Virginia Should Take Its Boot Off These Blue-Collar Necks
Occupational licensing makes it more difficult to work.
Earlier this year you might have heard the name Juan Carlos Montesdeoca mentioned. For a short while he was History's Greatest Monster—at least in the eyes of the state of Arizona.
His crime? He offered free haircuts to the homeless. This prompted an anonymous complaint to the state's cosmetology board, which investigated Montesdeoca for barbering without a license. Fortunately, Republican Arizona Gov. Doug Ducey interceded on Montesdeoca's behalf. Then Ducey launched a fine-grained review of the state's occupational licensing laws.
Democrat Ralph Northam, Virginia's next governor, should do the same. Because while Arizona imposes some awful restrictions, Virginia follows closely behind. A recent report by the Arlington-based Institute for Justice ranks Arizona as the fourth worst offender in the nation "when it comes to licensing burdens for lower-income occupations." Virginia comes in at seventh worst.
Five years ago, in its first report on the subject, IJ ranked Virginia eighth worst. Relatively speaking, the commonwealth is moving backward, not forward.
Of the 102 occupations IJ studied, Virginia licenses 68. That's up from 46 a few years ago. And the state not only has erected more hurdles, it has raised their height as well.
Since IJ's last report, average licensing fees have climbed from $153 to $291, and the amount of time an applicant must put in before earning a license has risen from 462 days to 620.
Moreover: "Virginia licenses a number of occupations that most other states do not license, including animal control officers (licensed by six other states), upholsterers (nine others), locksmiths (13 others), commercial floor sander contractors (21 others) and commercial painting contractors (21 others)."
In the abstract, licensing is supposed to protect consumers from threats to their health and safety, or from getting ripped off by someone who doesn't know what he's doing.
But that theoretical rationale does not explain why Virginia requires only nine credit hours of education for emergency medical technicians, but two years of experience to become a landscape contractor. Virginia demands that auctioneers receive 80 hours of instruction. School bus drivers? Twenty-four. You can install mobile homes in Virginia with only eight hours of instruction—but it takes 500 to be a massage therapist.
This suggests an altogether different impetus for much of this regulation: the desire by people performing an occupation to reduce the amount of competition they face from new entrants. After all, it's not like Virginia lawmakers were motivated to license upholsterers by a Pulitzer-winning, seven-part newspaper series exposing the seamy underbelly (sorry) of the state's deadly upholstering industry.
To be fair, legislators have scaled back occupational licensing in at least one prominent instance. Virginia used to require people who braid hair for money to obtain a full cosmetology license, which requires 1,500 hours of instruction, but stopped requiring such credentials in mid-2012.
Yet the state still forces too many people to jump through too many costly hoops just to earn a living. This ought to disturb conservatives and liberals alike: conservatives because of the assault on free-market principles, and liberals because of the assault on egalitarian ones.
The former assault is obvious. The latter is demonstrated easily.
Using government red tape to keep competitors out of a market means more money for the incumbents. (Doctors, for instance, make far more money than advanced-practice nurses do even though nurses can perform many of the same tasks just as well, if not better. But nurses are widely prohibited from performing such tasks except under a doctor's supervision.)
What's more, the Brookings Institution has compiled data illustrating "Four Ways Occupational Licensing Damages Social Mobility."
Partly because of the crazy-quilt patchwork of state occupational rules, persons "working in licensed professions are much less likely to move, especially across state lines," Brookings reports. An out-of-work paving contractor in Appalachia can't easily move to another part of the country if he has to go through a costly and expensive licensing routine all over again.
Brookings also notes that ex-convicts frequently face a lifetime ban on getting a job license. That's not just dumb—shouldn't ex-cons be encouraged to find honest work?—it also perpetuates racial inequality. Since blacks make up a disproportionate share of the prison population, licensing regimes present a disproportionate barrier to black economic mobility.
Licensing costs money—a bigger obstacle for the poor. And finally, it amounts to "opportunity hoarding": When demand for a service rises, the available supply cannot easily rise to meet it. That means more business for the haves and less for the have-nots—a direct result of government policy.
Half a century ago, only one job out of 20 required a government permission slip. Now the ratio is nearly one in four. If Virginia wants to improve its economic performance and help those on the lower half of the income ladder, it could start by dialing that ratio back a few notches.
This column originally appeared in the Richmond Times-Dispatch.