How occupational licensing hurts (instead of helps) the public: Higher prices, lower quality, increased unemployment.

Lysander Spooner fought occupational licensing and cronyism during the early part of the Republic.

 

Attached is a very good report from NPR on occupational licensing.

They examine the plight of a woman in Utah who did African style braiding in her home but soon found the cosmetology mafia unhappy with her. If she was going to braid hair, she needed to get a license and $16,000 worth of “education” at a cosmetology school.

When the woman sought to change the law with the help of a state representative the licensed hair dressers and cosmetology students came out in force to protest the liberalization of the hair braiding market. Unfortunately the hair dresser establishment won.

In Florida one needs a license to do interior design.

That’s right, if one has a particular eye for how furniture should be placed and one seeks payment for this skill, one must get a license. Why?

Is the safety of the public compromised by unlicensed interior designers placing ottomans too close to open windows? Are people falling into allergic fits because unlicensed interior designers are choosing the wrong flowers for arrangements?

No, like the situation in Utah it has nothing to do with public safety (which is why we are told society must have occupational licensing). It instead has everything to do with barriers to entry. Licenses keep competition at bay.

I personally am not against all licensing. For brain surgery I consider at least some licensing quite reasonable. Same goes for flying a 747.

But there is no reason why someone should have to have a law license for instance, or a license to manage money. If we have a system whereby liability is incurred in the event of injury (unless it is contractually limited) what’s the beef? If someone can provide a service why should a license stand in the way?

The attached report says that 1 in 3 jobs require a license these days. No wonder our economy is losing its dynamism.

One additional point.

If politicians really wanted to help the poor (as many often profess,) they would immediately look at licensing and how it increases costs for those who are the most sensitive to cost.

This is especially true for instance in medical care where our current system of licencing encourages treatment by doctors when a visit to a nurse or similar care provider makes more sense and cost less.

Sadly, many politicians aren’t actually as interested in helping the less fortunate as they say. Instead they are much more interested in protecting the organized special interests (like the American Medical Association for instance) who want the current system of licensing to continue because it keeps competitors out.

Click here for the NPR report.