Millennials

Millennials Hurt By Occupational Licensing Laws

Young people entering the workforce without a degree or a "rent-seeking" license face low wages, if they can even find a job.

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Millennials seeking to enter the workforce without

Government is ways to keep you out of the workforce.
Dreamstime.com/Iqoncept

a college degree or some form of occupational license are more likely to be unemployed or paid 13 percent less than their better-credentialed contemporaries. 

Analyzing a recent report from the Bureau of Labor Statistics which includes a "trove" of previously unexamined data, FiveThirtyEight's Ben Casselman writes that "Close to a quarter of workers, 22.4 percent, have a government-issued license, and 25.5 percent have either a license or a privately issued certification." Women without a license or degree are hit particularly hard, with nearly two-thirds earning fewer than $540 per week.

Casselman also notes that the State of New York has 130 different occupations requiring licenses listed on its labor website, and that a 2015 report from the White House on occupational licensing "found that occupational licensing requirements have quintupled over the past 60 years."

Reason contributor J.D. Tuccille recently wrote about the increasing bipartisan distaste for the "maze of bureaucracy" which benefits established business interests and politically-connected cartels at the expense of the greater economy. 

Readers of Reason know we often cover the pernicious effects of occupational licensing on people's ability to move from state to state or start new businesses, to say nothing of the punitively high fees involved with getting licensed, but in an article this past February, Casselman eloquently defined the term "rent-seeking" as it relates to licensing:

Defenders of occupational licensing typically argue that the rules help protect consumers and workers, and that's undoubtedly true in some cases. I want the people filling my cavities to know what they're doing. But it's hard not to suspect that in many cases, these rules serve another purpose: to make it harder for new competitors to enter the marketplace. In Nevada, according to Politico, barbers need more than two years of training to qualify for a license; that's a high bar to anyone looking to break into the business.

Economists call this kind of behavior "rent-seeking," which is another way of saying "gaming the system to make more money than you've earned." (A company that wins a no-bid contract through political connections is a rent-seeker. So is a CEO who gets a raise by stacking the board of directors with friends.) Occupational licenses are good for existing businesses, which face less competition, and for workers who already have licenses, who according to one study earn roughly 15 percent more than they would in a free market. But they're bad for everyone else. Research has found that occupational licenses inhibit entrepreneurship, especially among low-income workers. They also raise prices, lower productivity and limit workers' ability to change careers or cities. One recent study estimated that licensing laws cost the U.S. as many as 2.85 million jobs.

Given that young adults are the most adversely effected by the occupational licensing regime, you can't help but feel the millennials so in thrall with Bernie Sanders missed their opportunity to demand of the democratic socialist — who so often tries to buy their affections with promises of free stuff — that he evolve his unwavering faith in the force of government and just help them cut back on the red tape so they can get jobs. 

NEXT: Bernie Sanders Calls Out Hillary Clinton for Supporting Soda Taxes

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  1. Do you know how many credit hours are required to get your “Safe Space Attendant” license in New York? And don’t even get me started on the federal OSHA roadblocks for “Manbun Stylist” and “Outrage Outreach Coordinator.”

  2. I’m opposed to occupational licensing, but I do have a little bit of trouble shedding any tears for the Millennials getting screwed by it. The bulk that I’ve ever talked to or debated with think the government should be in the business of picking winners and losers. They just has a sad that they’re not the ones getting picked to be the winner.

  3. the increasing bipartisan distaste for the “maze of bureaucracy” which benefits established business interests and politically-connected cartels at the expense of the greater economy.

    I haven’t read Too-Chilly’s article, but I hope it’s true. Because in my neck of the woods, there is no bipartisan distaste for the “maze of bureaucracy”.

    1. Talk to any small-business owner. I’ve talked to various mom’n’pops here in Brooklyn and believe me you’ll get an earful.

  4. Honestly, with the way I see my generation acting and voting – they don’t deserve good jobs. They don’t deserve anything. I worked my ass off and got my degree while I held down a job to pay rent during college. They want to mandate a wages that took me 8 years of work to achieve (and surpass). Screw my entitled generation, fuck it, let ’em live in squalor. They might push for laws to limit my freedoms – but ultimately, I’ll be relatively safe while they bear the brunt of their undercooked policy preferences.

    This is why I sought a very safe job in an industry partially subsidized by government – I saw the way that the wind is blowing.

    1. While the entitlement mentality exists, I think it’s overstated. I think most/many people our age are hardworking; the problem is they (many of them) ‘care’ too much (while also not really caring enough? we’ll vote and push for good-intentional but actually-detrimental policies and leave it at that) so they desire to help the nebulous less-well-off, not thinking about the practical and unseen insidious effects of the policies and ideologies they support.

      It scares me. What’s that C.S. Lewis quote so beloved by you libertarians?

      Keep in mind this wage was passed and signed into law by old fux. Stupidity is ageless. I’m not sure our cohort is any stupider economically in the aggregate than the interwar generation or baby boomers (who had even more salient examples of top-down controlled economies than we the short-attentioned do).

      1. You’re right and I know it. I have to remind myself of these facts all the time. It gets difficult sometimes but I appreciate your post, it calmed me down.

        It helps that I’m also in my safe space now (also called “home”). Haha

  5. FML fam wish I had #nochill about this and could just netflix and chill with some basic bitch fuckboi, what’s a sapiosexual to do when everyone is feelin the Bern? Not on fleek. Damn Daniel

  6. Get a really sympathetic test case to overrule the Slaughterhouse decision and establish a right to earn an honest living, subject only to legitimate regulations of public safety, health and morals.

  7. Aw, you’re breakin’ my heart.

    What we have here is the precious rare example of people getting EXACTLY what they want, good and hard.

    You want the “benevolent” hand of Leviathan everywhere, keeping the depredations of wicked corperashuns away? Here it is, but it also keeps prosperity away. Don’t you *dare* say you weren’t warned.

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