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Business Observer Thursday, Feb. 6, 2020 6 months ago

Dropping licenses will boost economy

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The racket of requiring occupational licenses protects existing businesses more than it protects consumers.
by: Matt Walsh Editor & CEO

The name of this particular former state lawmaker from Polk County has faded from memory, but not this priceless pearl of principle that she used while serving in the Florida House of Representatives:

“I always asked myself: ‘Will this bill, if passed, increase people’s personal liberty or reduce it?”’

Her votes fell on the side of increased liberty, more freedom.

If only that guided more lawmakers — at every level.

As we know, if you examined the hundreds of bills filed for each session of the Legislature, you would find the vast majority of them fall on the side of taking away or constricting someone’s personal liberty. That’s the nature lawmaking — to pervert the purpose of the law (which is to defend everyone’s person, life and property) in someone’s favor at the expense of someone else.

Walter Williams, one of this nation’s wisest thinkers in classical liberalism and economics, says succinctly: “The American people, it’s sad to say, love to live at the expense of somebody else.”

But shockingly, every now and then a legislator or group of legislators sees the light of liberty. Such is the case this year in Tallahassee with two bills that, if passed, would make Florida a freer, less expensive and better place to live and work.

The bills are House Bill 1193 and Senate Bill 474, both entitled the “Deregulation of Professions and Occupations.” The House bill is the more expansive of the two. It proposes to remove or reduce licensing requirements for more than a dozen occupations (see page 13), including interior designers, barbers, hair braiders, landscape architects, talent agents and, even boxing timekeepers. Yes, Florida requires boxing timekeepers to have a license.

You know the arguments the proponents of licensing always make: It’s for consumers’ protection. Requiring  practitioners to be certified and licensed will insure that when you have your hair cut, you’re not going to get ripped off and butchered; or that when you hire a landscape architect he or she knows the difference between poison ivy and a jasmine vine.

The same arguments are made for the professions —physicians, dentists, lawyers, accountants, professors, teachers and Realtors. When the state requires these practitioners to pass Bar exams and CPA exams or obtain a Realtor’s license, the state, presumably, is providing an imprimatur for consumers to be assured.

But this practice is such a reflection of human nature. We consumers want what’s easy; we don’t want to investigate every practitioner’s qualifications. We want to see a piece of paper on the braider’s wall that says “the State” made sure you’re not going to get ripped off. There is no such thing anymore as Caveat Emptor.

At the same time, these occupational licenses, to an extent, are indeed licenses to charge consumers more than they otherwise might be charged. They’re state-sanctioned protectionism. They help limit the supply of whatever profession or occupation that requires a license. And, duh, Econ 101: When you limit supply, the price goes up.

This licensing racket — a money generator for the state and a limit on competition — is a national kudzu. According to a White House report, in the 1950s, less than 5% of the American work force was required to have an occupational license to be able to work. Today, more than 25% of working people nationally must have a license. Of the 10.2 million people working in Florida, 28.7%, or 2,927,115 people, are required to be licensed.

To their credit, Republican lawmakers finally are realizing occupational licensing is a unnecessary harness on the state’s economy; on people’s ability to work and start businesses; and, frankly, on personal liberty. 

To that end, it appears the related bills in the House and Senate are on their way to the two floors. Both bills have made it through two of three committees with almost no opposition — a sign these measures have the endorsement of Speaker Jose Oliva and Senate President Bill Galvano.

Matt Walsh

No doubt, there will be some impassioned opposition to scaling back occupational licenses from those who want government-sanctioned protection. And there will be those who plead: “What about the safety of consumers? Who will protect the widows and orphans from unscrupulous hair braiders and crooked boxing timekeepers?”

Nothing is fail-safe. A license won’t stop bad actors. The best protection comes from doing what you do before you let the heart surgeon cut. You find out on your own. You don’t rely on a framed piece of paper hanging on the wall.

In the end, the free market is the best protector. If a timekeeper cheats or a nail specialist botches your nails, they won’t be in business.  

 

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