Tuesday, May 24, 2011

Professional _______________ (You fill in the blank)

As a Professional Engineer in Texas, I am part of the U.S. workforce that needs a license to practice their occupation.  In the 1950s, fewer than 5% of American workers needed licences.  After 50-years of decreasing regulation in major segments of the economy, the figure has climbed to almost 30% of the workforce.  In a global market of ideas and services, our domestic market is one of the most licenced in the world.

Provided below is a quick summary of the "professions" and occupations requiring a licence - -
  • A barber in California - - requires studying the art of cutting and blow-drying for almost a year.
  • The wig trade in Texas - - 300 hours of classes and must pass both written and practical exams.
  • Alabama manicurists - - 750 hours of instruction before taking a practical exam.
  • Interior designer in Florida - - a four-year university degree and a two-year apprenticeship and pass a two-day examination.  One really has to admire the interior design cartels when they have to justify this.  Interior designers (the licenced ones) have predicted that unlicensed designers would use fabrics that might spread disease and cause 88,000 deaths a year.  Another suggested, even more alarmingly, that clashing color schemes might adversely affect "salvation".  We can all relate to the terrible threat of rogue interior designers and their potential to do harm.
  • Utah nail technician - - will require 2,000 hours of study and $18,000.
The list of "professions" is large and getting larger -- florists, handyman, wrestlers, tour guides, frozen-desert sellers, firework operatives, second-hand booksellers, cat-groomers, dog-walkers, tattoo artists etc.  This is big business for the cartels and incumbents - - Morris Kleiner of the University of Minnesota calculates that licencing boosts the income of licensees by about 15% (union membership is just a bit higher - - 24%).

"Rules for Fools" - - increases the cost of the service and reduces competition.  The folks at Monty Python saw the silliness of restricting the sale of unlicensed coffins (difficult to understand the harm a corpse might suffer in a simple pine box) - - in Britain only 13% of workers need licences (this has doubled in the last 12 years).

See the Schumpeter column in the May 14, 2011 Economist.

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