REDUCE OCCUPATIONAL LICENSING REQUIREMENTS

2 PARAGRAPHS 4 LIBERTY: #388

For several years I have donated money to the Institute for Justice. It is a public interest law firm whose stated mission is “to end widespread abuses of government power and secure the Constitutional rights that allow all Americans to pursue their dreams.” Recently IJ conducted Yelp comparisons for numerous occupations throughout our country in neighboring states that had different occupational licensing requirements. The results of that study showed that occupational licensing did not improve the quality of the services and, in some cases, actually did some harm. What types of occupations were involved? Tree trimmers, interior designers, barbers, cosmetologists, manicurists and locksmiths. And the results? Consistently the services provided where no licensing was required were no different than that for licensed operators. For example, California requires tree trimmers to be licensed, while neighboring Nevada does not. But the services rendered were found to be the same.

Of course licensing often can and does cause harm. How is that? Licensing requires the applicants to pay government fees and often imposes steep education and experience requirements upon the prospective workers. Naturally these increase the expenses and impose delays in obtaining a job. And these are harmful for everyone, particularly for lower income workers. So what works? Competition, promoting accurate information and often insurance! Service providers have incentives to perform well because they want repeat business – and they want good “word-of-mouth advertising.” In addition, social media platforms and review sites like Yelp, Angi and TripAdvisor now spread both good and bad reviews like lightning. So if you perform well you will succeed, and if you don’t you will not. What a concept! An additional harm caused by licensing is that many people who have criminal convictions are often automatically disqualified from obtaining these occupational licenses. And that is truly a harmful, if not stupid, result. All studies I am aware of show that the recidivism (or re-offending) rates for people on parole for those who are employed is three to four times lower than for those who do not have jobs. So let’s give everyone a break, except for many government bureaucrats, and significantly reduce the numbers of occupations that require government licensing!

Quote for the week: “Anyone who intentionally hunts for reasons to be outraged will always be successful in finding them.” James P. Gray