Occupational licensing laws are commonly said to be necessary for safety and quality assurance for consumers and workers. The reality, though, is that licensing laws frequently stand in the way of people trying to earn an honest living, are used to protect entrenched businesses from competition, and are incredibly over-reaching, arbitrary, and extremely harmful and burdensome for low-income individuals and families. Occupational licensing is nothing more than a government permission slip to work.
Nearly 30 percent of all American workers need a government license in order to lawfully do their job, which is up from 5 percent in 1950. This licensing reaches far beyond doctors, lawyers, and teachers. Many states require licensing for florists, make-up artists, hair braiders, travel guides, interior designers, ballroom dance instructors, locksmiths, and upholsterers.
Occupational licensing is not about ensuring safety, which can be seen in the arbitrary ways that licensing is applied. In North Carolina, California, New Mexico, and New York cutting hair requires hundreds of hours more training than becoming a police officer. Being a city bus driver, paramedic, and animal control officer all require far less training than needed to become an interior designer.
Economic mobility, especially for those on the lower rungs of the economic ladder, is stifled by these sorts of economic regulations. These laws, which are enforced through the threat of jail (and people have been arrested for engaging in unlicensed yet voluntary economic exchange), make many job options simply out of reach for the poor. Having to work unpaid for a year or more, and then pay several hundred or thousands of dollars for a license simply is not viable for people who need to feed, house, and clothe their families immediately.
Empirical studies show that licensing reduces an occupation’s employment by up to 18 percent, raises its wages up to 15 percent, and raises costs on consumers up to 16 percent, yet rarely shows an improvement in service safety and quality. And often times it is entrenched business interests that lobby for these regulations, in order to protect their business and continue to profit, all at the expense of the jobs of smaller, poorer competitors.
We should not need the government’s permission to work. Moreso, we should not fear being thrown in jail for working without the government’s approval. That is precisely what is taking place today, across America. And it is negatively impacting the lives of those who wish to earn an honest living, but can’t afford to pay off the government and the licensing authorities it has established.