If You Want To Fight Monopolies, Fight Occupational Licensing
Legislators on a crusade against monopolies should tackle occupational licensing boards before they target Big Tech.
After a cascade of school shutdowns, supply chain issues, and soaring inflation, COVID-19 is still the biggest problem facing Americans. Congress remains at a policy standstill on many of these issues, yet some lawmakers seem focused on America's alleged tech company "monopoly problem" rather than dealing with the pandemic's ill effects. Zeroing in on the sectors of our economy putting out products that improve our lives is a mistake.
Interest in antitrust problems has increased thanks to progress of a misplaced legislative crusade by Rep. David Cicilline (D–R.I.), Rep. Ken Buck (R–Colo.), and Sen. Amy Klobuchar (D–Minn) against America's tech sector—an industry Americans trust more than the U.S. government. If legislators are interested in tackling antitrust in a way that improves the lives of all Americans, they should focus on antagonistic, state-empowered monopolies like occupational licensing boards. Tech companies are regularly facing new competitors, but these quasi-governmental boards that determine how, when, and if someone can work are not.
Roughly one-quarter of Americans face occupational licensing obstacles before they can do their jobs. For some jobs, like doctors, lawyers, and teachers, licensing requirements may serve a valid state interest in promoting health and safety. But for interior designers, florists, and creatives, licensing boards strangle economic opportunity.
In most cases, an individual licensing board controls who can practice a profession in a particular state. The time it takes to get a license is inexcusably long and entirely unrelated to the risks of a profession or the way it impacts the public. Even if an applicant has the proper training, licenses are still denied for convoluted reasons. Decisions like threatening to suspend critical health care workers' licenses due to their unpaid student loans not only harm consumers, but also the businesses that are short-staffed.
The fragmented, state-level control of quasi-governmental occupational licensing boards exacerbates the problem. Working across state lines is nearly impossible because most occupational licenses are location dependent. Online businesses that operate in multiple states jump through significant hoops just to keep themselves afloat. These costly and time-consuming licensing requirements prevent Americans from pursuing careers, opening new businesses, finding worthy job candidates, and affording child care.
Antitrust reformers can help consumers by taking on the "state action doctrine" that shields licensing boards from antitrust enforcement. Though it didn't eliminate the doctrine, in a 2012 case the Supreme Court refused to extend such immunity to North Carolina's dental board since it lacked government supervision and was composed of self-interested market members. Sens. Mike Lee (R–Utah) and Chuck Grassley (R–Iowa) are laying the groundwork to codify and clarify limitations through the Tougher Enforcement Against Monopolies (TEAM) Act, which would compel occupational licensing boards to meet specific requirements to earn immunity from antitrust enforcement.
Occupational licensing boards wouldn't disappear, but they would be subject to the same competitive forces that improve other industries. And they'll still serve legitimate public safety purposes while being prevented from engaging in the anti-competitive activities that overly burden new entrants to many industries.
Antitrust enforcement and competition policy are supposed to focus on protecting consumers from the harms of anti-competitive practices. If antitrust reformers really want to foster competition in a way that will have a significant upside, scrutinizing the monopoly status of licensing boards is more impactful than creating new barriers for innovative businesses.