Wall Street Journal: Licensing Laws Causing “Lost Human Potential”

Americans on both sides of the aisle are finally beginning to wise up to a type of law that keeps people out of work, new businesses from operating and entrenched special interests from having to compete.

Occupational licenses are essentially government permission slips to work. Getting one usually requires a lot more time and money than the average young person can afford. For some professions, like doctors and lawyers, occupational licensing laws seem like a no-brainer. But for things like hair braiding, they seem a bit much.  

Until very recently, it cost $10,000 for someone to get their occupational license to braid hair in the state of Indiana. On Sunday, the Wall Street Journal expressed its support for the state’s decision to free prospective hair braiders of occupational licensing requirements:

The rules are often supported by businesses or others (cosmetology schools) that profit from barriers to competition. States like the fees people pay for the privilege of practicing their trade, but they cost far more in lost human potential and entrepreneurship.

Indiana is the just the latest state to exempt hair braiders from licensing laws—21 others have already done so. Last month, New Hampshire passed a similar law of their own. But while more states are starting to catch on, the overall problem posed by occupational licensing has grown worse over the years.

Today around one in four workers is required to have a license to do his or her job. That’s up from one in 20 in the 1950s. Research has also shown that occupational licensing leads directly to higher costs for consumers and stifles job growth. This results in 2.85 million fewer jobs with an annual cost to consumers of over $200 million, without even providing the claimed benefits in consumer safety or quality. To make matters worse, the brunt of these laws are felt by the least fortunate and young people who are just trying to get their careers started.

Lawmakers may be trending in the right direction, but this issue is far from settled. If our generation wants to truly have a better chance at success, we need to make sure our elected officials side with us – not with the special interests that want these barriers to remain.

Author Generation Opportunity

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