attacking the underlying causes, which often proved to be overcrowded gathering spots such as gyms and nightclubs.”

Japan lacks the legal authority to impose mandatory lockdowns, so instead it focused on educating the public about mask-wearing and avoiding the “three Cs”—closed spaces, crowds, and close-contact settings. 

These are specific, attainable, and goal-oriented guidelines. They are easy for the public to understand, and they allow business owners and employees to participate in the process. If the state publicized that the economy could fully open when X and Y metrics were met, and initiated a high-profile publicity campaign to encourage broad public participation in reaching those goals (by wearing masks, social distancing, not forming large crowds, etc.), everyone would have clear goals they could work toward together. 

Instead, the public remains in a state of suspense, waiting anxiously each week for new reopening guidelines segregated by industry. 

As we’ve recommended before, the state’s focus should be on encouraging socially responsible behavior. Many businesses that are closed or partially closed now can open responsibly, posing little risk of creating mass outbreaks, if the state devotes its resources to education, instruction, and assistance rather than categorical business lockdowns. 

The longer the state continues this slow lifting of restrictions, the worse the economic damage will be and the more frustrated members of the public will become.   

 

/1 Comment/by

State revises child care reopening rules to focus on flexibility, remove mandates

,

Typically, government regulations take a long time to implement and an even longer time to remove. In an emergency, though, both of those time frames are dramatically reduced. This week offered a case study in the perils of rapid regulation and the benefits of flexibility after rules are put in place.

On Monday, the state issued a guidance for the reopening of child care centers. It was the most rigid and inflexible in New England. Though most New England states — and the Centers for Disease Control and Prevention —have relied on recommendations to guide child care centers through coronavirus protocols, New Hampshire included several mandates. 

Child care directors immediately flagged those mandates as impossible to implement.

The state guidance, for example, stated that programs “must reduce group sizes and limit child care rooms to no more than 10 people total, including children and adults.” 

It further mandated that staff wear masks “at all times while at work” and that centers “consistently keep the same groups of children and staff together (i.e. do not float staff, do not move children between rooms/groups).”

That’s the type of regulation that sounds great to a public health official, but has obvious flaws. Child care providers pointed out to the Josiah Bartlett Center earlier this week that the rules would literally prohibit staff members from eating or going to the bathroom while at work. If staff members can’t cover for each other, there’s no ability for a bathroom break. 

The inflexibility of the rules drew a swift and widespread rebuke from child care operators, who flooded the governor’s office and the Department of Health and Human Services with complaints. The Bartlett Center published a story on Thursday pointing out that the mandates would make thousands of children lose their spots at New Hampshire child care centers. 

“We listened to folks over the last couple of days. We had a lot of input,” Gov. Chris Sununu said on Friday.

Lisa Cormier, director of St. Peter’s Home in Manchester, the largest child care center in the state, said the mandates were disappointing because they would do the opposite of what they were intended to do.

“The point was to make people more comfortable with child care so they would go back to work,” she told the Josiah Bartlett Center. “But instead, it’s cut us off at the knees.”

The governor on Friday said the new rules incorporated that feedback and focused on flexibility and availability.

“We want to make sure that child care is available, and we want to make it flexible,” he said.

In an emergency, regulations do not have to go through the normal regulatory process, which was clearly a problem with the initial child care guidance. The speed with which these rules were put in place, and the shortage of industry feedback, guaranteed a disaster if they were fully implemented.

The benefit of emergency rules, though, is that the lengthy rule-making process in place during normal times is not required for making adjustments. So the state was able to take input from child care operators and change the rules within five days. Normally, this would take months. 

The biggest flaw in the initial child care regulations was the refusal to trust providers to manage their own facilities based on state guidance. Mandates stem from an absence of trust. Thankfully, providers caused a stir and the state responded appropriately. That’s something for those in other regulated industries to remember.    

/1 Comment/by

N.H. day care reopening rules would send thousands of children home

,

If the state regulations for reopening child care centers take effect as issued, 165 children at the state’s largest child care center would lose their spots and have to stay home. And they aren’t alone.

“St. Peter’s would lose 165 spots. That’s over half our enrollment,” Lisa Cormier, director of St. Peter’s Home on Manchester’s West Side, told the Josiah Bartlett Center. “People look at it from the financial standpoint, but it’s 165 children that now have no place to go.”

“The point was to make people more comfortable with child care so they would go back to work. But instead it’s cut us off at the knees. At St. Peter’s, it’s 165 kids, but it’s literally thousands across the state.”

The new child care guidance, issued Monday, imposes social distancing mandates that exceed the child care guidance issued by the U.S. Centers for Disease Control and Prevention as well as the regulations imposed by other New England states. They would be the most severe child care restrictions in the region. 

The CDC guidance consists largely of recommendations, not mandates. For example, the CDC recommends that sleeping mats be “spaced out as much as possible, ideally 6 feet apart.” It doesn’t mandate, or even recommend, maintaining six feet between children otherwise. 

Instead, the CDC recommends keeping kids in the same groups throughout the day and not mixing groups in common areas.

New Hampshire’s far more rigid guidance mandates that no more than 10 people, including teachers, be in any one room at any time, and that children be spaced at least six feet apart at all times whenever possible.

For day care operators that have been open throughout the emergency, like St. Peter’s Home, that means cutting class sizes by more than half. If a room has two teachers, it can have a maximum of eight students, down from around 20 before. 

The rules also require that children be seated at least six feet apart during meals and that they eat in the classrooms, not in a communal cafeteria.

“Our tables are four and a half feet,” Cormier said. “So, I’m not sure if they want them eating on the floor, if they think that’s more sanitary?”

The mandates forbid floating staff from one room to another, which means no staff member can cover for another for any reason throughout the day.

“it’s not going to let teachers take a break. It’s not going to let teachers go to the bathroom,” Cormier said.

A review of child care reopening rules in other New England states shows New Hampshire’s new rules to be the most restrictive and least flexible of those issued so far. 

Rhode Island and Connecticut mandate a 10-child maximum per room, but don’t contain as many additional mandates.

Vermont limits class sizes to 25 and recommends, but doesn’t mandate, six-foot distancing between individuals. Maine has issued a single-page guidance recommending basic sanitation and hygiene practices and relaxing some staff-to-child ratios. 

Massachusetts closed day cares during the initial shutdown, leaving only some designated emergency day cares open. Its rules for day care reopening have not yet been issued.

Day care operators were aware of the guidance in other states and were surprised that New Hampshire’s rules were so limiting. The state has been flooded with phone calls from day care operators this week, to the point that the state has suspended implementation of the rules (which were to take effect on Monday) and Gov. Chris Sununu on Wednesday said the state would consider revising them. 

“We’re e hoping that they’re going to go more toward Vermont, who is allowing 25 in a room,” Cormier said. 

“Those of us who’ve been open all along have struggled through for 10 weeks with no regulations, and all of a sudden what’s come out has been very difficult.”

Despite being open throughout the entire state of emergency, St. Peter’s has not had a single COVID-19 infection, Cormier said. The state Department of Health and Human Services did not return a request for information on how many COVID-19 cases have been associated with child care centers in New Hampshire. 

Child care centers generally have not been associated with large outbreaks of the disease. 

“We have not seen large numbers of cases in daycare centers of COVID, Deidre Gifford, acting commissioner of the Connecticut Department of Public Health, was quoted in the Connecticut Mirror as saying earlier this week. “They do report to DPH and it’s been a very, very small number of cases that we have seen.” 

New Hampshire’s day care guidance is a classic example of well-intentioned regulations creating needless hardship because regulators sought to impose mandates rather than offer help and guidance.

“At first there was a little bit of shock,” Cormier said. “I don’t think the intention was to cut day cares in half. I think it was just one of those things that looked better on paper than in reality.”

Consistent with our guidelines for reopening the economy, the Josiah Bartlett Center for Public Policy recommends rescinding the unworkable mandates and instead offering guidance on best practices. 

The point is to have child care operators improve their safety procedures so parents can get back to work. Imposing unrealistic and unnecessary mandates that send thousands of children home won’t achieve that. 

/1 Comment/by

Five guidelines for reopening New Hampshire’s economy

, ,

New Hampshire’s economy spent March and April of 2020 rapidly contracting. Cell phone data and reported restaurant and retail store revenue show that consumers voluntarily began staying home in the early March. Then on March 27 the governor issued a stay-home order and ordered “non-essential” businesses closed to in-person interactions.

That one-two punch put nearly 160,000 Granite Staters out of work in a matter of weeks. The state’s unemployment rate rose from less than 3% in March to approximately 15% in April, according to state figures released this week. 

Those numbers are not just statistics on a financial spreadsheet. Each application for unemployment benefits represents a real person who has been made idle involuntarily. 

Those Granite Staters — our friends, neighbors, and family members — have lost the ability to provide for themselves and their families. Some of their employers have stayed open with skeleton crews, some have closed temporarily, some permanently. 

New Hampshire’s economy is in serious long-term danger because roughly 96% of New Hampshire businesses are small businesses. Small businesses tend to have low cash reserves. A JP Morgan Chase study of nearly 600,000 small businesses in 2015 found that the median small business holds less than one month’s worth of cash reserves. A quarter hold less than two week’s worth. If small businesses remain closed by state order much longer, many won’t survive. 

Again, that’s not just a financial story. It’s a human one. Businesses provide the goods and services people need, and the revenue businesses generate pays the rent, the mortgage, the grocery bills, the gas bills, etc., for all of their employees. 

Free economic exchange is not a luxury to be disregarded in times of crisis. It is how Americans feed, clothe, and shelter themselves. It is how most of us define who we are. It is how people generate the business profits that fund scientific research and the tax payments that fund government services. It is, by itself, essential for the creation and maintenance of any prosperous and healthy society.  

Getting people back to work, then, ought to be an urgent priority for state and local policymakers. 

The government has a vital role to play in minimizing the possibility that a deadly new disease will overwhelm our health care system. But achieving that goal can and should be done in a way that produces the smallest possible negative impact on the economy. Here we suggest five ways to achieve both of those important goals. 

To reopen the economy with minimal risk to the health care system, government policy should follow five guidelines:

  1. Exercise the minimum intervention necessary
  2. Focus on safe practices, not categories of businesses
  3. Enable innovation and adaptation
  4. Reduce costs and burdens on employers & business owners
  5. Prioritize information and flexibility over control

Read the full report here: JBC Reopen Report

/2 Comments/by

To reopen the economy, ditch the ‘essential’ vs. ‘non-essential’ framework

,

Addressing the first meeting of the Governor’s Economic Re-Opening Task Force, Gov. Chris Sununu said the state likely faced a gradual reopening over many months, not a quick lifting of restrictions within a few weeks. 

The task force’s job, then, is to craft a strategy that would “allow us to continually manage through the process as opposed to closing everything down and rewriting the playbook” if Covid-19 infections surge again in the fall or winter, the governor said.

Throughout the meeting, members discussed how to include all of New Hampshire’s industries. Two members stressed the importance of the arts to New Hampshire’s economy. The pressure on members to get certain industries listed as “essential” was obvious. 

Since the governor’s March 17 order that divided state businesses into “essential” and “non-essential” categories, people in industries categorized as “non-essential” have pressed hard to have their businesses recategorized. And who can blame them? For many, a forced closure for even a few more weeks, not to mention 18 months, is an economic death sentence.

It’s become clear that the “essential” vs. “non-essential” framework is deeply flawed. Adopted by governors nationwide, it’s a better fit for wartime production circa the 1940s. The effort to suppress the spread of the coronavirus does not fit that model very well.

The government isn’t forcibly converting the private sector to war-time production for the obvious reason that surviving a global pandemic does’t require quite the same sort of government direction and mobilization that defeating an enemy nation does. 

The task is not to turn our economy over to government control. It is to slow the spread of a virus. To do that, it isn’t necessary for the state to dictate which industries get to stay open. It’s necessary for people to behave in ways that minimize the spread of a virus. 

Anyone who’s shopped in the last month can see the problems with the current model. Grocers, classified as “essential,” sometimes implement responsible protocols and sometimes don’t. Grocery clerks are a top infected group, showing that safety practices are not always followed as rigorously as they might be. 

Artists and many small retailers, on the other hand, are forced to keep their doors closed even if they can responsibly clean their facilities and implement effective safety protocols.

A safe practices model that emphasizes behavior rather than industrial classifications is a better fit. 

Our counterparts at the Beacon Center of Tennessee have recommended that “any businesses that can maintain public health and safety guidelines should be allowed to open.”

That’s a much better framework to guide the reopening process. And it’s based on existing regulatory practices. 

Restaurants and hospitals, for example, have to meet lengthy checklists of health and safety standards. They are inspected, and if they meet the standards, they continue to operate. 

Rather than having the governor dictate which industries can and can’t open, a safe practices model would encourage and reward responsible behavior, including the widespread adoption of rigorous safety protocols throughout the economy.

Setting safety standards for businesses to meet could open much more of the economy while creating powerful incentives for the more widespread adoption of safe practices.

/2 Comments/by

How the state can help restaurants survive the shutdown

, ,

In the month before Gov. Chris Sununu ordered New Hampshire restaurant dining rooms closed, employment at New Hampshire full-service restaurants dropped by more than 8 percent (2,000 people), state figures show. In the month since the governor’s March 16 order, restaurant business has plummeted. State employment data are not yet available for those weeks, but industry insiders expect them to show catastrophic losses. 

Some New Hampshire restaurants already have gone out of business. Restaurant owners interviewed by the Josiah Bartlett Center in the last two weeks say things are bad and getting worse. If restaurants cannot reopen for in-person service in May, several said, the state can expect to see a wave of small-business closures.

A National Restaurant Association survey of restaurant owners nationwide found that 11 percent said they expected to close permanently within the next 30 days. Another 3 percent of those surveyed reported that they already had gone out of business. 

Restaurant revenue nationally is down by 50 percent for the year, according to data compiled by small-business software firm Wombly. That figure includes restaurants that specialize in take-out service, so the decline for dine-in restaurants would be even worse.

Full-service restaurants typically have low profit margins and high monthly expenses, including rent, insurance, taxes, and debt service on equipment. Reduced to take-out service only, many won’t survive if they can’t close the gap between their expenses and revenues. 

Anticipating that dining rooms are likely to remain closed beyond May 4, the Josiah Bartlett Center for Public Policy has drafted a list of policy recommendations to help full-service restaurants narrow their losses, and possibly return to profitability, so they can survive until the economy reopens. 

It’s important to understand that while on-premises service is halted by order of the state, other state laws and regulations prohibit restaurants from pursuing some potentially lucrative alternative sources of revenue. By temporarily relaxing some of these restrictions, the governor might be able to save numerous restaurants from closure, return some employees to work and reduce the burden on state services.

The policy changes listed below would help restaurants either bring in additional revenue or push back some expenses until later in the year, when dining rooms are expected to reopen.   

  1. Allow restaurants to sell beer in growlers. State law does not allow restaurants and bars to sell draft beer in growlers (large bottles, typically 64 ounces, with screw-on caps). With dining rooms closed, restaurants are sitting on thousands of dollars worth of draft beer inventory that they are prohibited by law from selling. The state lets restaurants sell draft beer for consumption on-site only. Keg beer has a short shelf life, so without an order allowing it to be sold for off-site consumption, some restaurants will be forced to pour out inventory worth tens of thousands of dollars. This waste is entirely unnecessary. An emergency order could allow restaurants to sell draft beer in their own growlers or to fill customers’ growlers after washing them in commercial washing machines. The order could require growlers to be transported out of reach of a vehicle’s driver.    
  2. Allow restaurants to sell mixed drinks in closed containers. The state objection to the curbside sale of mixed drinks is that drivers could open and consume the drinks while in the vehicle. But state law already allows patrons to transport open wine bottles from restaurants, provided the bottle is stored in a car’s trunk or out of the driver’s reach. Allowing restaurants to sell mixed drinks in closed, sealed containers, with the same distance-from-driver requirement that applies to opened wine bottles, could offer a significant sales boost for some restaurants without endangering public safety. 
  3. Allow restaurants to sell bottled liquor and wine. The Liquor Commission has let restaurants to return unopened liquor and wine, but only for store credit. That doesn’t help restaurants that need cash. State law allows restaurants to sell only opened liquor and wine, on premises. Temporarily allowing restaurants to sell unopened liquor and wine for take out would allow them to increase cash flow while reducing inventory. Though they wouldn’t be able to compete on price with state liquor stores, they could do a decent business from patrons who don’t want to drive all the way to a liquor outlet or who just want to support local restaurants. 
  4. Allow outdoor, in-person dining, subject to social distancing and other health protocols. Grocery aisles remain clogged with customers, many not wearing masks or following recommended social distancing procedures. Meanwhile, restaurant decks and patios where better health protocols can be enforced go unused. The state could let restaurants reopen outdoor dining areas subject to additional regulations, such as requiring restaurants to space tables at least six feet apart, disinfect tables and seats after each use, have staff wear masks, use disposable menus, and limit the size of parties and the number of customers allowed on site. Some restaurant owners suggested that they could make things work temporarily if the state cut their authorized seating capacity in half and banned large gatherings in lobbies.  
  5. Let restaurants defer rooms and meals tax payments. If restaurants could postpone their rooms and meals tax payments for 90 days, they could save some cash to help get through the emergency shutdown. Payments would still be made, but after business has picked up and more cash is coming in. 
  6. Municipalities can also help by letting restaurants defer property tax payments. 
  7. Give restaurants the same liquor and wine discount that grocers get. State law (RSA 178:28) grants grocers a 20% discount on the wholesale price of liquor and wine purchased from state liquor warehouses, but restaurants a discount of only 10%. Granting restaurants the same discount that grocers get will shave some of their costs when dining rooms reopen.

Restaurants operate on famously thin margins. Many will not survive a prolonged shutdown if the state continues to enforce regulations that prevent them from adapting to the forced closure of their dining rooms. Our recommended changes offer responsible adjustments that could keep many small businesses alive without creating additional risks to public health. 

A downloadable version of this brief is available here: Bartlett Brief — Restaurant Help During Shutdown 

/by