(2012-05-11) Taylor Occupational Licensing Vs Job Creation

Timothy Taylor notes the conflict between Occupational Licensing (Credentialism) and Job Creation.*

Nearly one-third of the U.S. labor force works in jobs where some form of government license is a requirement.

Kleiner and others investigate this subject by looking at differences in licensing requirements for a certain occupation across states, and searching for evidence of wage and quality differences. A typical finding is that the wage differences are readily perceptible, but the quality differences are not.

"Quite literally, EMT-s [emergency medical technicians] hold lives in their hands, yet 66 other occupations have greater average licensure burdens than EMTs. This includes interior designers, barbers and cosmetologists, manicurists and a host of contractor designations. By way of perspective, the average cosmetologist spends 372 days in training; the average EMT a mere 33."

My own guess is that the politics of passing state-level occupational licensing laws is driven by three factors: 1) lobbying by those who already work in the occupation to limit competition (Trade Guild); 2) passing laws in response to wildly unrepresentative anecdotes of terrible or dangerous service (Nanny State); and 3) the tendency when setting standards to feel like more is better. But in a U.S. economy which is hurting for job creation, especially jobs for low-income workers, states should be seriously rethinking many of their occupational licensing rules. Many would be better-replaced with lower standards, certification rather than licenses, or even no licenses at all.*