Minnesota Lawmakers: Kill Regulations, Create Jobs

A bipartisan coalition in Minnesota has introduced a new bill to repeal some occupational licensing laws. Called the Licensing Relief and Job Creation Act (SF 1629/HF 2002), this would protect "the right to engage in a lawful occupation free from any substantial burden."

Since these regulations tend to heighten income inequality between the licensed and unlicensed, University of Minnesota Professor Morris Kleiner even calls occupational licensing a "reverse Robin Hood." By eliminating "unnecessary regulations," some legislators have suggested that this law could create over 15,000 new jobs in Minnesota.

Due to the growth in the service economy, a surprisingly high number of Americans need a license to work. According to the Institute for Justice (IJ), 29 percent of American workers are licensed by state or federal government. In the 1950s, that number was 5 percent. In fact, there are more licensed Americans than Americans who are union members (12 percent) or earn the minimum wage (2.5 percent).

Defenders of licensing laws argue that these laws are essential to defend consumers' health and safety from unscrupulous businesses. However, there are two major problems with this reasoning. First, many occupations that require licenses are hardly threats to public health, like masseuses, tour guides, hair braiders, and tree trimmers, among many others. Furthermore, the process to obtain a license can be unnecessarily arduous and complex. For example, a manicurist in Alabama needs 700 hours of training before she can be licensed.

Second, consumer protection is better accomplished through other means. Lee McGrath, a staff attorney for the Institute for Justice, explains:

If you want to protect consumers, vigorously enforce existing laws against fraud, but don’t limit entry in to the marketplace, especially by imposing academic tests that often have nothing to do with the services provided.

In addition, occupational licensing creates a significant economic burden. Everyone, except for the incumbent cartel, suffers. Since licensing artificially restricts competition, on average, Minnesotans pay 15 percent more for licensed goods and services. These higher prices cost consumers more than $3.6 billion each year, just in Minnesota, according to a legislative brief published by IJ. Nationwide, the occupational licensing is responsible for 0.5-1 percent of the unemployment rate, according to research conducted by Professor Kleiner, Alan Krueger, chairman of the White House Council of Economic Advisers, and Alexandre Mas, a former Chief Economist at the Office of Management and Budget under President Obama.

Reason's voluminous coverage of occupational licensing. Damon Root on why these licensing laws are unconstitutional (short answer: the 9th and 14th Amendments). And be sure to check out the Institute for Justice for more on defending economic liberty and property rights.

Reason.tv on the dangers of throw pillows.

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  • RoboCain||

    I have a license to ill.

  • Taste Police||

    We issue no such license, nor do you need one.

  • oo||

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  • ||

    Master Shake: Neil! You said you were fully licensed to do this!

    Neil: Well, Yeah, I said that, but um, my Dad's an attorney, and he says you got to get everything in writing. Sorry.

    Master Shake: Fine. You know what? I'm ending this now. Goodbye, goodbye, goodbye.

    Neil: Bye.

    Master Shake: Nice to meet you all. I'll see you all in hell. [sticks a shotgun in his mouth and kills himself]

  • Gojira||

    I was gonna start this pressure-washing business, Meatwad Pressure Washing, and the man said I had to have a license from the city.

    I said, "A license? I'm not even supposed to BE in this country!"

  • Baaka Chu||

    When the cop asked me for my driver's license I said, "Hah, who would give ME a license?"

  • ||

    For example, a manicurist in Alabama needs 700 hours of training before she can be licensed.

    Do you have any idea of the suffering caused by improperly treated hangnails?

  • Apatheist ಠ_ರೃ||

    or earn the minimum wage (2.5 percent).

    Wow I didn't realize it was so low. So it doesn't even work as a populist argument? 10% unemployed vs. 2.5% at minimum wage along with everybody paying higher prices. What exactly is the argument for minimum wages again?

  • Almanian||

    BECAUSE TEH LIVING....WAGES AND PEOPLE!!!11!

  • Joe M||

    Furthermore, the process to obtain a license can be unnecessarily arduous and complex. For example, a manicurist in Alabama needs 700 hours of training before she can be licensed.

    Have you ever accidentally cut to the quick? That shit hurts!

  • romulus augustus||

    I think baristas should be required to have bachelor degrees. Oh, wait...

  • ||

    Starbucks is now asking for Masters' degrees from new applicants.

  • SIV||

    In the Liberal Arts. I don't want some uncultured social science major pouring my coffee.

  • Gojira||

    I really want someone to ask one of these pro-licensing people point-blank, "Why aren't there the sort of disasters you claim you're preventing in states that don't license these activities?" and see what they say.

    Interior designers in Florida, for instance.

  • Gojira||

    And no matter what they said, I would politely ask to use the restroom, and leave them an upper-decker.

  • Almanian||

    nice

  • ||

    "M'kay, you all might think that dropping a dook in the urinal is a victimless crime, m'kay! Because SOMEONE had to walk into the bathroom, drop their pants, turn around...maybe spread their butt cheeks apart with their hands...and squeeze out a chocolate hot dog."

  • ||

    I feel as if "an upper decker" should refer to (deliberately) pooping ON the toilet seat as opposed to in that nasty hole.

    But that's just, like, my opinion...man.

  • Barack Obama||

    Kill regulations, Create Jobs
    I prefer when things are the other way around

  • Mike Spinney||

    Steals from the rich, gives to the poor; Dennis Moore, Dennis Moore, Dennis Moore!

  • ||

    But he's giving them lupins!

  • Binky||

    Due to the growth in the service economy regulation-writing and -enforcement government, a surprisingly high number of Americans need a license to work.

    FTFY

  • ||

    Exactly.

  • ||

    Cui bono?

  • better headline||

    Minnesota Lawmakers: Kill Themselves

  • better headline||

    Minnesota Lawmakers

  • LP||

    Another reason licenses are bunk: when new licensing regulation takes effect, current workers in the industry are almost always free from abiding by the new restrictions.

  • Robert||

    Come on, be reasonable...if they weren't exempted, then instantly there'd be nobody allowed to practice it.

  • Double D||

    Kill Regulations, Create Jobs

    Say it with me: DUHHHHHH!

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