Reform Opportunities for States: Growing Jobs and Economies

Americans experienced unprecedented economic shock in 2020, driving millions of families and businesses from prosperity to hardship. The national unemployment rate spiked from 3.5 percent in February 2020 to 14.7 percent in April 2020, marking the sharpest change in American history. Businesses shed 22 million jobs as consumers retreated and economic shutdowns restricted activity.

Prolonged lockdowns and uncertainty have brought many businesses to the brink of closure and cost many Americans the financial security and sense of accomplishment that comes with a stable job. As distribution of the coronavirus vaccine enables communities and businesses to open up even more, state policymakers need to implement solutions that support local businesses and get Americans back to work.

7 State Solutions to Increase Jobs & Boost the Economy

Liability Protection

Businesses that have been instrumental in fighting the pandemic and putting people back to work now risk being opportunistically sued by personal injury law firms. States can strengthen their economies and encourage growth by protecting businesses who are following all public health guidelines and government instruction from lawsuits based on illegitimate claims.

Tax Reform

State tax codes should not stand in the way of economic success. By adopting reforms that allow for more flexibility in areas like shared work programs, net operating loss calculations, and new capital investments, states can create environments conducive for businesses to grow and encourage employers to keep more workers in times of downturn.

Occupational Licensing Reform

The American economy is facing record levels of unemployment. Now more than ever, unnecessary regulations should not be keeping skilled workers from rejoining the workforce or from moving to another state where jobs are available. By reducing burdensome occupational licensing requirements, states can reduce joblessness and lessen the long-term impact of the pandemic.

Home-based Businesses and Occupations

Home-based businesses are often the most affordable form of startup, and during the COVID-19 pandemic, among the safest. Unfortunately, zoning laws haven’t caught up, and would-be entrepreneurs have found themselves stifled by outdated restrictions first developed in the 1920s. Allowing more home occupations and home businesses, so long as they do not disturb neighbors, will help states fight the pandemic recession and encourage entrepreneurs.

Regulatory Sandboxes

Innovation and the freedom to pursue the American dream has long set America apart from other countries. Regulatory sandboxes make both a reality by enabling innovators to experiment with new business models, products, and services without being smothered by archaic regulations that might otherwise prevent growth. This is possible because businesses are temporarily relieved of restrictions that hamper their ability to innovate. 

Food Entrepreneurship

The brick and mortar restaurant model has been severely disrupted by the coronavirus pandemic, creating the need for food innovation. Increasing food freedom to allow more home-based food production and mobile vending, such as food trucks, offer entrepreneurs and struggling restaurants solutions to the current environment. 

Independent Contracting

Millions of Americans prefer the flexibility of independent contracting and alternative work arrangements over traditional employment, yet states are considering regulations that would reduce labor force flexibility. A modern economy requires more flexibility, not less. States should enact reforms that provide simple and clear criteria to define independent contractors and to differentiate them from employees, empowering individuals and businesses to freely engage in independent contracting.

SPN State Job Report

SPN’s State Job Report not only makes it easy to understand what the United States Bureau of Labor Statistics monthly jobs report means for indvidual states, it also helps keep track of how states are performing in job recovery following the pandemic, and details how far each state has to go to reach pre-pandemic employment levels.

Polling

In partnership with Heart + Mind Strategies, State Policy Network is tracking Americans’ opinions on government efforts to fix jobs and the economy.

Recent polls:

• How Americans think we should fix jobs and the economy
• 68 percent of Americans think coronavirus economic impact will last 7 months or more
• Three issues driving Americans’ votes

Additional Resources