A "license" is a form of monopoly. The government says to its friends ("special interests"), you may do business, but your competitors may not.
If you, as a consumer, want to buy a better product at a lower price from an "unlicensed" source, you are prohibited from doing so.
Government licenses are usually justified on the grounds that you are too stupid to choose wisely, so politicians (who are wiser than you are) should make choices for you. But making mistakes and learning from (taking personal responsibility for) those mistakes is the path to wisdom. Licenses make people stupid and irresponsible.
In 1993, 15-year-old Monique Landers who lived in a poor neighborhood of Wichita, Kansas, was a participant in the New York-based National Foundation for Teaching Entrepreneurship (NFTE). NFTE seeks to introduce ghetto youngsters to the world of entrepreneurship by teaching them to devise business plans and then helping them start a business. Businesses operated by these youthful participants include car washing and detailing, party magicians, stereo equipment installation, and baby-sitting. Monique started a hair braiding business called "A Touch of Class." She braided the hair of her friends and family for $15 and $20 and was so successful that Monique was invited to New York City to be honored as one of five outstanding high school entrepreneurs. That was when her trouble
started.
A local newspaper in Wichita published the story about her award. Having read about Monique's success, several beauty school operators and hundreds of angry hairdressers complained to the Kansas Cosmetology Board about Monique's lack of a license. In the name of public health and safety, the Kansas State Cosmetology Board, issued a formal letter of warning to Monique, informing her that it was illegal for her to touch hair for profit without a license, and if she did not immediately cease her practice she would be subject to a fine and/or 90 days imprisonment. While the stated motivation for shutting down "A Touch of Class" was that of protecting public health and safety, the real purpose was to protect the monopoly income of practitioners. It's not a violation of Kansas law to braid hair, per se — it becomes a
violation when money is involved, therefore threatening the incomes of the incumbent cosmetologists.
www.LimitedGovernment.org
The justification [for licensure] is always the same: to "protect the consumer." However, the [real] reason is demonstrated by observing who lobbies at the state legislatures for imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than its customers.
Milton Friedman and Rose Friedman, Free to Choose
(New York: Harcourt, Brace, Jovanovich, 1979), p. 240.
Do you want to be a fortune teller in Maryland? Your future better include a license from the state. How about being a hair braider in Mississippi? You'll need 300 to 1,500 hours of training and government permission. Want to sell flowers in Louisiana? Only licensed florists can do that. And almost every state requires certification if you want to move furniture and hang art while calling yourself an interior designer.
In California, there are a total of 177 different jobs that require a special license or credential, the most in the country, according to a new Reason Foundation study examining occupational licensing trends.
Northeastern states aren't much better. Connecticut, Maine and New Hampshire all require job seekers to obtain a license before performing more than 130 jobs. In stark contrast, you can do most of those very same jobs - without a license - in Missouri, where just 41 careers require certification.
Ranking the States on Occupational Licensing
States (Number of jobs requiring a license)
| 1. California (177) |
26. Virginia (89) |
| 2. Connecticut (155) |
27. Louisiana (88) |
| 3. Maine (134) |
28. Ohio (88) |
| 4. New Hampshire (130) |
29. Georgia (85) |
| 5. Arkansas (128) |
30. Indiana (85) |
| 6. Michigan (116) |
31. Iowa (85) |
| 7. Rhode Island (116) |
32. Utah (84) |
| 8. New Jersey (114) |
33. Delaware (83) |
| 9. Wisconsin (111) |
34. Montana (79) |
| 10. Tennessee (110) |
35. Texas (78) |
| 11. Alaska (109) |
36. New York (77) |
| 12. Massachusetts (107) |
37. West Virginia (77) |
| 13. North Carolina (107) |
38. Wyoming (74) |
| 14. Oregon (107) |
39. Arizona (72) |
| 15. Vermont (107) |
40. Alabama (70) |
| 16. Florida (104) |
41. Colorado (69) |
| 17. New Mexico (104) |
42. North Dakota (69) |
| 18. Maryland (98) |
43. Mississippi (68) |
| 19. Nebraska (96) |
44. Hawaii (64) |
| 20. Minnesota (95) |
45. Pennsylvania (62) |
| 21. Nevada (95) |
46. Idaho (61) |
| 22. Illinois (93) |
47. South Carolina (60) |
| 23. Kentucky (91) |
48. Kansas (56) |
| 24. Oklahoma (91) |
49. Washington (53) |
| 25. South Dakota (90) |
50. Missouri (41) |
"Most of these licensing requirements are completely arbitrary," said Adam B. Summers, a policy analyst at Reason Foundation and author of the report. "You see that clearly when examining neighboring states. California has 177 job categories licensed. But if you take one step across the state line into Arizona just 72 careers are licensed. In North Carolina you need a license to do 107 jobs. Next door in South Carolina, only 60 jobs require certification."
Proponents claim these licensing requirements are needed to protect the public from unscrupulous, incompetent, or dangerous practitioners. However, numerous studies show these laws actually reduce consumer protection and public safety, according to the Reason Foundation report.
"These laws are created under the guise of 'helping' consumers," Summers said. "In reality, the laws are helping existing businesses keep out competition, restricting consumer choice, destroying entrepreneurship, and driving up prices."
Full Report Online
The full study, Occupational Licensing: Ranking the States and Exploring Alternatives, is available online at www.reason.org/ps361.pdf.
About Reason
Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason produces respected public policy research on a variety of issues and publishes the critically acclaimed monthly magazine, Reason. For more information, please visit www.reason.org.
Contacts
Chris Mitchell, Director of Communications, Reason Foundation, (310) 367-6109