State licensing of professions

Great article by Donald Boudreaux on occupational hazard.

Texas, alas, does today license interior designers “to ensure” (as it says in its statute books) “that the public health, safety, and welfare are protected.” How thoughtful.

Not coincidentally, however, another effect of this licensing scheme is to raise the incomes of licensed interior designers in Texas. By artificially restricting the number of people who can sell their services as designers, incumbent designers are protected from the full force of competition — i.e., consumers have their range of options artificially restricted. Interior-design customers have less choice and pay higher prices.

Sadly, this example of occupational licensing is only one of hundreds throughout America. Physicians and lawyers are, of course, widely known to be licensed. But did you know also that, in some states, people without government licenses cannot practice trades such as florist, lobster seller, motion-picture projectionist, hair braider, junkyard dealer and manure spreader?

In all cases, of course, industry incumbents proclaim only their public-spirited interest in protecting consumers from incompetent practitioners. In all cases, of course, consumers should reject these self-serving proclamations by incumbent producers.

Consumers should ask themselves why they need government to screen for them which particular interior designers, florists and junkyard dealers they are permitted to do business with. Are consumers really so naïve as to shop for the services of the likes of hair braiders and physicians only on the basis of price? I think not. Indeed, especially for professionals such as physicians and attorneys, consumers have strong incentives to search for, and pay attention to, information about the quality of different doctors and lawyers.

Government licensing is a widely used way to (allegedly) protect consumers from shoddy service, but as I’ll explain in my next column, it is neither the only nor the best way.

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