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Rent-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