James Sutton writes for National Review Online about Pennsylvania’s approach to occupational licensing reform.
Pennsylvania governor Tom Wolf has taken steps toward making it easier for low-skilled workers to enter the job market, releasing a proposal to eliminate state licensing for 13 jobs and streamline the process overall. Overly restrictive licensing and credentialing required for relatively low-skilled occupations, such as barbers and hair braiders, will be repealed or significantly reduced.
Government licensing boards have been a growing problem in the American economy since the 1950s. In 1950, 5 percent of workers were required to hold licenses in their professions; that number is now at 22 percent. In thirteen states, even bartenders must be licensed. And state governments tend to farm out the job of licensing to professional associations, which have obvious incentives to restrict entry and inflate wages.
Licensing disproportionately locks out poorer workers. According to Shoshana Weissmann, a fellow at the public-policy research organization R Street, wealthier people “can afford the school (for licensing). . . . Poorer people can’t afford school, and even if the government pays for it, the opportunity cost (of forgoing work for school) is too high.” So workers with less money are stuck in worse-paying jobs, with their way up the income ladder blocked off.
Those who pay for the services are also disadvantaged by licensing; poor consumers, deterred by higher costs, often resort to doing jobs for the electrician or contractor themselves, with predictably shoddy results.
