Should It Really Be Illegal to Braid Hair Without First Getting a License from the Government?
NPR's Planet Money reporter Jacob Goldstein explains "Why It's Illegal To Braid Hair Without A License" on the NPR website, and in a longer NY Times Magazine article, with the following disturbing factoids:
"In 1950, fewer than 5 percent of Americans worked in jobs that required licenses. Today, it’s roughly 30 percent, and that number is likely to grow.
There are more than 1,000 licensed professions in the United States. As the country industrialized, state governments wanted to protect their citizens and create standards not just for lawyers and doctors but also for basic services. It didn’t take long for professional groups to find that they also stood to benefit from the regulations. Over the years, more and more started to lobby for licensing rules, often grandfathering in existing professionals while putting up high barriers to new competitors. In fact, businesses contorting regulation to their own benefit is so common that economists have a special name for it: regulatory capture."
MP: And along with regulatory capture and occupational licensing, we get concentrated, well-organized "industry cartels" that devote resources towards rent-seeking to protect and expand their cartel power, inevitably with outcomes that damage consumers. For example, according to University of Minnesota professor Morris Kleiner, who is mentioned in the NY Times article, licensed workers earn 15% more on average than their unlicensed counterparts, a premium that raises prices to consumers and adds more than $100 billion a year to the cost of those services to consumers.