Monday, June 20, 2016
You Got a License to Do That?
“A bad
haircut is the last thing that a person is going to put up with and return to.
It is the ultimate example of self-regulating industry.” Mark Hutchison, a
Republican and the lieutenant governor of Nevada
The old rule of thumb
was that if you are in China, you can do only what is specifically permitted,
but in the United States, you can do anything that is not forbidden. But over
the years, states have continuously added regulations to limit, regulate and
generate fee income from a host of jobs and prevent those licensed in other
states from crossing over. Such regulations also have a de facto exclusionary
pressure against those without the means to qualify, usually the poor,
immigrants and ethnic minorities. Funny how licensing in states with rather
clear anti-immigrant, anti-minority biases is often more stringent than in
states with more open hearts. In many ways, we are becoming more restrictive
than China.
“Today, nearly 30
percent of the American work force needs a license to work, up from about 10
percent in the 1970s, according to Morris Kleiner, a professor of public
affairs at the University of Minnesota, who has studied the issue.
“The Obama
administration and the conservative political network financed by the Koch
brothers don’t agree on much, but the belief that the zeal among states for
licensing all sorts of occupations has spiraled out of control is one of them.
In recent months, they have collaborated with an array of like-minded
organizations and political leaders in a bid to roll back licensing rules.” New
York Times, June 17th.
From hairstylists and
barbers to those who raise money for small business, and obviously doctors and
lawyers. “In Tennessee, a license is required to shampoo hair; in Florida, to
sell a yacht. In Montana, you need the state’s approval to be an egg candler
[pictured above]; in Utah, to repair upholstery; in Louisiana, to be a florist.
“No one disputes that
health and safety concerns make licenses indispensable in certain demanding
professions, like nursing or flying a commercial airplane, and they are
sometimes helpful in improving standards and providing quality assurance to
consumers.
“But the current
mishmash of requirements is too often ‘inconsistent, inefficient, and
arbitrary,’ a White House report concluded last year. Many of them, the report
said, have little purpose other than to protect those already in the field from
further competition.
"Requirements for the
same job often have whiplash-level variation. South Dakota requires 2,100 hours
of education and a cosmetology license to braid hair — a popular entry point
into the labor force for African-American women. South Carolina demands only a
six-hour course.” NY Times. Arizona resident, Grace Granatelli, made her living
massaging animals, a service that is not provided by veterinarians. “But in
2013, Arizona’s Veterinary Medical Examining Board sent her a cease-and-desist
order, demanding that she close up shop for medically treating animals without
a veterinary degree. If not, the board warned, every Swedish doggy massage she
completed could cost her a $1,000 fine.
“To comply with the
ruling and obtain a license, Ms. Granatelli would have to spend about $250,000
over four years at an accredited veterinary school. None require courses in
massage technique; many don’t even offer one.” NY Times. Such restrictions are
particularly hard on military families, who are often transferred from state to
state, where the spouse was licensed in the last state but has to jump through
major qualifying hurdles in the new state.
These deeply
anti-competitive requirements, particularly those that do not reflect on health
and safety or obviously complex and demanding job skills, are of little benefit
to anyone except those already in the restricted field. The licensing boards
are usually “insiders” with an even stronger reason to keep competitors out.
“Economists on both the left and the right argue that excessive licensing
raises prices for consumers without improving services; it can also deter
potential workers from moving across state lines, dragging down employment
growth.
“‘There is no labor
economist who thinks it is good for the economy,’ said Lee U. McGrath,
legislative counsel in Minnesota for the Institute for Justice, a libertarian
organization whose lawyers are representing Ms. Granatelli in a lawsuit against
the Arizona veterinary board.” NY Times. For those with prison records, the ability
to return to society is hard enough without the 27,000 licensing restrictions
across the country aimed at keeping them out.
“The most regulated
states, paradoxically, are red. ‘Even Republican governors with Republican
legislatures in pretty conservative states have still found it extremely
difficult to effect change,’ said Dick M. Carpenter, strategic director of the
Institute for Justice. ‘When there is an effort to dial back legislation, then
the licensed industry turns out with huge counterattack. This is the same story
that plays out in every state.’” NY Times. The discrimination is often
less-than-subtle discrimination. Incumbents love reducing competition and in
conservative states, anything that “keeps them out” and insures a rough road
for minorities, likely to hold more liberal views. Folks who “are different
from us.”
So what’s being done
about these obviously biased laws? “The power of licensing boards was
challenged last year when the Supreme Court ruled that the North Carolina
dental board could be sued under federal antitrust laws for shutting down
teeth-whiteners because they were not licensed dentists… The court’s decision
may prompt some states to monitor licensing boards more closely, said Robert C.
Fellmeth, executive director of the Center for Public Interest Law at the
University of San Diego.
“At the state level,
the Institute for Justice has filed lawsuits arguing that various licensing
boards are unconstitutionally interfering with the right to earn a living. That
includes the one brought by Ms. Grantelli and two experienced horse massagers,
Celeste Kelly and Stacey Kollman in Arizona…
“On [June 17th], the
White House announced that it would provide $7.5 million in grants to
organizations interested in working with states to reduce overly burdensome
licensing and make it easier for licensed practitioners to work across state
lines, an issue of particular importance to military families.
“‘This grant is the
first time the federal government has directly gotten involved to help states
that want to reform their licensing practices,’ Jason Furman, chairman of the
White House Council of Economic Advisers, said in an interview. ‘It was
something a Democratic president proposed and a Republican Congress passed.’”
NY Times.
Increasingly,
protectionism – versus justifiable regulatory oversight – is the motivator.
Keep the darker-skinned people out. Keep migrants out. Keep less affluent
people out. Keep even qualified people who would compete with local business
out. And protectionism means higher prices, fewer services and less
competition. Not to mention the moral questions.
I’m Peter Dekom, and more and more, the new American value seems to be “I
get to keep what I have and make sure you never get a shot at having it too.”
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