Job Licensing Requirements Need Serious Scrutiny
Should you really need a license to teach hair braiding?
I’d earned a master’s degree in social work and had no idea what auditing was when I showed up in Nashville in 1978 to work for the Tennessee state auditor. Tennessee, like many other states, had enacted a sunset law mandating legislative review of every agency, board and commission to determine whether they should be abolished, restructured or continued. The auditor was required to do performance audits for each of them and needed to add staff with social science training.
My experience in Tennessee left me with a view of sunset laws less cynical than that of many people in public administration. While major agencies are almost certainly never going to be terminated under a sunset law, the audits and the legislative review process can bring significant benefits. A November 2017 audit of the Tennessee Corrections Department, for example, found major problems in its management of a private prison contractor.
But the cynics are correct that these laws have largely not resulted in reductions in state regulations or abolition of unnecessary programs. One form of regulation in particular, occupational licensing, has been spreading like kudzu. The Brookings Institution reported recently that it now covers around 30 percent of the U.S. workforce, up from 5 percent in the 1950s.
The licensure requirements often seem ridiculous. A few years ago, it was reported that Texas required 2,250 hours of training to be licensed to teach hair braiding. The libertarian Reason Foundation reported on a Tennessee barber -- ineligible for a license because he didn’t have a high school diploma -- who was hit with $2,100 in fines and fees when he was caught using a fake license. Across all states, according to the Brookings report, “interior designers, barbers, cosmetologists and manicurists all face greater average licensing requirements than do EMTs.”
Advocates of these requirements cite a need to protect consumers. But according to a recent study by George Mason University’s Mercatus Center, “a broad and growing consensus among economists suggests that these rules primarily serve to protect incumbent providers from competition at the cost of higher consumer prices and excessive barriers for new entrants in the field.”
It seems to me that these requirements are stifling job growth, especially among marginalized people who can’t afford to go unpaid as they undergo the required training. Clearly there are alternative, less onerous methods -- voluntary certification, for example. For that matter, should you really need a license to teach hair braiding?
State legislators and policymakers who want to do a better job of balancing consumer protection and employment opportunities might want to look to Colorado. The state that passed the nation’s first sunset law now also has a “sunrise” process that requires reviews of requests for licensure. Last year, its Department of Regulatory Agencies did 22 reviews, and it recommended against requiring licensure in two cases and for doing away with it in another. Maybe it’s time give the idea of sunsetting another look.