Jacob Goldstein
The New York Times
6/12/2012
…There are more than 1,000 licensed professions in the United States, partly a result of more than a century of legal work. As the country industrialized, state governments wanted to protect their citizens and create standards not just for lawyers and doctors but also for basic services. It didn’t take long for professional groups to find that they also stood to benefit from the regulations. Over the years, more and more started to lobby for licensing rules, often grandfathering in existing professionals while putting up high barriers to new competitors. In fact, businesses contorting regulation to their own benefit is so common that economists have a special name for it: regulatory capture. “Everyone assumes that private interests fight like crazy not to be regulated,” says Charles Wheelan, who teaches public policy at the University of Chicago. “But often, for businesses, regulation is your friend.”…
…Once upon a time, these barriers weren’t such a big deal. In 1950, fewer than 5 percent of Americans worked in jobs that required licenses. Today, it’s roughly 30 percent, and that number is likely to grow. In the coming years, global competition and the increasing rate of technological change will force many workers to bounce from career to career throughout their working lives. Nearly 13 million Americans are out of work; since the start of the recession, the manufacturing sector alone has lost about two million jobs. There’s little doubt that laid-off factory workers will find themselves increasingly looking for opportunities in landscape contracting, athletic training and in hundreds of other professions that require licenses. “When, say, the tattoo artists come up for licensure, nobody follows the debates, nobody outside the profession cares about the resolution,” Wheelan says. “You add up how many of these there are — hundreds — and suddenly we’re talking about a sizable portion of the labor market.”
Almost nobody is calling for wholesale abolition of professional licensing. I sleep better at night knowing that the commercial pilots flying over my apartment are trained and licensed. A wide range of economists and activists, however, are looking for ways to loosen the rules in a productive way…
Read the entire article at The New York Times.
