New Jersey hair braiders recently scored an important victory, one that serves as a major blow to government licensing efforts nationwide. Lawmakers overwhelmingly approved legislation that would exempt hair braiders from The Garden State’s rigid licensing requirements, and now the bill heads to Governor Phil Murphy (D-NJ)’s desk to be signed.
For years, the nation’s natural hair braiders, many of whom specialized in the skill in their African homelands, have been mandated to apply for a cosmetology license just to pursue this entrepreneurial endeavor. Many of these individuals practiced without a license, which has been rather risky, considering that some states, like Tennessee, maintain fines of up to $100,000.
The measure doesn’t remove all superfluous red tape. The bill establishes a new regulatory six-member board called the Hair Braiding Establishment Advisory Committee that will be managed by the Division of Consumer Affairs in the Department of Law and Public Safety under the current New Jersey State Board of Cosmetology and Hairstyling (try saying that 10 times fast).
Still, the legislators believe it’s a step in the right direction.
Assemblywoman Shanique Speight said in a statement:
“We should be encouraging entrepreneurship, not bogging it down with senseless bureaucracy. Why are we asking hair braiders to spend time and money on unrelated training for a skill they’ve already mastered? Creating an advisory committee to oversee these establishments will help protect consumers without placing unnecessary burdens on owners.”
If only this could be applied to all other industries, too.
One more thing: You can thank those evil Koch brothers for helping repeal these ridiculous regulations.
A History of the Licensing System
In an attempt to extract every dollar from businesses – large and small – governments have utilized the occupational licensing system; an initiative that has stifled small- and medium-sized businesses (SMBs) for a century. But it isn’t only entrepreneurs who face the wrath of state licensing. We have all been mandated to get a license, from driving an automobile to adding a wall to our homes to adopting a dog or cat.
Today, we are told that the purpose of driver’s licenses is to create safe motorists. However, if you comb through the history of the scheme, you discover that driver’s licenses did not have any photo identification nor any safety testing requirements for the driver. Like all other egregious bureaucratic efforts, the only purpose was to raise revenue for the government, which has been a cash cow due to the prevalence of the car. The driver’s license in your wallet is merely proof that you have paid yet another tax.
There are generally three types of licenses:
Valid cases made that all three of these regulations are terrible, but the most odious of all is the occupational license. It requires you to be licensed to enter a specific profession or vocation for compensation. The Brookings Institution reports that one-third of U.S. workers need the government’s blessing to perform their jobs, up from just 5% in the 1950s.
Just to attain a license can be a frustrating process. You will need to fill in complicated paperwork, pay hefty fees, go through extensive training, and face a whole host of other red tape protocols.
The Nevada Policy Research Institute’s Robert Fellner compiled a list of absurd licensing rules across the country:
“Barbers, for example, must submit to a national-high 890 days of education and apprenticeship, pass four exams and pay $140 in fees. Add to this the fact that Nevada does not offer reciprocity for licenses obtained in other states, including the 33 other states that require, at most, 350 days of education and training.
Yet an emergency medical technician can receive a license after only 26 days of education.
General contractors — such as painters, cabinet makers, and pipe layers — must pay a national-high $1,030 and lose four years to an apprenticeship before the State will permit them to work.
And then there is the most egregious form of industry protection in the country: Nevada’s licensing of interior designers, a profession for which 46 other states rightly require no license at all. Nevada demands payment of a $250 fee and six years of education or experience before one is allowed to dispense such potentially dangerous advice as which sofa or coffee table would go best with the living room décor.”
Central planning advocates aver that it keeps the public safe by ensuring professionals are competent and preventing unscrupulous people from offering illegitimate goods and services to the consumer. There is very little research to support this assertion. In fact, licensing only does more harm than good:
- It acts as a barrier to entry; old businesses keep newcomers out.
- It enriches some at the expense of others.
- It raises prices and reduces competition.
- It wastes valuable police resources.
- It encourages rent-seeking rackets.
Simply put: Licensing is just another racket for politicians and cronyists who want to fleece the public.
So, want to drive a taxicab? Get a license. Want to walk dogs? Get a license. Want to cut hair? Get a license. Without one, you are prohibited from offering any of these services. Should you skirt around the law, you’ll face steep financial penalties, and even jail time.
Let the Market Dictate
Uber is one of the most innovative businesses around. Unlike taxi cabs, you can find out who is driving you from point A to point B. When you order a ride on the mobile app, you can learn all you need to know about the driver: name, star ratings, and what other past users thought of the person. Both the driver and the rider are held accountable for their behaviors and actions.
The internet has kept the marketplace in check. Thanks to Yelp, Google, TripAdvisor, Foursquare, Facebook, and many other websites, shoppers can determine if they should hire that plumber, visit that restaurant, or purchase Boston Red Sox merchandise from that vendor in Las Vegas.
Indeed, there will always be unscrupulous individuals who fall through the cracks. That said, history has repeatedly shown that they don’t survive very long in the market, even in the pre-internet days. If someone likes your product or service, they will continue to patronize your business. If not, your dishonest scheme will fail.
Meanwhile, those who are licensed don’t exactly have the greatest of track records.
Public school teachers are churning out illiterate children and a shocking amount are having sex with their students. Taxi cab drivers have offered subpar experiences for decades. The Federal Communications Commission (FCC), lobbied by the major television networks, limited choice for years, even when cable television technology was around – as a result, we had a long time of propaganda and fake news.
A License to Live?
The income tax is a levy on the fruits of your labor. The sales tax is, as economist Murray Rothbard called it, “a payment for permission-to-live.” The business and occupational licensing system is a blockade to work.
In a country that was the beacon of the free-enterprise system, what happened? Why do we need to ask the state for consent to work and earn a living?
Politicians routinely lie to the public, telling everyone that they are standing up for consumers by instituting a barrage of taxes, licenses, and regulations. We tend to fall for the mendacity, especially in a society that is growing more resentful of business and capitalism. But when you personally become a victim of licensing, you begin to realize that genuine progress is being held back by the dinosaurs in the state capitol and the anti-competition leeches in the marketplace.
Do you support or oppose licensing? Let us know in the comments section!