One way to help improve the lives of low income people is to focus on how the government can give them more. Sometimes this can be very effective, and even desirable. But a far less common way is to look at how the government can stop doing stuff that is making them worse off. Occupational licensing is a great example of this. In the 1950s, around 1 out of 20 jobs required a license. Now the number is around 1 in 3. This red tape keeps a lot of low income people out of better jobs with better income. This issue receives the discussion it deserves in an excellent new report from Angela Erickson and John Ross at the Institute for Justice. They looked at 102 occupations that are licensed in at least one state and where incomes are below the national average. As an important improvement on past research, they document the difficulty in getting licensed by looking at the five main costs of licensing: fees, education and training, exams, minimum age and minimum grade completed. This allows them to measure not only how widespread licensing is, but how much of a cost it imposes. The following are a couple of facts worth noting from the report, but you should read the whole thing
1. Those receiving licenses have lower income than the average worker ($30k vs $47k), more likely to be minority, and more likely to be a high school dropout or have just a high school education than the general population. Importantly, those crowded out of these jobs probably have even lower income and even less educated than those who actually got the licenses.
2. Forty-seven states find it unnecessary to license interior designers, and yet the four that do find it necessary to receive 2,190 days of training to become one. This is a joke, and congressmen in those four states should be ashamed of themselves for this obvious and egregious handout.
3. Defenders of licensing regularly point to safety concerns, but for a large proportion of the occupations that are licensed somewhere, there are other states where they are not licensed, and in these states we do not witness of epidemic of wildly untrained barbers accidently cutting off ears, for example. In addition, some jobs that clearly do involve safety often require vastly less training than others where the argument is much more tenuous. For instance, cosmetologists on average require 372 days of training, while EMTs only require 33.
4. States should have commissions with the power to strike down these laws unless evidence is presented that the licenses provide a significant health and safety benefit that justifies the cost. For many occupations if one wished to be a tedious contrarian one could say “well, you see florists are a public health concern because…” and then Slate your way into a convoluted argument in defense of a license, but the beauty of this study is that it shows other states where licensing isn’t required. Angry and concerned citizens of 26 states should be saying “South Carolina doesn’t require a license to be a taxidermist, so why the fuck do I have to have one?”
5. If you appreciate this study, you should donate some money to The Institute for Justice. They do excellent and essential work in areas that go ignored far too often. Sometimes people hold charitable donations up to a high standard by asking “is there some charity I should donate to that would increase welfare more, like giving money to starving kids?”. But this is incorrect framing. You don’t ask that question every time you go to buy something at the store, and if even if you do, you answer “no” enough to buy lots of stupid unnecessary things (don’t lie, you do). But if you’re going to ask that question, why should you only do so for charitable donations rather than for all spending? Donations are consumption, so let them compete with your other consumption, don’t put them in an isolated and elite league of consumption that pits them against starving children in Africa. Pit them against an extra large container of popcorn at the movies. A donation to The Institute for Justice increases welfare way more than an extra large popcorn.