Occupational Licensing

California's Bipartisan Push Against Occupational Licensing

Removing barriers to entrepreneurship for the poor.


In an election year, it's hard to imagine any substantive issue transcending the din of partisan bickering and resulting in meaningful proposals embraced by members of both parties. Yet such an issue is emerging in California. Many Democrats and Republicans are recognizing the role that overly restrictive "occupational-licensing laws" play in limiting opportunities for the poor, ex-convicts and veterans.

Licensing laws require barbers, contractors, interior designers and people in myriad lines of work to complete training and pass a test before legally plying their trade. It sounds reasonable at first given that everyone wants service providers to be competent in their chosen fields. Advocates argue the public's health and safety is at risk without such rules and regulations.

But the dirty secret of occupational licensing is these laws often are backed by lobbyists representing established businesses. Licensing requirements often have less to do with ensuring competence and more to do with imposing costly and time-consuming barriers that limit the competition. Costly licenses and education requirements push some professions out of reach for low-income people. Because licensing rules vary by state, it becomes tough for the spouses of veterans to gain licenses when they move to another base.

One highly publicized national example involves African hair braiders, who in some locales must spend hundreds of hours in a cosmetology program to be allowed to practice their trade—even though they may learn little that has anything to do with their particular skill. In those places, the government turns entrepreneurs who don't go through the long training into scofflaws.

California's Little Hoover Commission, an independent oversight agency, recently held a hearing in Sacramento to evaluate the situation. It eventually will make some recommendations to the Legislature. Panelists pointed to the myriad inconsistencies and counterproductive elements in California's array of occupational-licensing laws.

"In California, barbers and cosmetologists devote about one year to education or experience, and EMTs (emergency medical technicians) only one month," explained (in prepared testimony) panelist Dick Carpenter, of the libertarian Institute for Justice. "Comparisons like these lead one to question the public safety rationale underlying licensure of many occupations in our sample." California has some of the tightest restrictions in the country.

California legislators regularly propose bills that give state enforcement officials more power to fine and arrest people who are operating without a license. But this Little Hoover Commission effort recognizes that a big part of the problem is a regulatory regime that criminalizes people who are working and selling their services to willing buyers.

In his testimony, Professor Robert Fellmeth, of the University of San Diego School of Law, explained "there are some clearly necessary regulatory systems," but "a substantial portion" of California's occupational-related rules impose "unnecessary barriers to entry" and "limit entry but thereafter fail to provide an assurance of competence."

He pointed to a key problem: "Most trades have sophisticated lobbies at the state Capitol. … These are the proponents of most of the regulatory boards within the (Department of Consumer Affairs) in particular; they have actively lobbied for licensing by boards whose membership and licensing fees… they control."

Advocates for such systems ask, "How else can the state assure that these practitioners know what they are doing?" Panelists brought up several alternative ways to police these industries. For instance, voluntary certifications are a successful means to assure that people comply with industry standards. The state wouldn't stop someone from operating—but the certification tells consumers of a certain level of training.

Market competition provides checks and balances, Carpenter added. He pointed to the information available today through Yelp, Angie's List and other websites. That's more useful than simply learning whether the company has a license. After I purchased a home, the insurer sent out an inspector who flagged a potential roof problem. I would lose my coverage by a certain date if I didn't fix it. This is a perfect example of private regulation. In a private system, though, I'm free to fix the problem or find an insurance company with different standards.

Additionally, as Carpenter added, the tort system exists to address "consumer harm." There are laws against fraud and deceptive trade practices. Some laws simply require inspections (such as building inspections) or people to carry insurance or be bonded. Legislators could also streamline and eliminate some of the current rules. Some other states have embraced such reform.

California has the highest poverty rate in the nation, adjusted for the high cost of living. Instead of focusing solely on new welfare programs, the Legislature ought to eliminate barriers that poor people face as they seek jobs or try to start businesses. Reformers will face resistance from established interests, but maybe the Little Hoover effort will give them the courage they need to tackle this issue.

This column originally appeared at the San Diego Union-Tribune

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  1. Luilville, Caliifornia?

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  2. “barbers and cosmetologists devote about one year to education or experience, and EMTs (emergency medical technicians) only one month”

    Well, to be fair, a cosmetologist usually spends a lot more time with you than does an EMT.

    *** bites lip ***

    1. Maybe tag-usage should be licensed.

  3. On a quick scan, I don’t see a single elected member of the legislature quoted in support. So that “potential bipartisan coalition” looks like vaporware, at this point.

    1. Yeah, it’s not bipartisan support when you don’t have any politicians on your side. That’s bipartisan opposition.

      Not that I ever expect competence or economic literacy from any politician in Kalifornistan.

  4. Huh, I was told that red states all have the highest poverty rates in the country. Obvious rat fucking tea bagger lies are at work in this article.

    1. Most lies are communist lies.

  5. The idea of authoritarian lefties becoming libertarian lefties? It would be nice but I’ll believe it when I see it.

    1. You sir need a cocktail

      1. Here I am at a bar right now! I shall take your advice.

  6. It’s bi-partisan when they flip over and bite the pillow.

  7. “”Jackbrahms Barth
    Yeah. I’ve always wanted to operate on hearts. Just let me make a good living. And if I do kill you, you can SUE me.”

    Ah, California. The Big One can’t come soon enough.

    1. I liked this retort.

      “John Oliver ? UCSD Extension
      That’s EXACTLY what Steve Greenhut and Republicans are looking for! To let just anybody claim to be in any profession! They must be stopped, or we’ll be EXACTLY LIKE SOMALIA!”

      Not all of us in this state are that much of an idiot.

  8. Barbers can give me a bad haircut which can last for, like, days, maybe even a week. If EMTs fuck up, I can end up dead and my styling won’t matter. WHAT’S THE BIGGER DEAL, PEOPLE?!?!?!?11?1

    1. The one with the biggest campaign contributions of course.

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  10. “How else can the state assure that these practitioners know what they are doing?”

    I’m fine with state *certification*. Let the state certify, but let me *choose* whether I give a damn about what the state certifies. If I want to buy from someone uncertified, get off our backs.

    Of course, that’s treating the *rationalization* for power, as the reason for it.

    The reason is more like:

    “How else can the state reward its friends and punish its enemies?”

  11. One early example of California’s penchant for erecting hoops and roadblocks yet failing utterly to vet trade practitioners in any meaningful way is the Bureau of Automotive Repair, a scam revenue generator foised on the unsuspectinb public in about 1972. Upon receipt of a fee, then a mere $25 (vehicle registration at the time cost half that) one could take out a license (mother may I card) to work on other people’s cars for money. It “gave” the customer some “rights”…. to get a written estimate up front (what wrench would fail to do that?) return of the replaced parts (or simply showing them in cases where the dead one was returned for remanufacture), a phone cal to authorise any costs above the estimate, and (here’s the one they used to market the scam) the “right” to sue in Small Claims Court if wronged by the repair facility. (a right everyone already had before the BAR was manufactrured). Anyone caught wrenching for pay could be fined, forced to get the Mother May I Card (with penalties for not having so done bEFORE hanging out one’s shlngle….) but absolutely NO requirement or evanluation of the “practitioner’s” experience or skill. A revenue generator.

    1. Where I lived and worked we all had a great laugh on the stuipd scam when a local guy, having lost an arm in a workplace accident, and having been badly cheated by the state’s Workmen’s Comepansation Fund) had to feed his familiyh somehow… and did the odd repair job for others in town. Sure, he took longer, but he eventually got it done, and done well. The local BAR beast caught wind of him and cited him for “operating without being registered”, into the local court. Tne state hooh hah got up in front of the judge and made his case, documents, claims, presented a witness or two….. then the clerk called for the defendant…. when the one armed “mechanic” rose and walked forward, wearing blue jeans and a tee shirt, his short stump not quite hanging clear of his sleeve, the judge demanded to have the DEFENDANT come forward. The state hooh hah assured the judge this man was his victim, er, accused. The judge picked up his gavel banged it on the bench and said CASE DISMISSED. There is NO WAY a man can be working as a mechanic with only one arm. You, sir, are free to go.

      The gallery erupted in cheers…. justice was served….

      an early example of how that stupid state treads people into the ground with bureaurocracy, red tape, fees, hoops, barriers to entry…. and wasted tax money.

      1. I just love a good story with a happy ending.

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  14. An excellent article with good examples of the problems of licensing (only 1 month training for EMTS?) and alternatives, such as certification and insurance. Even if they aren’t successful in passing reforms in California, it’s good to raise awareness about licensing and the alternatives.

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