“The harm of licensing rules shouldn’t be underestimated: By one assessment, such regulation has prevented the creation of nearly three million jobs and lowered entrepreneurship rates…

…Instead of licenses, states could require certification, a lower qualification that doesn’t bar outsiders from offering a similar service. Reducing burdensome requirements on job seekers is part of reforming the criminal justice system. If nonviolent ex-offenders who paid their debt to society aren’t able to obtain a license for certain types of employment, how can we expect them to rejoin society, partake in American life, create value in their communities and improve their lives? By removing these needless barriers to opportunity, we can offer a hand up to the people who need it most.”, Mark V. Holden, “How to Keep the Unemployed Out of Work”, The Wall Street Journal, December 9, 2015

Opinion

How to Keep the Unemployed Out of Work

Licensing is often just a way to thwart competition—in several states, a license to braid hair requires 1,500 hours of training and multiple exams.

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PHOTO: GETTY IMAGES/ISTOCKPHOTO

 

By Mark V. Holden

More than 200 years ago, Thomas Jefferson wrote: “The natural progress of things is for liberty to yield and government to gain ground.” Although Jefferson didn’t have CrossFit trainers, cosmetologists, hair braiders and ride-sharing companies in mind when he penned this prescient line in a letter to Edward Carrington, they’re a perfect demonstration of the truth of the sentiment.

Earlier this year the White House released a report detailing how occupational licensing laws affect the economy: “more than one-quarter of U.S. workers now require a license to do their jobs” and “the share of workers licensed at the State level has risen five-fold since the 1950s.”

If that sounds benign, consider that licenses for low- and middle-income professions on average cost more than $200 and require nine months of training and at least one exam, according to the Institute for Justice. There’s scant evidence that these hurdles improve quality or safety, so why does government make it so difficult for Americans to improve their lives by plying a new trade?

It takes 372 days on average to become a licensed cosmetologist, but only 33 days to become an emergency medical technician, known as an EMT. In several states, a hair-braiding license requires 1,500 hours of training and multiple exams. For those with limited means, that may prove impossible.

Rather than removing these obstacles, government at all levels increasingly protects the “haves” at the expense of the “have-nots.” Consider the response to Uber, which threatens the municipal taxi system monopoly. Instead of allowing entrepreneurs to develop services that succeed or fail on the merits, politicians have encouraged businesses to seek out favors. As a result, politicians try to protect their supporters from competition instead of encouraging it.

Last year the city council of Washington, D.C. passed a measure requiring CrossFit and other fitness trainers to register with the mayor’s office and pay a fee. But it was heartening in September to see the council take steps to scrap the idea of requiring them to obtain a license from the city.

Who pushed for these laws? The Board of Physical Therapy, a little-known agency within the D.C. Health Department charged with regulating the practice. This board, composed mostly of physical therapists, is a textbook case of a special interest working with the government to restrict competition.

Lawmakers across the country are beginning to see the folly of such requirements. Legislators in Georgia, Idaho, Iowa, Michigan and Wisconsin are considering abolishing and even prohibiting new occupational licenses.

The harm of licensing rules shouldn’t be underestimated: By one assessment, such regulation has prevented the creation of nearly three million jobs and lowered entrepreneurship rates. Instead of licenses, states could require certification, a lower qualification that doesn’t bar outsiders from offering a similar service.

Reducing burdensome requirements on job seekers is part of reforming the criminal justice system. If nonviolent ex-offenders who paid their debt to society aren’t able to obtain a license for certain types of employment, how can we expect them to rejoin society, partake in American life, create value in their communities and improve their lives? By removing these needless barriers to opportunity, we can offer a hand up to the people who need it most.

Mr. Holden is general counsel and senior vice president at Koch Industries.

Posted on December 9, 2015, in Postings. Bookmark the permalink. 1 Comment.

  1. Excellent article….more examples of cronyism in practice….even in niches like cosmetology and hair braiding…unreal!

    Mark Nelson 3256 Sitio Tortuga Carlsbad, CA 92009 760.473.7558 mnelson.doit@gmail.com

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