Worried about Income Inequality? Get Government Out of the Way.

 

bureaucracyRent-seeking comes in many shapes and forms. From “Make elites compete: Why the 1% earn so much and what to do about it” by Jonathan Rothwell at Brookings:

For lawyers, doctors, and dentists— three of the most over-represented occupations in the top 1%—state-level lobbying from professional associations has blocked efforts to expand the supply of qualified workers who could do many of the “professional” job tasks for less pay. Here are three illustrations:

— The most common legal functions—including document preparation—could be performed by licensed legal technicians rather than lawyers, as the Washington State Supreme Court decided in 2012. These workers could perform most lawyer-like tasks for roughly half the cost. Unsurprisingly, legal groups opposed it. A few brave souls from the Washington State Bar Association board resigned in protest, and issued this statement:  “The Washington State Bar Association has a long record of opposing efforts that threaten to undermine its monopoly on the delivery of legal services.” Proportion of lawyers in the top 1%? 15%.

— Many states allow nurse practitioners to independently provide general and family medical services, freeing up physicians to provide more specialized services. But most larger states do not. Again, typical nurse practitioner salaries are roughly half those of general practitioners with an MD. But, of course, physician lobbies stridently oppose the idea. Proportion of physicians and surgeons in the top 1%? 31%.

— Dental hygienists can perform many of the functions of more far expensive dentists, but regulations vary by state and in all but a few states, it is not possible for hygienists to own and operate their own practice. My analysis shows that just 2% of hygienists are self-employed compared to 63% of dentists. Proportion of dentists in the top 1%? 21%.

Recently, the head of the Federal Trade Commission testified before the U.S. Senate on how state occupational licenses, such as these, often hinder competition and harm consumers, though her agency has very little authority to intervene.

And, of course, cheaper services boost real incomes for everyone else.

Published in Economics
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  1. RyanM Member
    RyanM
    @RyanM

    Hah!  If only everyone in the WSBA could resign in protest, we might be getting somewhere.

    Hardly a member of the 1%, I get to pay upwards of $600 a year for the privilege of being in the WSBA and, among other things, a paid “diversity expert” on staff in Seattle.  And yes, those members of the board very much are of the 1%, and stereotypically so, as they are completely disconnected from the reality that they so vigorously regulate.

    • #1
  2. Richard Fulmer Inactive
    Richard Fulmer
    @RichardFulmer

    Instead, let’s create even more guilds so that we can all become members of the 1%.

    • #2
  3. Penfold Member
    Penfold
    @Penfold

    Don’t these lesser paid individuals also wish they were receiving the salaries of their professional counterparts?  Or are they happy to be doing the same work for so much less?

    • #3
  4. Israel P. Inactive
    Israel P.
    @IsraelP

    Penfold:Don’t these lesser paid individuals also wish they were receiving the salaries of their professional counterparts? Or are they happy to be doing the same work for so much less?

    I hear it now. “We are doing doctors’ work. Why aren’t we getting doctors’ pay. [wait for it] WAR ON WOMEN!”

    • #4
  5. Ross C Member
    Ross C
    @RossC

    More often than not, when government intervenes it is to protect the 1% who are of course trying to fleece the rest of us.

    I think the most egregious example is the description of Optician.

    Opticians are technicians trained to design, verify and fit eyeglass lenses and frames, contact lenses, and other devices to correct eyesight. They use prescriptions supplied by ophthalmologists or optometrists, but do not test vision or write prescriptions for visual correction. Opticians are not permitted to diagnose or treat eye diseases.

    And why are opticians forbidden to test vision, write prescriptions etc.  I suspect it does not have much to do with outcomes.

    • #5
  6. TeamAmerica Member
    TeamAmerica
    @TeamAmerica

    RyanM:Hah! If only everyone in the WSBA could resign in protest, we might be getting somewhere.

    Hardly a member of the 1%, I get to pay upwards of $600 a year for the privilege of being in the WSBA and, among other things, a paid “diversity expert” on staff in Seattle. And yes, those members of the board very much are of the 1%, and stereotypically so, as they are completely disconnected from the reality that they so vigorously regulate.

    You’re part of a bicycling lobby? http://www.wsbaracing.org/ :-)

    • #6
  7. Locke On Member
    Locke On
    @LockeOn

    I am not usually a Brookings fan, but they nailed it this time.

    • #7
  8. Richard Fulmer Inactive
    Richard Fulmer
    @RichardFulmer

    Penfold:Don’t these lesser paid individuals also wish they were receiving the salaries of their professional counterparts? Or are they happy to be doing the same work for so much less?

    Everyone wants to earn as much as they can, but they’re constrained by their competitors.  That’s why doctors, lawyers, dentists, and labor unions work to reduce the number of competitors in their respective fields.  Just another form of crony capitalism (or “crony socialism” if you prefer).

    • #8
  9. Doctor Robert Member
    Doctor Robert
    @DoctorRobert

    I don’t know much about lawyers, but I have had a lot of dental issues lately and I don’t see how any hygeinist could assess, diagnose, treat, or prognosticate about my broken fillings, my split molar, the two teeth with a gap that keeps catching bits of lamb.

    As for physicians, I write from the OR lounge of a mid-sized private hospital in a small, run-down New England city, where I am beginning my eleventh hour of performing surgery today.  I work ten to twelve hour days in the office, assessing, diagnosing, treating, or prognosticating about my patients’ illnesses.

    Sorry, there’s no PA who can do what I do.

    According to Huffington Post, the top 1% in my state is above $532,000.  That’s about four times my income.

    So spare me your whining about Docs and Dentists being paid too much for doing PA or Hygeinists’ work.  The next time you have a dental abscess or a kidney stone, call Jonathan Rothwell for help.

    • #9
  10. Larry3435 Member
    Larry3435
    @Larry3435

    James Pethokoukis: The most common legal functions—including document preparation—could be performed by licensed legal technicians rather than lawyers…

    Actually, document preparation could often be performed by a baboon.  In fact, I am currently in the process of selling a house, and I am reasonably sure that the truckloads of documents involved in that process were prepared by a baboon.  Well, a lot of them were obviously prepared by government bureaucrats, which is pretty much the same thing.

    • #10
  11. RyanM Member
    RyanM
    @RyanM

    Penfold:Don’t these lesser paid individuals also wish they were receiving the salaries of their professional counterparts? Or are they happy to be doing the same work for so much less?

    Well, it’s not the same work.  Granted, there are a lot of attorneys who do work that other non-attorneys could easily do, but there would arise a natural stratification where attorneys do different work for more money.  There is still quite a lot of work where the experience and training are big factors.  Just as there is still a big difference between a specialist doctor and a PA or a NP.

    • #11
  12. RyanM Member
    RyanM
    @RyanM

    TeamAmerica:

    RyanM:Hah! If only everyone in the WSBA could resign in protest, we might be getting somewhere.

    Hardly a member of the 1%, I get to pay upwards of $600 a year for the privilege of being in the WSBA and, among other things, a paid “diversity expert” on staff in Seattle. And yes, those members of the board very much are of the 1%, and stereotypically so, as they are completely disconnected from the reality that they so vigorously regulate.

    You’re part of a bicycling lobby? http://www.wsbaracing.org/ :-)

    Hah!  Don’t get me started on cyclists!

    • #12
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