More on Licensing

Obviously, not everyone agrees with me about occupational licensing rules. One obvious point to bring up here is that some people are accusing me of believing that one can do competent plumbing work without training. Obviously, that’s stupid. People don’t have an innate ability to fix pipes. You need someone who knows what they’re doing. That’s not the same as saying that you need a legally enforced licensing scheme. People are challenging me to prove that we can get along without a plumber licensing program. It’s difficult to prove the negative. One consideration to start with, though, is that the rules don’t typically require a license to do the plumbing. Consider New York City’s rules (emphasis added):

Only licensed master plumbers and their employees may perform plumbing work in New York City. A plumbing permit must also be obtained before any work begins. The NYC Building Code defines plumbing work as “the installation, maintenance, repair, modification extension or alteration of any waste, domestic water, gas, or firestandpipes in any building or piping system”. NYC also issues a license for fire suppression and piping contractors.

For information regarding the requirements, applications and scheduled test dates, contact the NYC Department of Citywide Administrative Services at (212) 669-1357. The New York City Department of Buildings issues the license for master plumbers after they have passed the examination and have cleared a background check.

The “and their employees” provision is a dead giveaway. From a consumer point of view, there’s no guarantee that your work will be done by a licensed plumber, so it clearly can’t be the case that we need this rule in order to ensure that work is up to licensed plumber standards. Rather, effect of the law is to ensure that there’s a certain set of people who are perfectly qualified to perform a range of plumbing-related tasks but can’t legally perform those tasks without giving a licensed master plumber a piece of the action.

And of course I don’t want to pick on the plumbers here. In practice, plumbing related issues aren’t that important. And certified master plumbers, though not the wretched of the earth, aren’t exactly fat cats either. But basic dental hygiene is important. There’s a serious problem in the United States where poor people can’t afford standard teeth cleanings, which leads to more serious problems down the road. That’s a public health issue, and it’s also an economic opportunity issue because people missing teeth and so forth have problems getting jobs. The cost of basic teeth cleaning would be lower if it were possible for dental hygienists to operate independently performing their service (cleaning teeth) for a fee. But in general, they’re not allowed to do that — dental hygienists must work for dentists. This is good for the relatively privileged dentists, but bad for the relatively unprivileged hygienists, and bad for patients.

Now dentistry is a medical field and clearly I think there’s a case for some measure of licensing and standards in that regard. I’m not a fundamentalist on this. But still, even in a field where the case for some regulation is fairly compelling, our actual regulations go too far. And not everything is as serious as dentistry or even plumbing. Is it really a good idea to make it illegal to cut hair for a fee without a license? Or how about braiding hair:

On July 1, 1998, a pair of undercover police officers posing as husband and wife walked into Braids by Sabrina, a small shop in Compton, Calif. After the store’s proprietor, 29-year-old hair braider Sabrina Reece, spent five hours braiding the woman’s hair, the male officer handed her $150 for his “wife’s” new hairstyle.

The woman excused herself to use the bathroom and came back out wearing a jacket emblazoned with POLICE on the back and a pistol on her hip. At first Reece didn’t pay her any mind; black policewomen get their hair braided too. But the next thing she knew, a third police officer came barging in from outside the store, barking orders at her.

“The officer came into my shop and told me to sign a piece of paper, or he was going to arrest me,” says Reece, who reluctantly signed the ticket, which ordered her to appear in court. She was caught in a hair sting. She was fined $1,000 by the state cosmetology board for violating the law. The Department of Consumer Affairs says that hair braiding in California is illegal unless a practitioner has a cosmetology license, which Reece doesn’t have.

Can I prove that this law doesn’t somehow improve people’s lives? No, I can’t. But the point is that the burden of proof should be on the proponents of these licensing regimes to show that they’re doing some good. Do states and localities with more stringent rules governing who can style hair get any benefit from that? You can go on and on down the line. I’m not someone who thinks we should have a totally deregulated economy. Far from it! Where appropriate, I love regulation. Regulation to promote public health or cut down on pollution. Regulation of the financial services sector to prevent, well, you know. Regulation of who’s allowed to get public sector jobs that would otherwise become patronage mills. But regulation of who’s allowed to try to run a small business? It’s silly. Ultimately, the best guarantor of quality service in most of these fields is going to be market competition. That means lowering barriers to entry rather than raising them.