July 31, 2014

How Licensing Laws Kill Jobs

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Fish Spa pedicure How Licensing Laws Kill Jobs

Fish pedicures are a barely-taught aesthetic procedure -- but to perform them in most states, you still have to go to beauty school.

by Lisa Knepper 

Jestina Clayton is the type of entrepreneur we should be encouraging if we want to put more Americans back to work. Instead, the state of Utah shut her down.

Her offense? To help support her young family while her husband was in school, Jestina turned to a skill she learned growing up in her native Sierra Leone: African-style hairbrading. But Utah said that braiding required a cosmetology license, which requires 2,000 hours of training at a cosmetology school — which, in turn, teaches little or nothing about African hairbraiding.

The dirty little secret of licensing is that no one likes it more than the licensed. Rarely, if ever, do consumers clamor for protection from unlicensed providers, nor should they. Licensing costs consumers billions a year in higher prices and does little to improve service quality.

Instead, licensing typically results from industry interests lobbying for laws to limit competition. And once those laws are in place, established interests will use them aggressively to target unlicensed competitors.

A 2011 strategy document for the Academy of Nutrition and Dietetics (formerly the American Dietetic Association) identified a “significant competitive threat” to registered dieticians from nutrition professionals, nurses, pharmacists, and others providing nutritional advice and urged dieticians to “increase our vigilance in reporting unlicensed competition” to state authorities. Interior designers have done the same: 95 percent of complaints to interior design regulatory boards were licensure-related, one study found, while just 1.6 percent were for fraud or other genuine consumer complaints.

Read the full story and comment here: http://www.theatlantic.com/business/archive/2012/09/how-licensing-laws-kill-jobs/262164/


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