Sunday, September 21, 2014

License to Work

The Institute for Justice has a new study out comparing the onerous regulations each state puts on entry to various occupations. In the past, they've focused on occupations that are pretty clearly not safety related, so people would see that the goal is fire-walling existing jobs rather than protecting the public. This study focusses on occupations that are favorable to low and medium income people—that is, on entry-level jobs. They've won several cases on occupational freedom for flower arrangers, interior decorators, and tour guides as a few examples.
The tremendous variation between states in how much training, and in the exams required makes it clear that there's no consensus on curriculum and no common core of knowledge across states. By the way, California come out as having the second most onerous licensing regime. People who care about making it easier for low income people to get started should find it easy to oppose California's extensive regulations on everything from landscapers to makeup artists.
Another point that I think IJ ought to make more explicitly is that the public should distrust arguments based on the jobs that would be protected. I think it's commonly the case that entrenched interests easily get popular support by talking about their members who will lose their jobs if some new approach is allowed. IJ's ads should remind us that whenever entrenched interests are able to erect barriers to entry, it means higher prices and less innovation. This applies to restaurants fighting food trucks, teachers fighting charter schools, and taxi cartels fighting new transportation models (Uber and self-driving cars). In each case, we can easily see the incumbents who might lose their jobs, but locking in the existing model means less innovation, and fewer chances to discover more effective ways of teaching, more efficient uses of our roads and ways to reduce the number of cars required, and a larger variety of food and more convenient places to eat.