Licensed to Decorate

June 1, 2012

A recent survey conducted by the Kauffman Foundation in partnership with Thumbtack.com found that state occupational licensing requirements impose a substantial burden on businesses, especially small ones, says Matthew Yglesias, Slate Magazine's business and economics correspondent.

  • A recent comprehensive survey of state licensing practices by the Institute for Justice reveals little consistency or coherent purpose behind most licensing.
  • Nevada, Louisiana, Florida and the District of Columbia, for example, all require aspiring interior designers to undergo 2,190 hours of training and apprenticeship and pass an exam before practicing.
  • In the other 47 states, meanwhile, there's no legal training requirement.
  • Similarly, New York barbers need 884 days of education and apprenticeship before they can practice, whereas New Jersey requires only 280 days and Alabama has no requirement at all.

Not all licensing requirements necessitate training or experience -- many simply place conditions on what type of person may apply.  Becoming a locksmith, for example, requires a high school diploma in New Jersey or 21 years of age in Oklahoma.  States should ask themselves if these requirements are worth it if they define broad swathes of unemployed workers out of vital labor markets.

Additionally, researchers have noted that these licensing requirements are spreading rapidly.

  • Morris Kleiner of the University of Minnesota and Alan Krueger of Princeton University have found that in the early 1950s, less than 5 percent of the population worked in occupations covered by state licensing rules.
  • Today it is well over 20 percent.
  • Perhaps most essential here is that many of the occupations that are newly licensed should not need regulation -- being a below-average interior decorator, for example, undermines the decorator's ability to get future business.

States should seriously reconsider the proliferation of these licensing requirements, taking into account their negative impacts on employees and small employers.

Source: Matthew Yglesias, "Licensed to Decorate," Slate, May 20, 2012.

For text:

http://hive.slate.com/hive/10-rules-starting-small-business/article/licensed-to-decorate

 

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