Occupational Licensing

[Straight Shooter]

When President Barack Obama unveils his budget on Monday, it will include a proposal for $15 million to study occupational licensing requirements in all 50 states, according to the New York Times. The money will be used to combat a growing problem: states requiring licenses to practice professions like makeup artist, auctioneer, upholsterer, and interior decorator. In many cases, these regulations limit competition and drive up prices without doing much to improve quality.

Many of Obama's funding proposals will face skepticism from the new Republican-controlled Congress. But promoting deregulation of state licensing rules is an idea that should be easy for GOP legislators to get behind, as it dovetails with the party's small-government philosophy.

Supporters of occupational licensing argue that these kinds of state regulations are necessary to protect the public from unscrupulous or incompetent practitioners. No one wants to get surgery from an undertrained doctor or fly in a plane with an inexperienced pilot.

But many states have expanded licensing rules to professions where it doesn't make much sense. A 2012 study from the Institute for Justice, a libertarian advocacy group, catalogued licensing rules in 50 states and the District of Columbia. The study found that 39 states require licensing for massage therapists, 34 states require a license to install security alarms, 29 states require a license to be a teacher's assistant, and 24 states require a license to be a coach. States license animal breeders, bartenders, funeral attendants, shampooers, and dozens of other professions.

Of course, everyone would like their massage therapists and funeral attendants to be good at their jobs. But these aren't life-and-death professions the way doctors or airline pilots are. And there's little evidence that these kinds of licensing regulations actually improve the quality of service customers receive. At the same time, higher rates often price some consumers out of the market entirely, which can cause serious harms on its own.

Dentistry provides a striking example. Some states allow dental hygienists to provide routine dental care; others require these services to be provided by a licensed dentist. You might expect the stricter licensing regimes to lead to better dental outcomes, but a 2009 study found the opposite: states with stricter rules had more adults with missing teeth, suggesting that the higher prices were making it difficult for patients to get the service they need.

Getting your teeth cleaned by someone who is underqualified is bad. Skipping a cleaning entirely because you can't afford it is worse. Other studies have found similar results.

There's so much variation in state licensing regimes that it's hard to compute exactly how much these rules cost workers and consumers. But one rough estimate found that they reduce employment by 2.85 million while increasing costs to consumers by $203 billion.

For now, the Obama administration's proposal on this front is modest. According to the Times, the Obama administration would provide $15 million to states to help them "analyze the costs and benefits of their licensing rules, identify best practices and explore making licenses portable across state lines." Final authority about which professions to license would remain with the states, but the feds would try to nudge them toward adopting less restrictive rules.

http://www.vox.com/2015/1/29/7946143/obama-reform-occupational-licensure

I think this is something both liberals and conservatives can get behind......you need a license to be a shampooer? Seriously?

 

[Jagger69]

A lot of these are typically just easy money-grabs for state or local governments to stuff their coffers. Some requirements are really stupid (the shampooer for instance). However, I hope this doesn't swing the pendulum too far the other direction. There are definitely certain jobs and trades that should require some sort of licensing qualification in order to be able to practice them. Here in a right-to-work state like Texas, unqualified and unlicensed contractors for various trades are a huge problem and affect businesses just the opposite of the "rising-prices" aspect about which the study seems to be concerned in addition to providing inexpensive but inferior services for clients who think they are getting a great deal for services rendered when, in reality, they are simply being ripped off. Buyer beware! Whenever I need to have and sort of semi-technical work done for me here at the house that I can't or won't perform myself, I always ask any prospective contractors if they are "licensed, bonded and insured". If the answer is anything other than "absolutely", I walk away.

 

[SabrinaDeep]

I totally agree. I have just discovered that here in Spain you need to study (and pay for it of course) for two years in order to be able to work as an AS-SIS-TANT hairdresser (shampooer, basically), 4 years for becoming a licensed hairdresser (you can't open your own business without that license). It goes alone that i'm almost never happy with the jobs done to my hair and this is to answer Jagger69: i see your point, but a license can be easily grabbed by an incompetent crook...i mean, being licensed does not protect you from jobs badly done or from bad people. Obviously i'd like to pay a licensed mastered architect to build my house, but when it comes to decorate my walls, a license is just a mere piece of paper for which i'm required to pay extra costs as a client with no guarantee for a job well done. Taking pictures, some information and references about the service provider, making sure they are insured and not paying upfront shall suffice for many services.

 

[Jagger69]

I totally agree. I have just discovered that here in Spain you need to study (and pay for it of course) for two years in order to be able to work as an AS-SIS-TANT hairdresser (shampooer, basically), 4 years for becoming a licensed hairdresser (you can't open your own business without that license). It goes alone that i'm almost never happy with the jobs done to my hair and this is to answer Jagger69: i see your point, but a license can be easily grabbed by an incompetent crook...i mean, being licensed does not protect you from jobs badly done or from bad people. Obviously i'd like to pay a licensed mastered architect to build my house, but when it comes to decorate my walls, a license is just a mere piece of paper for which i'm required to pay extra costs as a client with no guarantee for a job well done. Taking pictures, some information and references about the service provider, making sure they are insured and not paying upfront shall suffice for many services.

Licensing requirements in Texas are perhaps a bit different than where you live, Sabrina. Many licenses require proof of CE credits and possibly even testing in order to qualify. You don't just go down to the tax office pay a fee to become a licensed contractor. Otherwise, there would be no barriers to, oh let's say a roofer deciding that tomorrow he is going to start hanging drywall. Much of the problem is related to the massive influx of immigrants, many of whom are excellent craftsmen (especially in the masonry industry) but also for whom there is little to no way to ensure that they are qualified to perform their trade as advertised without licensing, bonding and insurance requirements. Again, I speak mainly of technical trades, not dog shampooers, bartenders or other similar enterprises.

I might add that, regardless of anyone's views on trade unions, they serve as excellent safeguards against unqualified contractors in most instances. I grew up in the Rust Belt Midwest where union shops are the norm and you could typically be sure that if a certified union journeyman was doing the work, it would be done right. Since there are no such safeguards (for the most part....some unions actually do operate down here but not many) in place in most of the south (Texas included), licenses can be one of the ways by which to determine the qualifications of most tradesmen. Referrals and pictures are good but can be manipulated and, in most instances, are from my experience. Who is going to refer a customer who had a bad experience or take a picture of a botched job? Nobody. I deal with this stuff every day in my line of work so it is a pertinent issue to me.

 

[SabrinaDeep]

Oh i know, i agree. I'm not totally against any type of licensing. But because you need to pay a fee to get a license, i suspect that governments, local and not, tend to exaggerate just for the sake of making more money. Common sense always fights with politics when taxes are involved. Funny enough, we have just discovered that police forces in some US states don't need to take CPR lessons...i guess that washing someone's head is seen as carrying more responsibilities than trying to revive someone you've just shot in the back.

 

[bobjustbob]

I get it from a consumer and business protection standpoint. Also remember that no public or business decisions are proposed if it doesn't involve money. If there is going a study then where does it start? Masonry is different from upholstery so each would deserve another study. So how do we decide which industries should be selected for studies? For instance, I own a hair shop. There should be licensing for protection for chemicals used. The applications should only be applied and monitored by the license holder. Scissors don't need regulating or licensing. Shampoo? Well, are we getting into the chemical prep process, texture treatment or application, or just a wash?

Say I want to have a fountain or running water display on my property. Somehow an algae grows that attracts something that spreads something onto trees that some beetles are attracted to that kills certain trees. Does my landscaper need to be an environmentalist to install my little babbling brook?

 

[ChefChiTown]

Some requirements are really stupid (the shampooer for instance). However, I hope this doesn't swing the pendulum too far the other direction. There are definitely certain jobs and trades that should require some sort of licensing qualification in order to be able to practice them.

I couldn't agree more. There are many professions which require licensing that are laughable, but there are way more which are serious business. I don't want an untrained, uneducated amateur pouring my driveway or repairing my car. I find comfort in knowing that certain professionals have had their education, training and experience reviewed and approved by somebody who knows what they're doing.

 

[Will E Worm]

Occupational Licensing

Money grabs.