Occupational licensing is one of the Leviathan State's biggest scams. Heck, in Mississippi you need a license to be a hair braider. Louisiana licenses florists. And this one takes the cake: Maryland licenses fortune tellers. (See this Reason Foundation report by Adam B. Summers.)
Occupational licenses are often sold as instruments of consumer protection, but their real effect is to strangle entrepreneurship through regulation. When Joe is done making his case against higher taxes, maybe he should make a case against occupational licensing. |The Fever Swamp|
Which to me once again raises the issue of whether or not it really serves the public interest to have so many occupational licensing rules. Like most people, if I needed to hire a plumber, I’d probably look for a recommendation. I don’t have any real confidence that these licensing schemes are tracking quality in any meaningful way, just preventing a certain number of people from earning a living and raising the general cost of plumbing services for everyone else. |Yglesias|
Point the first: It is true enough that one thing licensing schemes do is impose a tax on economic activity. Those of us who do not wish to drown the state in our bathtub are, on general principles, okay with this. Everybody else can take a hike for all I care.
Which still leaves open the question of whether this particular sort of tax is so pernicious that it must be abandoned. In light of the apparent abundance of plumbers and hair braiders, I see no reason to think that the licensing schemes in place now tend to "strangle entrepreneurship."
Point the second: At least in the case of plumbers, the licensing scheme may well be an artifact of labor organizing. Plumbing is similar to trades like bricklaying, carpentry, and electrical work in that it is both a learned skill requiring considerable expertise and a skill which is commonly assumed to be well within reach of most people.
First corollary to point the second: Contra Yglesias, licensing is likely to do something to control quality. It will, at the very least, ensure that a minimum standard is met. Also, insofar as licensing serves as a barrier to entry, it will tend to mean that if you call a plumber at random, that plumber is likely to be experienced at plumbing (where I live, for example, there is a five year apprenticeship).
Second corollary to point the second: While limiting the supply of plumbers increases the cost of plumbing work for consumers, it also increases the wage for plumbers. In my county (which has a high cost of living), the prevailing wage for a plumber is $51.42. Pretty good if you can get your forty, but not so expensive that people forgo plumbing or that economic growth has ground to a halt in face of the prohibative cost of pipes.