Sunday, March 15, 2020

1889 Institute: Oklahoma Legislature should work to reduce occupational licensing requirements

What’s So Bad about Occupational Licensing?
By Mike Davis

Why does accepting payment for a service make an otherwise-benign activity suddenly illegal? Accepting money can turn cutting a friend’s hair into a criminal activity - practicing cosmetology without a license. Have you ever paid a professional for a bad haircut? Did their cosmetology license prevent it? Have you ever had a bad meal in a restaurant (which is highly regulated)? Have you ever had a great home cooked meal? So how much does licensing do to ensure high standards?

Estimates show that occupational licensing costs consumers $203 billion per year nationally. But a simpler case against licensing that doesn’t involve math or economics is that it’s simply wrong. The right to earn a living is a foundational freedom, explicit in our Declaration of Independence: “among these are life, liberty, and the pursuit of happiness.” That final phrase encompasses both property rights, and the right to one’s own labor.

There have always been limits to what one can take money for - murder for hire has always been forbidden. But people should mostly be able to pay for legal services they would prefer not to perform themselves. They should also be free to offer these services without a permission slip from their state government.

In Oklahoma, our constitution declares that “All persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry.” This encompasses both a protection against socialism, and a right to earn a living.

Licensing makes it harder to start a new job. It takes time and money to get a license. These barriers disproportionately impact those who already have a low income. Think of it as a tax on the American dream.

While licensing arguably helps consumers to know who is good at a job - or at least competent enough to pass a government test - there are better ways of informing consumers that do less harm to the economy and provide better information. There are websites that review professional service providers. This should be sufficient for low-stakes occupations. If your only fear is a bad haircut, good reviews should be enough.

For higher stakes services, something like 1889’s Private Certification legislation would allow consumers to see different levels of proficiency - a private certifier would have incentives to offer testing that shows a practitioner can actually do various tasks related to their job. It also would give practitioners options for various certifications. Competing certifiers would stake their reputations on the level of service their practitioners provide. Which do you trust: government monopoly or competitive enterprise?

The Oklahoma Legislature should work to reduce occupational licensing, and end this tax on the American Dream.

Mike Davis is a Research Fellow at 1889 Institute. He can be reached at 


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