Recommended by Ricochet Members Created with Sketch. Occupational Licensing Is a Whole Quilt of Crazy

 

Here’s a bit of trivia: New Hampshire’s tallest building was erected by a general contractor unlicensed by the state. Before you decide to avoid forever Manchester’s 20-story City Hall Plaza, you should know no building in the state, including every house, was built by a state-licensed general contractor — because New Hampshire doesn’t license general contractors. I’ll be focusing on New Hampshire here, but the crazy quilt of occupational licenses smothers opportunity in every state.

The state doesn’t license carpenters, auto mechanics, welders or asphalt layers either. Yet your home does not fall apart, commercial buildings don’t tumble down, roads don’t dissolve in the rain.

It turns out that for many occupations that pose significant potential risks to others, the marketplace provides pretty powerful incentives for providers not to kill their customers.

New Hampshire does have a long list of occupations that require a government license: it includes animal breeders, auctioneers, hunting and fishing guides, landscapers, makeup artists, manicurists, midwives, real estate brokers, and the much-feared lightning rod salesman.

In New Hampshire, anyone can call himself a carpenter and start building decks, but it is a criminal offense to call yourself an auctioneer or to offer auctioneering services for compensation unless you have a state license. Seriously. Unlicensed auctioneering is a crime. It’s also a crime to sell real estate or lightning rods without a state license.

If this sounds to you like it makes no sense, that’s because it makes no sense.

Contrary to popular belief, occupational licenses are not really about protecting public health and safety. Primarily, they exist to limit competition. Licensing restricts competition, driving up costs to consumers for the benefit of those who are already in the field.

When you showered today, did you wash your hair? If so, you engaged in an activity so dangerous that your state government requires anyone practicing it for pay to be registered.

Under state law, a licensed barber or cosmetologist may employ someone to wash hair. That person “may perform only the following functions: shampooing, rinsing and removing rollers or permanent rods, rinsing treated or untreated hair, and other cleansing or sink-related functions not requiring the skill of a cosmetologist or barber.”

A “shampoo assistant apprentice” is an occupational category in state law. It requires registration and the payment of a $25 fee — just to wash hair. Anyone who hires an unregistered shampoo assistant apprentice can be found guilty of a class A misdemeanor. Class A misdemeanors are punishable by up to a year in jail and a fine of up to $2,000.

This isn’t just crazy. This is a whole quilt of crazy.

New Hampshire’s crazy quilt of occupational licensing regulations makes it harder for average Granite Staters to find work, and it artificially raises prices for consumers. The state needs to cut up this smothering blanket and free the economic activity it suppresses.

Rep. Bill Ohm, R-Nashua, has introduced a bill to slowly unravel these opportunity-crushing regulations. House Bill 1685 asserts that “it is the policy of the state that the right of an individual to pursue an occupation is a fundamental right, and that where the state finds it necessary to displace competition, it will use the least restrictive regulation to protect consumers from present, significant, and substantiated harms that threaten public health and safety.”

Granted, the “fundamental right” concept was expressed more eloquently by Thomas Jefferson when he wrote that the pursuit of happiness was an unalienable right endowed by our creator. But it still gets the job done.

HB 1685 does not create a new state department or agency, as some critics seem to believe. It creates a legislative commission to study occupational licenses and recommend fixes to laws and regulations so they adhere to the “least restrictive” policy statement quoted above.

The commission is the exact opposite of a burden on the people. It would relieve a burden placed on them by legislators by working in consort with businesses to artificially limit competition and raise prices.

HB 1685 does not eliminate the practice of regulating occupations. The state will still have a role in imposing legitimate health and safety measures. HB 1685 merely creates a system that enforces the simplification of occupational regulations.

The great French writer Antoine de Saint-Exupery hit on an organizational truth when he wrote, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”

Apply that principle to occupational licensing regulations, and New Hampshire will see an increase in economic opportunity without compromising health or safety.

 

This column was first published in the NH Union Leader and prompted a front-page editorial supporting occupational licensing reform.

There are 19 comments.

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  1. Michael Graham Contributor

    As a reformed “unlicensed lightning-rod dealer,” I oppose this piece in every way possible. Unlicensed lightning-rod sales is a gateway crime that leads to vinyl siding sales and, eventually, a career as a state legislator.

    • #1
    • January 18, 2018, at 5:32 AM PST
    • 14 likes
  2. Spin Coolidge
    Spin Joined in the first year of Ricochet Ricochet Charter Member

    Great post. It needs to get upvoted so we can share it on FB.

    • #2
    • January 18, 2018, at 5:48 AM PST
    • 1 like
  3. I Walton Member

    Good article. Folks should listen to Econ Talk last week on Bootleggers and Bottlenecks where they discuss licensing and certification. It’s all aimed at limiting competition and driving up prices. It’s good that we’re finally beginning to focus on these things. We could drive down the cost of government and everything in the private sector and mixed sectors like health care by dismantling these combinations in restraint of trade. The Institute of Justice is taking some of it to court and winning. They’re a good place to send a few extra dollars.

    • #3
    • January 18, 2018, at 6:08 AM PST
    • 2 likes
  4. Songwriter Member
    Songwriter Joined in the first year of Ricochet Ricochet Charter Member

    DrewCline: Contrary to popular belief, occupational licenses are not really about protecting public health and safety. Primarily, they exist to limit competition. Licensing restricts competition, driving up costs to consumers for the benefit of those who are already in the field.

    This is crux of the matter. And it comes as a surprise to most, who innocently assume all those silly licenses were put in place to protect us from those who would wash our hair incorrectly or sell us faulty fishing rods. Thanks for the post.

    • #4
    • January 18, 2018, at 6:32 AM PST
    • 1 like
  5. Misthiocracy got drunk and Member
    Misthiocracy got drunk and Joined in the first year of Ricochet Ricochet Charter Member

    DrewCline: The state doesn’t license carpenters, auto mechanics, welders or asphalt layers either. Yet your home does not fall apart, commercial buildings don’t tumble down, roads don’t dissolve in the rain.

    < devil’s advocate mode = on >

    One could argue that these trades do not need to be licensed because the products they produce are subject to government inspection and approval.

    By contrast, the state cannot inspect the quality of every individual shampoo job, therefore the shampooists themselves require licensing.

    < devil’s advocate mode = off >

    I’m not saying it’s a good argument, simply that it’s a logically-valid one.

    • #5
    • January 18, 2018, at 7:55 AM PST
    • Like
  6. Brian Watt Member
    Brian Watt Joined in the first year of Ricochet Ricochet Charter Member

    Years ago there was a move to license graphic designers…because you know, an unlicensed graphic designer is liable to recommend a serif font when a sans serif font is much more critical or insist on Pantone 109 rather than a more pleasing Pantone 116. Apparently the effort fell by the wayside and it’s been mayhem, confusion, and utter chaos ever since.

    • #6
    • January 18, 2018, at 10:05 AM PST
    • 4 likes
  7. Pony Convertible Member

    I have a friend who manages the finances of the county library (she manages the library’s books…get it?). At Christmas she made the comment that they were having trouble finding a licensed librarian. At first I though she was joking, but of course she wasn’t. I still can’t figure out how this license protects the public.

    Tony Katz (a periodic Ricochet contributor) told a story on his radio program about a black women who was fined because she was providing hair braiding services without a beautician’s license.

    You are right, it is about protectionism, and providing barriers to entry to the various fields.

    • #7
    • January 18, 2018, at 10:38 AM PST
    • 2 likes
  8. Misthiocracy got drunk and Member
    Misthiocracy got drunk and Joined in the first year of Ricochet Ricochet Charter Member

    Brian Watt (View Comment):
    Years ago there was a move to license graphic designers…because you know, an unlicensed graphic designer is liable to recommend a serif font when a sans serif font is much more critical or insist on Pantone 109 rather than a more pleasing Pantone 116. Apparently the effort fell by the wayside and it’s been mayhem, confusion, and utter chaos ever since.

    Unlicensed graphic designers are why Comic Sans still exists.

    • #8
    • January 18, 2018, at 1:53 PM PST
    • 6 likes
  9. Vectorman Thatcher

    Congratulations on making both the Member and the Main Feed on your very first post!

    DrewCline: The state doesn’t license carpenters, auto mechanics, welders or asphalt layers either. Yet your home does not fall apart, commercial buildings don’t tumble down, roads don’t dissolve in the rain.

    I imagine that local NH jurisdictions follow national building codes for construction permits and inspections, so you’re not 100% free of government. Except for potentially high fees, most people recognize the need for inspections.

    • #9
    • January 18, 2018, at 1:54 PM PST
    • Like
  10. TBA Coolidge
    TBA

    I like to think of myself as a libertarian, but in truth I’m not a very good one.

    Annoying and seemingly random as these licensing regimes are, I am at least grateful that most of them aren’t reigning at the federal level.

    For all that we sneer at requiring a licence for braiding/washing, hair is a vector for disease and infestation; a clueless braidsmith isn’t likely to break Typhoid Mary’s record but can do plenty of harm in any case.

    Government certainly overreaches and protectionism is indeed baked into every industry standard.

    Yet I’m not so sure we should be absolutist with regard to allow just anyone in any profession to hang out their asbestos-soaked shingle.

    • #10
    • January 18, 2018, at 1:58 PM PST
    • 1 like
  11. TGR9898 Coolidge

    While I have no doubt that Protectionism is a strong selling point within a group of practitioners, I strongly suspect the appeal outside those Protected is the Progressive tenant of “Expertice”.

    Progressives love to justify their benevolent tyranny with the excuse of “the experts say…..” And while the Churches of the Ivy are the perfect place for the blessed to become Experts in intellectual pursuits, the unwashed also need their own Sacrament for Grubby Works… And who better to perform that Holy duty than the Priests & Priestesses of the Government itself.

    In more than one instance I’ve seen co-workers horrified at the revelation that I changed my own oil or – gasp – replaced the brakes on my car. One particularly annoying co-worker angrily denounced me as “putting others in danger with my inexperienced activity” (BTW they are a devoutly ‘evangelical’ Progressive) . To them it was irrelevant that my grandfather owned an auto repair business – that was passed down to my father – which was my only part-time employer from age 10 until college graduation. Ordained Experts – in their opinion – are the only one that should be allowed to perform specialized tasks. (I never mentioned the complete rewiring of my house…. because that’s Mom’s side of the family. There are no pictures with my surname on the building)

    Plus – having strictly controlled titles of Expertise bestowed on others forces others to respect your own Expertice title.

    • #11
    • January 18, 2018, at 2:02 PM PST
    • 5 likes
  12. The Reticulator Member

    Very good. Usually when I see an article about occupational licensing I don’t have too sniff too long before I smell a rat – an attempt to get the feds to overrule the states. But I didn’t smell that rat here. I’m all in favor of state efforts to remove state licensing requirements. State efforts to take away the power of local jurisdictions to regulate would be another matter.

    • #12
    • January 18, 2018, at 2:03 PM PST
    • 3 likes
  13. Vectorman Thatcher

    TedRudolph (View Comment):
    In more than one instance I’ve seen co-workers horrified at the revelation that I changed my own oil or – gasp – replaced the brakes on my car. One particularly annoying co-worker angrily denounced me as “putting others in danger with my inexperienced activity” (BTW they are a devoutly ‘evangelical’ Progressive) . To them it was irrelevant that my grandfather owned an auto repair business – that was passed down to my father – which was my only part-time employer from age 10 until college graduation.

    • #13
    • January 18, 2018, at 3:16 PM PST
    • 3 likes
  14. Randy Weivoda Moderator
    Randy Weivoda Joined in the first year of Ricochet Ricochet Charter Member

    DrewCline: A “shampoo assistant apprentice” is an occupational category in state law. It requires registration and the payment of a $25 fee — just to wash hair. Anyone who hires an unregistered shampoo assistant apprentice can be found guilty of a class A misdemeanor. Class A misdemeanors are punishable by up to a year in jail and a fine of up to $2,000.

    So, Mac, what’re ya in for?

    I don’t want to say.

    • #14
    • January 18, 2018, at 7:19 PM PST
    • 3 likes
  15. I Walton Member

    People believe that regulations actually protect us from harms, because, in addition to being told so by those who erect barriers to potential competitors and by government officials who benefit with jobs and power, because bad things happen. They are inevitable. The mistake is believing that just letting economic sectors alone wont reduce the risks. Through time there will be adjustments to all the risks as they are realized because there will be financial losses, tort punishments and loss of clients and reputation. That is the market’s role and nothing does this better, especially in the age of infinite information at our finger tips. Government regulation, driven by organized interests who become more powerful through time and being inflexible, fixed in time, and driven by other interests that grow with time, is subject only to remote and indirect pressure toward correction. Regulation does not reduce risk, even in the absence of corruption and special favors, because it also comes into effect after a harm is discovered, but it does not adjust as rapidly to changing technologies and opportunities and revealed new harms as people and business who are directly affected.

    • #15
    • January 19, 2018, at 5:53 AM PST
    • 1 like
  16. Pony Convertible Member

    These are some of the risks Indiana liquor licensing laws protects us from.

    1. Buying alcohol on Sunday is too risky to consider, unless you are in a restaurant and having food. Being in the process of eating is what mitigates the risk. Having already consumed food doesn’t sufficiently reduce the risk. Therefore you can’t buy any to carry out after your meal. However, micro-wineries/breweries/distilleries make products that are immune from the Sunday risk. So you can safely buy carry out from them on Sunday.
    2.  Once risky Sunday is past, you can buy beer for carry out. However cold beer is riskier than warm beer. Therefore, you local grocery store can’t sell beer cold. They can only sell the lower risk warm beer. You have to go to a licensed liquor store to buy cold beer, because they are trained on how to deal with the cold beer risk. Thus, buying from them is safer.
    3. Of course children should not be exposed to alcohol. Therefore they cannot enter a bar, unless the bar sells above a certain ratio of food$/alcohol$. Then it is safe, but only of there is a barrier, like a protective handrail, between the children and bar. You have to be 21 to go past the safety rail, but you don’t need hardhat, reflective vest, or any other protective gear which is an apparent loophole in the law.
    4. A server in a restaurant must be trained before they can serve you alcohol. Imagine the risk, if they weren’t trained by the state. Therefore, they must complete an online course, take an examine, and pay a tax before they can get their license to serve. I assume this course explains the dangers of drinking alcohol at home on Sunday, and of drinking cold beer.
    5. Bars, restaurants and package stores, must buy from their local distributor. This is because even though the distributor on the other side of the state is licensed, their beer might not be safe to consume locally. Plus competition between distributors would be harmful to consumers.
    6. Drinking while driving, or having open containers, is legal and safe in Indiana. Of course everybody knows if a container is open in your car, your alcohol tolerance is reduced by half. Therefore the blood/alcohol limit for driving is cut in half if you have an open container. Still, if it takes more than 2 beers to push you over the limit, feel free to have a cold one on the way home from work. Certainly this is safer than drinking beer at home on Sunday, even if it is warm.
    • #16
    • January 19, 2018, at 8:19 AM PST
    • 4 likes
  17. Vectorman Thatcher

    Pony Convertible (View Comment):
    These are some of the risks Indiana liquor licensing laws protects us from.

    They are being discussed for repeal in the Indiana House and Senate this term.

    When I lived in Texas in the 1980’s, no auto dealers were open on Sunday. It was difficult to check out the various models. I would have been happy for even a Noon to 5 PM limited time.

    • #17
    • January 19, 2018, at 8:30 AM PST
    • Like
  18. Pony Convertible Member

    Vectorman (View Comment):

    Pony Convertible (View Comment):
    These are some of the risks Indiana liquor licensing laws protects us from.

    They are being discussed for repeal in the Indiana House and Senate this term.

    When I lived in Texas in the 1980’s, no auto dealers were open on Sunday. It was difficult to check out the various models. I would have been happy for even a Noon to 5 PM limited time.

    Auto dealers still aren’t open on Sunday in Indiana, which I like. This allows me to browse the lot without a salesman bugging me.

    • #18
    • January 20, 2018, at 2:00 PM PST
    • 1 like
  19. Vectorman Thatcher

    Pony Convertible (View Comment):
    Auto dealers still aren’t open on Sunday in Indiana, which I like. This allows me to browse the lot without a salesman bugging me.

    I typically know more about the vehicle than the (typically young) sales agent. My last new car purchase (in 2000) was working with someone older than me, who could answer my questions directly, or would get back with the answers later.

    Of course, with modern websites, you don’t have to be on the lot to browse. Only problem here is most of the cars come with black interiors only.

    • #19
    • January 20, 2018, at 2:11 PM PST
    • 1 like

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