Occupational Licensing

Stossel: Stop! You Need a License To Do that Job!

"Bottleneckers" use occupational licensing to screw competitors and innovation in the name of keeping us safe.


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Whether you're a doctor, an electrician, a teacher, a cab driver, a hair stylist—even a tour guide!—the government increasingly demands that you get a license before you are allowed to work in your chosen profession. In the 1950s, only about one in 20 workers needed the government's blessing to do their jobs. Today, that figure is more than one in three.

Because of safety issues and concerns about accountability, many people think occupational licensing is a good idea. Yet licensing doesn't prevent fraud and incompetence (in some cases, it even provides protection from such claims). And all over America, people want to work but can't because it's often nearly impossible or too expensive to get the proper government permission.

In their book Bottleneckers: Gaming the Government for Power and Private Profit, the Institute for Justice's William "Chip" Mellor and Dick Carpenter document how established companies use government regulation, especially occupational licensing, to block newcomers and innovation. A "bottlenecker," they write, is "anyone who uses government power to limit competition and thereby reap monopoly profits and other benefits."

In the first of a video series, John Stossel introduces the concept of bottleneckers and shows how they hurt the economy in the name of keeping us safe.

Produced by Naomi Brockwell. Edited by Joshua Swain.

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