What do cat groomers, tattoo artists, tree trimmers, music therapist, locksmiths, caterers, hair stylists, florists, flower arrangers, interior designers, private detectives, hearing-aid fitters, conveyor-belt operators, frozen dessert retailers, hair-salon “shampoo specialists,” glaziers, librarians, nutritionists, respiratory therapists, athletic trainers, boxing promoters, eyebrow threaders, acupuncturists, tattoo artists, massage therapists for humans and for horses, wig servicers, karate instructors and lawyers have in common?
Answer: at least one state requires each of these “professionals” to get a license. Altogether, more than 1,100 professions require a license in at least one state.
The WSJ discusses the problem. It notes that licensing restricts occupations and raises incumbent professionals’ wages (the laws usually grandfather existing practitioners), while excluding entrants and raising prices (the article says an average of 15% compared to unlicensed workers) at a time workers and consumers least need these additional burdens. Two economists cited in the article estimate that occupational licensing adds at least $116 billion a year to the cost of services in the U.S., about 0.1% of total consumer spending.
No wonder:
- Texas hair-salon “shampoo specialists” must take 150 hours of classes, including 100 on the “theory and practice” of shampooing, then sit for a licensing exam with a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner.
- Connecticut glaziers take two exams, at $52 apiece, pay $300 in initial fees and $150 annually thereafter.
- California barbers pay $12,000 for a year of courses at Arthur Borner’s Barber College despite the fact that Mr. Borner himself says “Barbering is not rocket science. I don’t think it takes 1,500 hours to learn. But that’s what the state says.”
- Louisiana flower arrangers have to pass a written exam with questions on plant names and complimentary colors.
- Michigan massage therapists must take 500 hours of classes and pass an exam to get that license.
- Alabama manicurists must have 750 hours of schooling and a written and practical exam.
- Oklahoma locksmiths must prove they’re in the U.S. legally, submit to a criminal background check, pay fees of up to $350 a year and be one of 32% of applicants who pass a 50-question exam.
How much do these laws accomplish? Alabama, with very strict licensing requirements for manicurists, gets, on average, four public complaints a year about poor service. Connecticut, with no licensing, gets six complaints a year to the state, 2/3 about gift certificates that aren’t honored. Oklahoma, which has strict locksmith licensing, got two complaints about locksmiths in more than a decade—one the year before the law took effect and one the year after.
True, some of these professions may be a threat to consumers or the public. But that doesn’t explain the incredible proliferation of licensing. Here’s a better explanation, from Karen Armstrong, a massage therapist and chair of the Michigan Board of Massage Therapy: “Not being licensed really puts our profession back behind a lot of other professions.”
Fortunately, the Institute for Justice is on the case. It got a Florida law requiring licensing of residential interior designers struck down. Commercial designers must be licensed.
Next up, cat groomers in Ohio. The Professional Cat Groomers Association of America has established written tests and a hands-on exam that helps determine which members of the trade are “worthy of being called a certified master cat groomer.” It plans to start lobbying for licensing laws. A founder of the organization wants to make sure “you are educated before you put a cat on that table.”
I have previously written about IJ suits involving licensing horse-teeth floaters and Philadelphia tour guides. In the first post I noted that “fifty years ago, just 3% of American workers were regulated or licensed by government agencies, according to the Institute for Justice. Today, it’s 35%.” In the second I observed that licensing laws were ” a business talking, but with a government stick.”
True, in some cases there is arguably a threat to public or consumer safety. But mostly this is about some squeaky wheel interest group’s quest for status and higher pay. The social costs are mounting just when the corporate jobs are drying up and people are trying to go into business for themselves. And it’s important to keep in mind that there are market alternatives to licensing: reputation, dissemination of information through the internet, certification by private trade groups.
Which brings me to legal services. What kind of talking about law should the government regulate? Glad you asked. See Lawyers as Lawmakers: A Theory of Lawyer Licensing, 69 Mo. L. Rev. 299 (2004), online version and, more recently, Law’s Information Revolution, which among other things discusses increasing market pressures on lawyer regulation.
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The late, great Milton Friedman used to speak against the licensing of doctors as being simply a return to the guild system, not beneficial to the consumer (what quack ever let the lack of a license stop him, or the maintenance of one improve him?). By restricting the “supply” of doctors, salaries can be maintained at inflated levels.
If the licensing of doctors can be reasonably called into question, why on earth are cat grooming licenses required?
Barber and food prep licensing should prohibit meat-pie shops downstairs from barbers.
Don’t ignore the amount of money states/municipalities rake in by licensing. In Chicago, my father’s small business had to pay over $800 a year to the city for various “licenses” associated with his business, none of which were necessary…
My cat will no doubt sleep more soundly knowing that her groomer is duly credentialed and licensed
Some day, I’m going to move to a free country. I swear it.
I agree that almost all of the requirements look like complete BS. The only one that made any sense at all was the OK requirement for locksmiths to prove legal entry and have a criminal background check, since locksmith tools could double as burglary tools. Although even there, the yearly fee and the examination were BS.
Liscensing makes sense for occupations requiring significant knowledge, where the consequences of incompetance could be very costly, like medicine or law, but for most of the mundane occupations on this list, it is pure BS. Even in the case of medicine or law, a test should be sufficient, without requiring a degree. For example, many of the better combat medics, or nurses, have as much medical knowledge as doctors. If they can pass a test that is strict enough that most people could not pass without going to medical school, then why not let them practice medicine. Same with law. Lots of regular law students cant pass the bar exam. If a regular person can, from being self taught, then let them do it. Lincoln did not go to law school, but most people think he was a pretty good lawyer.
And liscensing does not ensure quality. Otherwise we would not need malpractice lawsuits. for many of these “professions” it would be sufficient to just require they have money on deposit in an account, or carry liability insurance, so if they screw up, they can pay a judgement.
Requiring long manditory classes for these mundane occupations just restricts entry, and raises prices, while doing little for quality.
“For example, many of the better combat medics, or nurses, have as much medical knowledge as doctors.”
This is almost certainly not true. But, the key point is that one doesn’t need to know everything that a doctor knows to provide good medical care in a particular setting. A combat medic probably has no clue about how to diagnose or treat cancer, for example, but doesn’t have to know that. One can provide as good as a psychiatrist mental health care and mental health medicine management knowing a tiny fraction of what a medical doctor knows. The case that nurses have similar educations to doctors is stronger, but doctors without a doubt have broader knowledge of esoteric problems relative to nurses in a wider variety of areas.
1,500 hours of instruction to be a barber? To earn an Airline Transport Pilot’s license only requires 1,500 hours of total flight time, only a fraction of which, maybe 20%, consists of instruction. There’s a lot more risk and responsibility involved in piloting a commercial airliner with 100+ passengers aboard in all kinds of weather than there is in possibly administering a bad haircut or at worst nicking the customer.
These professional licensing requirements in most cases serve only two purposes, 1) to erect barriers to entry for potential competion and 2) to raise revenue for local governments for with value-add to either the regulated profession or the consumer.
As the code official for a large East Coast county, I heard pleas for all sorts of new regulation, including licensing of people who decorate nursing homes. The case of mechanical contractors was typical, though less frivolous. The pressure came not from consumers, but from the mechanical contractors association. Their thrust was two fold. First they claimed it was a safety issue since under certain circumstances, poorly done mechanical work could pose a danger. My reply was that tying your shoes could be dangerous if done badly enough, but the most likely danger from poor mechanical work was a drafty house. (The electrical and plumbing aspects of mechanical work were already licensed, so the most likely source of danger in mechanical work was covered). The second argument was that the fees would make the regulatory apparatus pay for itself. I said that the expense would be passed on to the consumer with little value in return, and just because something was “free” didn’t mean it was worth doing. Although I successfully resisted mechanical licensing in my county, the state government was more sympathetic and established it on a state level, then asked the counties to enforce it!
As your article said, the biggest pressure for new licensing comes from those who would be licensed and hope to limit competition.
I agree that there is a huge proliferation of licensing and that one of its main effects (which cynics would argue is actually a goal) is to create an artificial barrier to entry that constricts supply and raises price.
I don’t agree that it’s a problem in the legal market. Attorneys have been regulated for well over a century, although back in the 1800s you could become an attorney after an apprenticeship (instead of law school). Today I think only California still allows you to get a law license based on an apprenticeship.
And let’s face it–there’s no shortage of lawyers. In fact, it’s a common refrain among conservatives (myself included) that there are TOO many lawyers.
Wrong on the details (California is notable for allowing you to take the bar without having gone to an accredited law school. The place where you can “read law” is a small state in New England (maybe Vermont, maybe Maine, I forget.)
In the big picture, law is a place where it is a problem, indeed a pretty severe one. Some kinds of law do have apparent surpluses. But, others (family law, bankruptcy, criminal defense, non-business visa immigration law, consumer representation) are greatly underserved. It is particularly a problem in areas of law that are quite self-contained (e.g. child custody, parental rights, criminal defense, immigration) in terms of subject matter legal knowledge required, that serve people who do not automatically by virtue of their legal dilemna have either the means to pay or the prospect of a significant lump of money down the road even if they win. In these subparts of law (whose collection into a single profession is largely a historical accident), the ability to have people who can charge less because they don’t need four years of undergraduate education plus three years of very expensive legal education teaching them all sorts of things that they don’t need to know to do their jobs, would greatly improve access to competent legal services if they were regulated as independent subprofessions.
My favorite (mis)use of these licenses: NY state offers various educational programs for its prison population, among them courses in barbering and hair styling. Upon release, the ex-felons discover that no one with a felony on their record can be trusted to be licensed to cut hair in NY state.
Libertarians don’t devote enough bombast to the problem of licensing. I’m not sure why, but I suspect many accept that licensing assures quality, just as many wrongly assume that the “mentally ill” can be deprived of rights because they are deprived of reason.
I’m pretty sure many or most libertarians wouldn’t accept the quality argument, it’s just that licensing isn’t often a prominent issue in the news or anywhere else.
In my experience most libertarians do believe that licensing improves quality, but certainly not the intelligentsia. Libertarians champion a lot of causes — like abolishing the Fed and hard money — that are not in the news until they make them news.
If you aren’t educated before you put kitty on the table, you will be when she is done with you.
I have heard similar defenses for licensing of interior designers – a lot of what interior designers do (e.g., space planning – moving interior walls around) overlaps with what architects do, although in some areas (e.g., picking finishes and furnishing) there is no legal overlap, although plenty of residential architects pick finishes and furnishing.
We need to stop having it so that only X can do Y. If you have a license to do Y, so good. If you don’t, so good as well—as long as nothing bad happens. In my opinion, licensing does not prevent bad outcomes in haircuts, architectural advice, massages, legal advice, personal coaching, financial advice, medical service, auto service or anything else. If you have a license, good, say so. If you don’t , OK, charge less.
The utter havoc wrecked by, for example, unlicensed soil engineers or people purporting to be attorneys when they are not, can be truly awful. I’ve cleaned up some of those messes and the ones made by the unlicensed people are different entirely in scale and degree than the messes that the professionals get themselves into.
I have been behind the scenes in a number of legislative negotiations over occupational licensing in Colorado. One key element of occupational licensing is the desire of the licensed profession to escape being squeezed out of their profession, but some other profession that more clearly needs to be regulated, which has a broad mandate.
For example, suppose that you are a horse-tooth floater or cat groomer. Your concern is not so much that unlicensed horse-tooth floaters or cat groomers will tarnish the profession (although your association might find it helpful to push this concern as it allies with the public interest), as it is that without your own recognized occupational license, that veterinarians, whose typical statutory license scope includes exclusive right to conduct all health care of all kinds of all animals other than humans except as otherwise provided by law, will squeeze your little band of horse-tooth floaters or cat groomers from making a living plying this trade by putting them out of business with unlicensed veterinary services claims. Veterinarians have more legislative clout than horse-tooth floaters or cat groomers do collectively, so you need to make a pre-emptive strike to protect your turf by being a licensed profession, to put inertia in your favor when the veterinarians try to put you out of business.
Massage therapists, similarly, are concerned about claims that they are engaged in unlicensed practice of medicine.
By protecting the ability of “paraprofessionals” and “junior professionals” to operate without the supervision of “primary professionals” in an area where the two arguably overlap, these additional occupational licenses may actually keep consumer costs down, rather than driving them up. For example, if a horse tooth floater needs to operate under supervision of a veterinarian, who would otherwise have jurisdiction over animal health care, then consumers would have to pay not only for the horse tooth floater but also would have to provide a cut for the supervising veterinarian.
Similarly, to the extent that one licenses tax preparers (as the IRS does with its enrolled agent designation), one limits the ability of accountants and attorneys to secure anti-competitive premiums for routine tax preparation work.
In theory, one could achieve the same result by defining professional scope of practice more narrowly. But, in practice, that isn’t a viable or defensible way to protect paraprofessionals who must bet their investment in their livelihood on not having to defend an unauthorized practice claimm down the line.
“but some other profession” should read “by some other profession”
Professionalism is scarce these days. You can’t really find it anywhere and that is kinda sad.
“Massage therapists, similarly, are concerned about claims that they are engaged in unlicensed practice of medicine.”
Maybe in your neck of the woods, but most states have massage licensing laws to cut down on “happy endings”, i.e. prostitution. Licensing gives the authorities a club to prevent “extras” for a bigger tip, and a simple way to keep every hooker on the street corner from advertising as a masseuse.
Fair point. And, again, an illustration of the notion that professional licensing can have purposes that make sense without always being about the professional expertise necessary to conduct the profession licensed itself.