One of the most common ways that interest groups work to push their above market levels at the expense of society is through occupational licenses. By raising the legal barriers to entry, workers are able to decrease their competition and drive up their wages.
A common reaction these complaints is that “shouldn’t doctors and nurses be required to have occupational licensing?”. If only it were just doctors and nurses we’d have much less of a problem. The list of jobs requiring licenses is absurd reading. A sample from Klein (2009) includes junkyard dealers in Ohio, auctioneers in several states, beekeepers in Maine, fortune tellers in Maryland, lightning rod installers in Vermont, lobster sellers in Rhode Island, manure applicators in Iowa, movie projectionists in Massachusetts, mussel dealers in Illinois, rainmakers in Arizona.
As this list of absurd jobs suggests, licensing is more widespread than most would imagine. In the 1950s around 5% of the workforce had jobs that required state level licensing. That number had grown to 18% by 1980, and at least 20% by 2000. According to a recent paper by Morris Kleiner and Alan Krueger nearly 35% of workers are now required to be certified or licensed.
What does having a license entail? According to Kleiner and Kreuger, among licensed occupations 85% are required to take an exam, 70% must take continuing education classes, 43% require a college education, and more than 50% require an internship. These requirements do not sound so absurd if you’re thinking about nurses and doctors, but remember that the list includes chimney sweeps and fortune tellers.
The recent trend of occupational licensing for interior designers highlights that it is not just the highly skilled that have steep licensing requirements. A bill recently introduced in the Pennsylvania House of Representatives would require interior designers to have a four-year design school degree, a two-year internship, and to pass an exam.
Like the majority of occupational licenses, there is no economic justification for this. The sole purpose is a handout to interior designers who already have these qualifications.