Obama's economics team is taking on one of America's most underrated economic problems

[PoliticAverse]

Occupational licensing rules, which require government approval (typically by a state government) before a person can practice a given profession, are one of the most under-discussed aspects of the American labor market. A new report from the White House Council of Economic Advisers argues that the way licensing is applied in practice often leads to higher prices, reduced opportunity, and more macroeconomic fragility.

Regulating entry into certain kinds of professions on the grounds of health and safety makes sense, but once a process is set up to exclude people from doing a job, incumbent practitioners have a strong economic incentive to use the licensing board as a means to eliminate competition. Today, more than a quarter of American workers need a license to do their job, representing a fivefold increase relative to the 1950s.

You can tell from the enormous state-to-state variation that rules are often going well beyond what's needed for safety. For example, the report notes that "South Dakota, Iowa, and Nebraska require 16 months of education to become a licensed cosmetologist, while New York and Massachusetts require less than 8 months." If you heard your friend was going to get a manicure in Boston, would you fear for her safety or tell her to go to Des Moines instead? Of course not.

The report also notes that licensing has in some cases become a cudgel with which to punish the already disadvantaged. Over a dozen states have rules that can make non-payment of student loans into grounds for license revocation — turning state licensing boards into debt collectors. And rules barring people with felony convictions from obtaining licenses are widespread, which tends to exacerbate all the problems with racial and socioeconomic disparities in the criminal justice system.

Read the rest at: http://www.vox.com/2015/7/28/9052179/cea-report-occupational-licensing

Direct link to White House report (.pdf, 77 pages):
https://www.whitehouse.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf

[drm604]

1. Pay your bills or we'll take away your ability to pay your bills!

WTF? What sense does that make?

[Igel]

2. The arguments are multipurpose.

Duncan's pushed to make sure that all teachers are highly qualified. That usually means having the right pieces of paper and certifications. Requirement standards are all over the place, BTW: It's unclear that the more onerous of them are any more helpful than the least onerous. (Bad Obama. Bad, bad.)

Obama, rumor has it, helped narrow the field for his first election by making sure all the proper forms and paperwork were filed by competitors and getting at least some off the ballot. (??)

Unions have a long history of maintaining higher "prices" for labor by requiring closed shops. (Wait--isn't that one of the evils in the OP? I'm glad Democrats don't like unions. Huh?)

Lawyers have the bar exam to pass. Most think it's a hassle, and often what they do is marginally related to what's tested. Some states require education to pass the bar; some don't. (What? Certification and performance might be distinct? Oh, that's in the OP. Good that there aren't any lawyers in the White House. Oh.)

Doctors from other countries often don't bother with getting their credentials beefed up to US standards. Those countries often have more than adequate medical care. With lower standards. Yes, we have a doctor shortage. (The certification standards are variable, perhaps without justification? Duh.)

Many jobs require a minimum security clearance--often jail time disqualifies you. And debt can get your clearance revoked. (What, the government can deny you the ability to pay down your debt if you have debt to pay down?)

Any certification acts as a gatekeeper. Revocation of certifications or permission for a job is often later used as cudgels to get those with jobs to pay student loans, taxes, fees.


Causes me to wonder what the politicking behind the scenes is, because I have no doubt that many instances where umbrage could be taken it isn't. Who needs smacking or who's feeling the need for a bit of Lebensraum in their sinecure?