NCPA - National Center for Policy Analysis

Calls for Professional Licensing Spread

February 9, 2011

Amid calls for shrinking government, cat groomers, tattoo artists, tree trimmers and about a dozen other specialists across the country are clamoring for more rules governing small businesses, says the Wall Street Journal.

  • They're asking to become state-licensed professionals, which would mean anyone wanting to be, say, a music therapist or a locksmith, would have to pay fees, apply for a license and in some cases, take classes and pass exams.
  • The hope is that regulation will boost the prestige of their professions, provide oversight and protect consumers from shoddy work.

But economists -- and workers shut out of fields by educational requirements or difficult exams -- say licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services.  While some states have long required licensing for workers who handle food or touch others -- caterers and hair stylists, for example -- economists say such regulation is spreading to more states for more industries, says the Journal.

  • In 2008, 23 percent of U.S. workers were required to obtain state licenses, up from just 5 percent in 1950.
  • In the mid-1980s, about 800 professions were licensed in at least one state; today, at least 1,100 are.
  • Among the professions licensed by one or more states: florists, interior designers, private detectives, hearing-aid fitters, conveyor-belt operators and retailers of frozen desserts.

At a time of widespread anxiety about the growth of government, the licensing push is meeting pockets of resistance, including a move by some legislators to require a more rigorous cost-benefit analysis before any new licensing laws are approved.

  • Critics say such regulation spawns huge bureaucracies including rosters of inspectors.
  • They also say licensing requirements -- which often include pricey educations -- can prohibit low-income workers from breaking in to entry-level trades.

Source: Stephanie Simon, "A License to Shampoo: Jobs Needing State Approval Rise," Wall Street Journal, February 7, 2011.

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