Over 90,000 Minnesotans in poverty due to increasing federal regulations

Regulation has far-reaching consequences on our everyday lives. From rent control and minimum wage laws to occupational licensing, research is brimming with evidence showing how all of these policies have made our lives harder by raising prices, reducing opportunity, and restricting economic growth.

Unfortunately, unlike fiscal policy — taxes and spending — regulatory policy is hard to measure and analyze. The regulatory burden is a function of wording and enforcement, and both of these can be open to interpretation. So, while a lot of evidence exists on specific regulatory policies, it is hard to measure the overall impact of all regulations on our everyday life — especially federal regulation.

Fortunately, new efforts at the Mercatus Center, a research organization at George Mason University, are helping us paint a picture of how increasing regulations — federal regulations specifically — affect our everyday lives.

In their newly published study, the Mercatus Center analyzes how increasing federal regulation has affected state economies. More specifically, the study analyzes how growth in federal regulation between 1997 and 2017 has affected levels of poverty and inequality in each state.

The results indicate that growth in federal regulations has increased poverty levels and worsened inequality among the states. For Minnesota,

Regulation growth over this period is associated with an additional 91,145 people living in poverty in 2019 (491,782 actually in poverty versus 400,637 if there had been no regulation growth) and an increase in the poverty rate of 1.65 percentage points (8.9 percent actually living in poverty versus 7.25 percent if there had been no regulation growth).


The accumulation of federal regulation affecting Minnesota residents and businesses between 1997 and 2017 is associated with a 4.55 percent increase in income inequality.

State lawmakers should be concerned

Outside of federal regulations, Minnesota businesses and individuals also have to deal with state- or city-specific regulations. These are not included in the study, but it is safe to conclude that when added, they further multiply the costs faced by Minnesotans.

Certainly, federal regulations are imposed equally among all states, at least in theory, so there is little that state lawmakers can do. However, Minnesota lawmakers can shield Minnesotans from further economic damage by making state regulations much more accommodating to economic activity.

When strict federal regulations are met with strict state regulations, the results are much more disastrous for Minnesotans. Improving Minnesota’s regulatory landscape would be one way to shield Minnesotans from further costs.