08 February 2011

The epidemic of requiring "licensing"

Excerpts from an interesting article at The Wall Street Journal:
Amid calls for shrinking government, lawmakers across the country are vowing to cut regulations that crimp economic growth. President Barack Obama recently said it's time to root out laws that "are just plain dumb."

Tell that to the cat groomers, tattoo artists, tree trimmers and about a dozen other specialists across the country who are clamoring for more rules governing small businesses.

They're asking to become state-licensed professionals, which would mean anyone wanting to be, say, a music therapist or a locksmith, would have to pay fees, apply for a license and in some cases, take classes and pass exams. The hope is that regulation will boost the prestige of their professions, provide oversight and protect consumers from shoddy work...

While some states have long required licensing for workers who handle food or touch others—caterers and hair stylists, for example—economists say such regulation is spreading to more states for more industries. The most recent study, from 2008, found 23% of U.S. workers were required to obtain state licenses, up from just 5% in 1950...

Texas, for instance, requires hair-salon "shampoo specialists" to take 150 hours of classes, 100 of them on the "theory and practice" of shampooing, before they can sit for a licensing exam... California requires barbers to study full-time for nearly a year, a curriculum that costs $12,000...
And here's a key point -
When a trade group does succeed in getting a licensing law passed, it sometimes exempts existing workers from the testing requirements. In Michigan, for instance, it will soon be a felony to practice massage without a license. Newcomers to the field must take 500 hours of classes and pass an exam to get that license. But a grandfather clause exempts most current massage therapists, including those who may never have taken a class at an accredited school.
Much more at the link, via Yglesias.

1 comment:

  1. That last paragraph demonstrates quite well why some people might refer to professional licensing as 'cartels'. I tend to lean that way - for all the good they do in terms of protecting consumers from 'shoddy work', they end out protecting those already working within an industry, which basically means they restrict the supply of workers! Ends out being much more expensive for consumers...

    Perhaps its correct to view it as a 'quality' versus 'cost' trade-off?

    Now, of course there are plenty of industries which promote quality without licensing.

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