Originally posted on Quora May 12, 2023
EMTs hold lives in their hands, yet 73 other occupations have greater average licensure burdens: barbers and cosmetologists, home entertainment installers, interior designers, log scalers, manicurists and numerous contractor designations … while the average cosmetologist must complete 386 days of training, the average EMT must complete a mere 34. Even the average tree trimmer must complete more than 16 times the amount of education and experience.Source: The Atlantic, License To Work
In the USSA, there doesn't seem to be any gig that you can do without needing a team of bureaucrats to sign off on it, however trivial it may be in the grand scheme of 'public safety.' For instance, to install home entertainment systems in Connecticut you have to earn a high school diploma, pay a $185 application fee, pass a test, and work as an apprentice for one year. To legally sell flowers in Louisiana, one has to pay a $189 application fee and pass a florist exam. All 50 states require a license to become a barber. On average, a prospective barber must pay $154 in fees, sit out a year for education, and pass two exams just to legally cut other peoples' hair. Even something as mundane as cutting grass for pay, something teenagers often do for recreational spending, requires a business license in a growing number of cities. The absurdity of occupational licensing laws knows no bounds. As I have reported in previous posts, people have been threatened with fines and sometimes prison for offering dietary advice without the government's permission, teaching makeup without the government's permission, critiquing traffic lights without the government's permission, playing music in a bar without the government's permission, selling teeth whitening products without the government's permission, and selling home cooked meals to neighbors without the government's permission. At this point, a list of jobs you're allowed to do without the government's permission would be much shorter than a list of jobs you need their permission to do. State and local governments, in conjunction with industry licensing boards, are making an ever growing number of services illegal without a government shakedown. This creates barriers for innovation, growth, and self-employment opportunities for the working class. A radical measure is needed to end this insanity: abolish occupational licensing, along with the state licensing boards that implement them and the industry lobbyists that control them. It won't be pretty, initially, but over time we will see how consumers can join together to regulate the quality of the services they provide. The first conception may be rating systems specific to certain kinds of services, and this may evolve into private credentialing over time. Eliminating the rigid top down structure of licensing boards would open up multiple avenues for keeping proprietors honest and competent without creating burdensome hurdles for honest and competent people trying to become proprietors.
Occupational Licensing Has a Disparate Impact on Low Income Demographics
Occupational licensing may not achieve or may not nearly achieve, contrary to its proponents, its stated purpose of protecting consumers from fraud and improving the quality of service they receive, but it certainly achieves the perhaps intended effect of protecting entrenched business interests, creating supply bottlenecks (thereby increasing costs for consumers) and pricing poor people out of occupations that would otherwise provide them upward social mobility. For instance, a study conducted by the Wisconsin Institute for Law and Liberty found that occupational licensing imposed in the state of Wisconsin resulted in an estimated 31,634 fewer jobs and $2 billion in additional costs to consumers annually. As I noted five years ago in Occupational Licensing Hurts Minorities and the Poor, the ‘natural hair stylist’ license in Tennessee that required african hair braiders to attend Cosmetology school resulted in the state of Tennessee only having 156 legal hair braiders while it’s direct southern neighbor Mississippi had 2,600 legal hair braiders by only requiring braiders to register with the state department of health and pay a $25 administrative fee. In the same post I showed how similar licensing regimes for other pink collar trades, that normally don’t require college, could result in disparate impact (discrimination without intent) such as excluding interior designers that don’t have a college degree or as a general rule requiring english proficiency and imposing a residency requirement. Of course, the disparate impact of occupational licensing transcends differences of ethnicity and nationality and imposes new class distinctions. In Florida alone, occupational licensing barriers are associated with an 8% increase in income inequality and a 4% decrease in economic mobility. In 2019, 45% of social welfare recipients in the state reported that a lack of an occupational license had prevented them or someone they knew from getting a job that they were capable of doing. Even politicians that are normally deferential to overbearing government bureaucracy have taken exception to occupational licensing. Just before leaving office in 2016, the Obama admin released a white paper critical of occupational licensing that found that licensing leads to 3-16% higher prices for consumers and 10-15% lower wages for workers excluded from licensed professions increasing income inequality. And far from being a leg up for low income workers, occupation licensing tends to further entrench barriers to social mobility for those without college degrees as evident in the fact that 52% of licensed workers have at least a bachelor’s degree compared to 38% of unlicensed workers. One of the studies reviewed in this white paper also found that of the 14 occupations of concern more restrictive state licensing statutes reduce interstate migration which by logical extension means a reduction in interstate commerce as well.