The Licensing Logjam: The Scam to Limit The Supply in Many Industries

National Affairs reports on the rent-seeking society :

Licensing has long been a common feature of American economic life, particularly following the Supreme Court's 1889 decision in Dent v. West Virginia, which upheld West Virginia's medical-licensing system. That ruling ushered in an era of follow-up decisions that preserved licensing regimes for a wide array of trades and occupations around the country. Today, such requirements are ubiquitous.

Groups like the Institute for Justice have even developed a cottage industry of sorts out of exposing credulity-straining licensing rules, such as Texas's requirement that eyebrow threaders complete 750 hours of training at a cost of up to $9,000, or Savannah, Georgia's 100-question multiple-choice exam for city tour guides. Many of these requirements have little or no connection to safety or public health; according to IJ, the average cosmetologist spends 386 days in training before earning a license, compared to just 34 days for emergency medical technicians. And in recent years, the harmful effects of such practices have become more apparent.

In November 2017, IJ released an update to its landmark "License to Work" report, which chronicled licensing requirements in each of the 50 states for 102 low- and moderate-income jobs. The study found that, nationwide, the average licensing applicant is required to complete nearly a year of training, pass at least one exam, and pay over $260 in fees before joining an occupation or trade. The report also found that about one in four U.S. workers must obtain government permission to pursue a chosen career — even for such occupations as florist or animal massager. As a 2016 report from the Brookings Institution noted, "[R]estrictions from occupational licensing can result in up to 2.85 million fewer jobs nationwide, with an annual cost to consumers of $203 billion."

These requirements pose significant and seemingly pointless barriers to entry, particularly for low-income individuals who may not have the resources to spend, say, $8,000 to attend cosmetology school. Further, even those who do obtain the necessary licensure in one state are often barred from practicing their trade in other states without undergoing further training at additional cost. Beyond limiting upward mobility, licensing thus limits geographic mobility — historically a key component of economic success in the U.S.

This article is well worth your time.