Occupational Licensing

Arizona Governor Wants To Put the Public in Charge of Licensing Boards

Right now, most licensing boards require that the majority of members be from the same licensed profession. It's not difficult to see how that leads to anti-competitive rules.

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If the rules don't make sense, often it helps to look at who is writing them.

Take occupational licensing, for example. It's no longer a secret that licensing laws restrict access to certain professions by setting arbitrary barriers that limit who can practice certain professions within certain states. This, in turn, drives up the prices that licensed professionals can charge for their services, drags down overall economic growth, and harms individuals' right to pursue careers of their own choosing. But those negative consequences aren't sufficient to prevent states from enacting licensing laws—even in situations where there is obviously no public health or safety rationale for limiting who can practice a certain profession.

That doesn't make much sense until you look at who is writing the rules. According to a study by Rebecca Allensworth, a professor at Vanderbilt University, 85 percent of America's 1,790 occupational licensing boards are required by state statute to be comprised of a majority of currently licensed professionals in the same field. No wonder they often pass rules to restrict competition.

That's why an idea floated Monday by Arizona Gov. Doug Ducey could be a real game-changer. During his annual "state of the state" address, Ducey called on the legislature to pass a bill putting more members of the general public on licensing boards.

"We've sought to chip away at the deep-rooted cronyism. But there's still too many insiders and industry good ol' boys," he said.

The bill Ducey is promoting is sponsored by state Sen. Michelle Ugenti-Rita (R–Scottsdale), who also led the effort to abolish Arizona's insane licensing law requiring 1,000 hours of training before a salon worker could use a blow-dryer. That rule was promulgated by the state's Board of Cosmetology, which is currently comprised of seven members—five of whom are actively practicing cosmetologists or representatives of cosmetology schools.

Under Ugenti-Rita's proposal, many of Arizona's licensing boards would have to have a majority of public members, rather than professionals working in the same field they are regulating.

Ducey says that change would put "real people—unbiased people—on these boards."

"Making boards more accountable to the public can help reduce the likelihood of regulatory capture," says Shoshana Weissmann, a fellow with the R Street Institute, which advocates for licensing reform. "Arizona has been leading the way on occupational licensing reform, and these are more steps in the right direction."

This isn't just common sense; it's also legally prudent.

In a key 2015 case that could change the course of occupational licensing for good, the U.S. Supreme Court overturned a North Carolina Board of Dental Examiners licensing law that effectively banned unlicensed technicians from offering teeth-whitening services. In doing so, the Court made clear that licensing boards controlled by a majority of "active market participants" could not make deliberately anti-competitive rules, unless those boards were "actively supervised" by some other element of state government.

Some states have responded to that ruling by tightening legislative oversight of licensing boards' rule-making authority. That's good. What Ducey and Ugenti-Rita are proposing is a different way of achieving that same result—a result that makes the boards less likely to impose anti-competitive rules in the first place, and one that will save states from potential costly antitrust lawsuits.

Of course, licensing boards will only as good as the people serving on them.

"We have seen that having the right public members—those who are educated about and dedicated to fighting the kinds of regulatory overreach that we have seen—can make the regulatory climate better," says Paul Avelar, an Arizona-based attorney with the Institute for Justice, a libertarian law firm. "But that requires a constant supply of good public members and future governors willing to take the time to find and appoint them."

The better course of action, Avelar says, is for states to limit the authority of licensing boards from the outset. "The only licensing regulations that can't be abused are the ones that do not exist," he tells Reason.

Indeed, the Federal Trade Commission—which launched the antitrust lawsuit that led to that key 2015 Supreme Court ruling—has said that the only surefire way for a state to avoid running into legal trouble over anti-competitive licensing laws is to have boards serve "an advisory capacity" only, or to be fully staffed by individuals with no financial stake in the rules they make.

State legislatures have increasingly outsourced professional regulation to licensing boards under the theory that professionals working in a given field are likely to have more expertise about what rules might be needed. In exchange for expertise, states have created the potential for self-dealing.

Including more members of the public in the process makes licensing more transparent and might prevent obviously anti-competitive rules from being written. Abolishing licensing boards is always going to be a better solution, but Ducey and Ugenti-Rita are pushing in the right direction.

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  1. Here’s an idea. Get rid of the licensing boards entirely!

    1. Yes, the true “better course of action” is to abolish occupational licensing altogether. Of course, they will always point to plumbers and electricians as justifying some occupational licensing, reframing the question as “why do you hate children so much that you will let unlicensed barbers cut children’s hair?” and thne we’re back to where we are now.

      1. How about *meta* licensing boards? “After our lengthy consideration and possible approval, you will need 10,000 hours of paid training to begin your board establishment process.”

        1. Excellent idea! Way to think on top of the box!

    2. unreason doesnt actually want to shrink government rules, just put them in the hands of the same people that wanted Hillary as President.

      End professional licensing by government.

    3. Upvote. Anything less is just mumbling.

    4. I agree. Or possibly, have “optional” licensing or certification. If I choose to use Ray the Handyman for $20 an hour instead of Joe the Licensed Plumber for $90 an hour, that should be up to me.

    5. The article said that. It also said that this type of reform would be good, albeit not as good; but I bet reform is more easily achievable than abolition, so why not go for it?

  2. Not sure this is a good idea.
    In SF, ‘the public’ is invited to vet nearly all new construction; the delays can be horrendous and costly.

    1. Yeah I am not sold on this idea. Most likely these positions will be handed out to some friend of a politician looking for a quick buck who just defers to the experts on the board and not much changes. Maybe it stops some of the worst requirements but not holding out hope.

      I could see SF not authorizing a license to a white contractor because there aren’t enough licensed contractors of color and other such bs that doesn’t even remotely touch the health and safety requirements.

      1. Aren’t the worst requirements both the most important and most likely to be stopped by this reform?

    2. thatis a fish out of a different kettle. The “public” in SF are trying to selfishly preserve their neighbourhood the way it is, thus ANY development is seen as “messing in my backyard”.

      It would be a different matter of those local “members of the public” were given the responsibility of determing how those places were built.. that is, to what standards of construction, a genuine safety issue perhaps. Don’t want a four story up and down new house blowing over onto the squatters shack next door in a 30 MPH wind, now, do we? But THOSE standards are not made to keep construction trades a reserved inside good ol boys’ club for the chozen few players.

      It would be the equivalent of the local hair cops having the authority to walk into a hair salon and tell the stylist what sort of “do” THIS customer gets, because SHE lives in THAT ‘hood. Nothing to do with the ability of the stylist to do her job well and safely.

      Most girls by the time they’re out of high school know now to do each other’s hair, having done so for years. Not to mention having done their little sisters’ hair for even more years before their friends would trust them to do THEIRS.
      And how many of those kids ever cut off someone’s head, or infected someone’s ehad with an incurable cancer, or spread scabies, lice, or whatever, that would not have spread scabies or lice evenwithout doing the other girl’s hair?
      A thousand hours of school to aim a blow dryer at someone else’s head when the prospective student has been aiming one at her own head for at least ten years? Nah, that’s a insiders’ good ol boy protectionist jag.

      I recetnly learned that in my state it now takes eighty hours of provessional truck driving school to get a Class A license.. big semi rig. Hah, I bought a truck tractor years ago, stuck the key in the hole and learned how to drive it all by myself. STILL haven’t had any accidents except for two guys and a deer running into MY as I was doing what I was supposed to be doing. Score me, 3, them o.5 (one of the attackers was able to drive his away. not so the other two.. The deer stayed there to feed the coyotes, the other car had to get tow truck and haul it off to the knackerman. EIGHT thOUSAND DOLLARS of school to do what I learned myself in a few hours?

      The moneymakers are the clowns running the professional driving schools, and hornswoggling governments to mandate their product as a prior restraint on anyone driving

  3. Of course, licensing boards will only as good as the people serving on them.

    So they will remain petty bureaucratic authoritarian nightmares.

    1. Well said — And to all the other posters who question the dismissal of government induced standards….

      I invite them to explore the MILLIONS of private corporation standards in technology that even this website relies on to ‘function’ well. POP, HTML5, ISO, etc.. etc.. etc..

      The most prosperous standards are NEVER created by bureaucrats.

  4. The problem with any such board is that the experts on a profession are the people on the profession who bring with them their own interests consciously or unconsciously. People outside the industry do not have the knowledge to make informed judgements and will defer to the experts and defeat the purpose of their being on the board or push ignorant policies. There is no sure way to avoid these problems with trusting the propriety of the body’s decisions.

    1. You seem to like to pretend that “ignorant policies” is exempt for “professionals”.. Maybe you should be asking who has titled them “professionals” to begin with and just how worth-while is that so called “professionalism”…

      I had a “professional” plumber talk me into a 2% grade sewage pipe because “supposedly” its the “standard” that works best and yet my toilet won’t stop plugging whereas before at a steeper grade it worked great.

      “Professional” doesn’t exclude stupidity.

      1. I got NO tickets in my pocket, bit I know that poop needs a fall of a quarter inch drop per foot of travel to work. Less, it does not get pushed along to its final resting place More, the water flows by too quickly and does not carry the poop with it.

        Aiin’t I smart? )Nah, just done a few of em…….. designed and installed my own septic system borrowed my neighbour’s backhoe, and put it in. That was 25 years ago it still works perfectly and most of the “designed systems” in the area have had to be repaired or replaced at least once, some twice, since I redid mine. WHen the county asked for “as built” drawings as part of an accessory building permit process, I simply handed them the design I built. No questions asked nor answered. And now, NO ONE can put in their own, even if professionally engineered with plans given. I guess a guy who can build his own house per the design is too stupid to tell poop where to go and how to get there. Good grief, its just pipes and slopes. GEt real… good ol boys gotta perteck they selfs…… its ALL about the Benjamins.

        1. ^That’s the Exact Example I’m referring too — Now the question is; Have you seen this theory to be true or are you just quoting the “professional” standards???? Doesn’t anyone stop to think anymore that, “Hey, maybe somethings what the professionals “believe” isn’t as true as they think they are.”

          What about vertical piping??? If “the water flows by too quickly and does not carry the poop with it” how’s that theory hold up??? Vertical pipes should be plugged all the time.!!!!!!!!

          I’ve used the same toilet in both houses and the “suggested” design has a bit to be desired over the old stepper grade design.

      2. Assuming your home’s sewer consists of the minimum 4″ main drainage pipe, 2 degree slope should be sufficient. It could be an issue with your water saving low flow toilet or at least that’s what Trump would say your problem is.

  5. giving unearned power to a different pile of people doesn’t seem to solve much

  6. If we don’t license florists, you could end up with arrangements that are a mix of orange and purple! Do you want that?

    ORANGE AND PURPLE!!!!!!!!

    1. That is indeed a nightmarish possibility!

      1. That’s in the platform.

    2. don’t like orange and purple? DON”T BUY IT.

  7. why have licensing at all? Get rid of it.

  8. Excellent read, I just passed this onto a colleague who was doing some research on that. click here

  9. Good article, and relevant on more than one score. The original LP plank protecting women from Dixiecrat Comstock laws has been subaqueated. True, the waterlogged platform calls for ending professional licensing, but the birth control plank–to the delight of race-suicide girl-bulliers–acts as though there were no medical cartel using licensing to create an extortion racket nobody can afford. Another example… federal district courts currently pay interpreters more if they belong to AIIC, a European price-fixing lobby with no testing for earned credentials, which has in the past been investigated for antitrust violations. This hampers due process.

  10. “But who will protect the public?”
    -Democrats

    Greg Stanton is probably having an aneurysm.

  11. See also the federal medical college cartel, Liaison Committee for Medical Education (LCME), made up of the American Med. Assoc. and the American medical colleges assoc.

    Their onerous medical pedagogy requirements have been successful at making the USA and Canada have some of the lowest doctors per capita rates of the modern west.

    The FTC bureau of competition tried to bust it up in the 70’s but was beat off by the powerful AMA lobby. This would be a great Trump corrective action. It is not even a statutory mandate, it is based in U.S. Dept. of Ed. policy. He could change it with the stroke of a pen. SHARE!

    1. It also means that every graduate of a US medical school will find a residency slot. Positions not filled will then go to foreign grads who meet the requirements. US medical schools have very high standards in comparison to most other places.

      There are a lot of misconceptions out there. The goal of a medical school is to graduate every student. There is some competition for top scores although some do not even have grades. A graduate has knowledge but is in no way ready to practice unsupervised. That happens during residency. The real control is not state licenses it is with the specialty boards. You could practice without a board certification but nobody will hire you and hospitals will not grant privileges without them.
      Standards even the playing field. At the end of the day where you went or your class rank do not matter much.

      1. Great insight. Thank you and I agree. You confirm what my physician friends have told me. I still see this accreditation process as the first supply bottleneck, although there are many more down the road to finding work as an MD.

      2. I envision a liberalized medical employment space where one can pay up front or get into major debt up front for faster study, as the current MD system works, or one could work their way through the medical profession, passing one higher-tier board after the other while gaining precious and valuable experience along the way.

        LPN > RN > NP > PA > MD > Specialist

        Any reason why not?

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