A license for failure

Union County Pulse

There is a line in You’ve Got Mail that goes, “People are always telling you that change is a good thing, but what they’re really saying is that something that you didn’t want to happen just happened.” And for some inspiring or established Union County business owners “something that you didn’t want to happen just happened”, or will happen.

That’s because there continues to be an effort by politicians across the state and surprisingly many in the business community, to license professions in the name of consumer protection and public safety. But is their something else behind licensing some politicians and some in the business community don’t want you to know?

Before this question is answered, lets answer the question “what is a license?” Licenses simply give governmental permission for people to practice a profession of their choice.

When one thinks of licensing or licensing boards, perhaps lawyers or doctors come to mind, but licensing extends to other professions such selling flowers, interior designers, selling caskets, and even fortune telling.

Reason Foundation ranks North Carolina a dismal 13th, (snuggled up near Massachusetts), with the highest number of licensed required job occupations at 107 job categories. South Carolina ranks 47th.with just 60-occupations requiring licensing. According to the U.S. Small Business Administration, one of the hardest hit due to these licensing regulations are small businesses which provide up to 80 percent of new jobs each year.

Business interests realize they could lobby politicians to use governmental regulations to limit competition. Many politicians, (some with good intentions), want to portray themselves as tough on consumer protections who license a profession to the detriment of those who want to enter that profession. These same business interests lobby to have themselves exempt from any new regulations, thus limiting competition.

Licensing boards, which are created to oversee the profession and protect the consumer, are substantially flawed. Politicians, who often don’t know anything about the professions they are licensing, appoint board members who work in that profession creating a gross conflict of interest. The results are boards who potentially protect their own, leaving the public with a false sense of security.

The poor, whom politicians’ say they’re advocates for, suffer the most from these egregious regulations. The very regulations that politicians put into place for “consumer protection”, carry burdensome and costly licensing requirements, often stopping those in pursuing a profession of their choice. Jobs that would help the poor including entry-level positions that require little education, or home businesses that require little start up costs, are regulated away.

Consider the battle between African style hairbraiders and licensed cosmetologists. In July, state law required hairbraiders to be licensed due to numerous complaints, not from the public, but from cosmetologists. Licensed cosmetologists generally don’t provide hairbraiding, but African style hairbraiders have made successful businesses doing it. Threatened by competition, cosmetologists complained hairbraiders where misusing chemicals even though it’s not in their practice to use any, and successfully lobbied politicians to license them. New comers who want to learn hairbraiding, who lack a formal education, and who are poor, can’t afford to spend thousands of dollars and hundreds of hours in cosmetology school.

Consumers always pay a high price for burdensome regulations, always-limiting competition, product choices, and services. One example lies in the potential licensing of automotive repair technicians. By doing so in the name of “consumer protection”, will reduce the number of entry level repair technicians due burdensome license requirements. Not only would there be fewer technicians making the cost of repairing a vehicle more expensive, it wouldn’t guarantee better service or repair quality.

You might ask, “what about consumer protection? How do we protect the public from unscrupulous business practices?” Licensing boards need to be held accountable to the pubic. A special commission can review board activity for disciplinary actions against licensees. If no actions are occurring, then licensing isn’t necessary. A law that would have licensing boards justify their existence periodically to the state legislature, would strengthen accountability. If the legislature finds a licensing board unnecessary, they would eliminate license requirements for that profession.

So blacks wouldn’t compete with whites during the 1950’s and 60’s, Jim Crow laws limited business opportunity for blacks by using licensing. The same tactics of reducing competition were used during Apartheid in South Africa, and still are being used on all Americans today. It’s shameful these business tactics still exist, but it can be changed by being aware it, and pushing legislators to enact reforms. Always, the freedom to make a living will always lead to prosperity.

Danny Figueroa


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One Response

  1. From mises.org :
    “The issue is always the same: the government or the market. There is no third solution.”
    - Ludwig von Mises, Planned Chaos

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