Slashing Red Tape is Progressive

In a recent video that went viral, New York City’s mayor–elect Zohran Mamdani declared it’s time to “empower small businesses – not bury them in fines, fees and endless bureaucracy.” Mamdani, who just won a hard-fought mayoral race on an affordability agenda, has pledged to slash small-business fines and expedite permitting.

Image Credit: Zohran Mamdani

This might sound surprising to those on the left who think “deregulation” is a dirty word. But there’s a growing movement of progressives making the case that permitting reform and targeted deregulation can advance equity and economic democracy. In cities and states across the country, forward-thinking leaders are working to streamline licenses, permits, and paperwork – not as a giveaway to big corporations, but as a boost for working-class entrepreneurs and communities of color too often strangled by red tape.

This progressive vision for cutting red tape starts from a simple premise: Bureaucracy shouldn’t be a tax on the poor or the newcomer. Excessive licensing and permitting hurdles act like a hidden tax on anyone trying to start a business or a community project – and those hurdles hit marginalized groups the hardest. When a street vendor or hair braider has to spend thousands of dollars and months of paperwork just to legally earn a living, something is deeply wrong with our system. Instead of accepting that deregulation is a right-wing domain, progressives are reclaiming it in the name of empowering the little guy. As Vox’s Eric Levitz notes, there’s no contradiction between cracking down on corporate abuses and clearing bureaucratic bottlenecks for everyday people, Democrats “don’t actually need to choose” between fighting greed and pursuing abundance for all. In fact, delivering real-world improvements – like faster permits, lower fees, and more affordable housing, strengthens progressive governance and undermines conservative narratives that government only creates roadblocks.

When Red Tape Hurts the Little Guy

It’s no secret that complex regulations often favor the powerful. A maze of permitting requirements or a thicket of licenses can be mere inconveniences for large companies with compliance departments – but for a first-time entrepreneur or a mom-and-pop shop, those hurdles can be crushing. A study from the NYU Journal of Law & Business found that “aggressive regulation may confer undue advantage to larger businesses to the detriment of small businesses.” Big firms can absorb the extra costs and paperwork, while small businesses struggle to keep up. In fact, 69% of small businesses report spending more per employee on compliance than their larger competitors do. The playing field gets tilted: complex rules end up “protecting the big guys” – who can hire lawyers and lobbyists – while pricing out or slowing down smaller, scrappier upstarts.

Nowhere is this imbalance clearer than in the explosion of occupational licensing over recent decades. Today, nearly 3 in 10 jobs require a government-issued license – up from only 1 in 10 jobs in the 1970s. That dramatic increase was often well-intentioned, meant to safeguard health or quality. But in practice, many licensing rules have overshot, “fencing out new entrants” and would-be entrepreneurs.

Image Credit: Kauffman Foundation

Research shows that onerous licensing stifles new business creation and innovation, especially in fields that pose little true safety risk. It’s one thing to license doctors or pilots; it’s another to demand a costly license to be a tour guide, sell caskets, or braid hair.

And yes, those are real examples – in some states not long ago, you could not legally braid hair for pay without spending thousands on cosmetology school courses that didn’t even teach braiding. Consider the fight over natural hair braiding licenses, a textbook case of outdated regulation hurting a community. For years, African-American hair braiders in many states were forced to obtain full cosmetology licenses (costing upwards of $20,000 and 1,000+ hours of training) just to practice their cultural craft, even though cosmetology programs don’t even teach hair braiding.

(Fun fact: for those who are fans of Hulu’s Secret Lives of Mormon Wives, there is an entire segment dedicated to this! The sole Black woman of the group resorted to letting her hair fall out because her friends were not trained to properly treat her hair!)

This effectively sidelined Black women and immigrant entrepreneurs who wanted to open braid salons or simply braid hair from home. But a wave of reforms – often led by the braiders themselves has begun to change that. In Iowa, for instance, hair braiders won the right to work without a cosmetology license in 2020, replacing the onerous schooling with a simple health and safety class and a registration. The change means braiders no longer must spend “almost $22,000 and [take] thousands of hours of classes” irrelevant to their trade.

Democrats Leading the Way

Recognizing these realities, a number of Democratic leaders are championing permitting reform as a cornerstone of inclusive growth. One prominent example is Pennsylvania Governor Josh Shapiro, who has made cutting red tape a hallmark of his administration – not by slashing protections, but by making government work better for ordinary people. In his very first month in office, Governor Shapiro signed an executive order establishing standard response timelines for all state permits, licenses, and certifications. He then delivered a first-in-the-nation innovation: a “money-back guarantee” for permit delays. If a state agency doesn’t process your application within the promised timeframe, you get your application fee refunded. The Shapiro administration built a public dashboard (cheekily dubbed PAyback.pa.gov) where anyone – be it a worker seeking a professional license or a small business awaiting a permit – can see the standard processing time and track their application. If the state misses the deadline, a refund is just a few clicks away. It’s a bold accountability measure that “increases certainty for Pennsylvanians doing business with the Commonwealth”.

Governor Shapiro isn’t alone. Across the country, other forward-looking officials are proving that streamlining permits is a bipartisan winner – but one that fits naturally into progressive priorities. In Colorado, a state led by Democrats, lawmakers adopted universal license recognition, allowing teachers, nurses, electricians and more to transfer out-of-state licenses easily so they can start working without redundant red tape. In California, Governor Gavin Newsom – hardly a conservative – has lambasted his own state’s bureaucratic bloat, pushing for reforms to speed up building housing and renewable energy projects that align with progressive goals. Under pressure from progressive housing advocates, California’s Democratic legislature has exempted affordable housing from some onerous reviews and set firm timelines for decisions on new housing developments. The result: projects that used to die in paperwork may finally get built, providing homes for working families.

Reforms That Works for Working People

Making government more efficient and responsive is an economic issue. It determines whether a family-owned café can open in time for the summer season, whether a community nonprofit can rehab a vacant lot before funding runs out, or whether street vendors can come out of the legal shadows.

The next time someone says “deregulation” is a right-wing idea, point them to the future halal food truck owner in Queens who can afford to stay in business because city fees went down. Point them to the formerly incarcerated firefighter in California who can now get certified because the state removed an old ban on applicants with records. Point them to the smiles of newly licensed braiders, the busy stalls of legalized street vendors, and the open doors of long-vacant buildings now alive with new small businesses. These are the fruits of progressive permitting reform. This is what it looks like when red tape is cut for the public good.