by James W. Harris
The Great Libertarian Idea in President Obama's 2015 Budget
Surprise! There's at least one great â€” and solidly libertarian â€” idea in President Barack
Obama's 2015 budget: cutting back the plague of occupational licensing.
In an item entitled "Reducing Unnecessary Occupational Licensing Requirements" Obama announces plans to "reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do," noting that occupational licensing is "putting in place unnecessary training and high fees" in many fields.
President Obama proposes a $15 million in grants to states for "identifying, exploring, and addressing areas where occupational licensing requirements create an unnecessary barrier to labor market entry or labor mobility..."
This is yet another example of a libertarian/free market idea bursting into the mainstream.
Libertarians at the Institute for Justice, the Reason Foundation and elsewhere have long pointed out the harm of occupational licensing requirements.
* Occupational licensing laws â€” found in all 50 states â€” restrict entry
into over 1,100 different occupations.
* They have grown explosively
. In the 1950s, less than five percent of American workers were required to obtain a government license to do their job. But today, that number has passed an incredible 30 percent â€” meaning one in three Americans must obtain permission from the government to pursue their chosen profession.
* The cost of these laws to consumers is astonishing. One 2011 study estimated
that occupational licensing laws increase costs to consumers by a whopping $203 billion per year. As a result, some people are not able to afford some services, including crucial ones like dental care. A 2009 study found
that states allowing dental hygienists to provide routine dental care had fewer adults with missing teeth than those that did not.
* Occupational licensing laws destroy millions of American jobs â€” by one estimate
, a whopping 2.85 million jobs. They make it prohibitively expensive or too difficult for newcomers to enter fields in which they have competency but can't afford costly and unnecessary training and licensing.
* Occupational licensing laws slow or even halt innovation. One recent example is the use of licensing regulations for taxi drivers to halt new, highly competitive app-based services such as Uber.
* Among the occupations in which entry is restricted by licensing laws: interior decorators, hair braiders, foot massagers, animal breeders, bartenders, funeral attendants, upholsterers, shampooers, music therapists, auctioneers, talent agents, and ballroom dance teachers.
Of course, supporters of occupational licensing argue it is needed to protect the public from unscrupulous or incompetent practitioners.
the Institute for Justice: "Research to date â€” on occupations as diverse as school teachers, interior designers, mortgage brokers, dentists, physicians and others â€” provides little evidence that government licenses protect public health and safety or improve the quality of products or services."
Astute Liberator Online readers can probably guess the real reason these laws exist.
"These laws are created under the guise of 'helping' consumers," wrote
Adam B. Summers of the Reason Foundation in a 2007 study. "In reality, the laws are helping existing businesses keep out competition, restricting consumer choice, destroying entrepreneurship, and driving up prices."
Further, many of these occupations are in fields where, in the past, the poor, immigrants and other challenged workers â€” those with the least resources â€” have been able to get a toehold in the economy.
To learn more, check out these resources:
* License to Work: A National Study of Burdens from Occupational Licensing
is the first national study to measure how burdensome occupational licensing laws are for lower-income workers and aspiring entrepreneurs. This 200-page book is free online.
* "Obama has a modest plan to tackle one of the most underrated economic problems in America
" by Timothy B. Lee is an excellent new article in the liberal-leaning online magazine Vox. The accompanying ten index card-style sidebars are full of useful information.
Writing at National Review Online, economist Veronique de Rugy sums up
the problem nicely:
"People who want to work, start businesses and make a living shouldn't have to ask the government for permission to do so. Consumers can take care of themselves, especially with our sharing economy and the easy feedback mechanisms it offers. ...
"Many of the licensed occupations have traditionally provided low-income Americans with a path to self-sufficiency and upward mobility. By erecting barriers to entry to these occupations, we erect barriers to entry to the American dream."
Gov't Regulation to Cost Americans $1.882 Trillion This Year
A new report by the Competitive Enterprise Institute (CEI) estimates that government regulation will cost the American economy a staggering $1.882 trillion in 2015.
This is larger than the entire GDP of all but 11 countries in the entire world â€” including major developed nations like Australia and South Korea.
Further, the regulatory burden is constantly growing. In 2014 alone, 3,541 new regulations hit the books. Complying with regulations will take an estimated 9 billion hours of paperwork. CEI contends such regulation drives up the cost of goods and services, destroys jobs and damages the economy in other ways. They also point out this huge expense is largely out of control â€” unmonitored and unaccountable. Many regulations are inefficient, unnecessary, destructive, and would be far better handled by market mechanisms.
The report, "Free to Prosper: A Pro-Growth Agenda for the 114th Congress
," can be read for free and includes CEI's suggestions for reform.
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Activist Ammunition is written by Liberator Online editor James W. Harris. His articles have appeared in numerous magazines and newspapers, and he has been a Finalist for the Mencken Awards, given by the Free Press Association for "Outstanding Journalism in Support of Liberty."