It’s Valentine’s Day and plenty of men and women will be going out on a date tonight. Chocolates and flowers, typical Valentine’s Day items, likely fetch premium prices today. But that’s expected. What about that hair cut or that mani/pedi you may have gotten just in time for your special outing? You actually don’t pay a premium for those just today or during any other holiday. Nope, state licensing requirements ensure that you pay extra for those any day of the year.
Now, some argue that licensing requirements are important to protect consumers by ensuring that florists, nail technicians, barbers and hair stylists receive training regarding hygiene and safety concerns. Fair enough. However, many of the state licensing rules go way overboard in requiring hours and hours of training, not to forget the cash expenditures associated with these training programs. The Wall Street Journal reports:
Texas, for instance, requires hair-salon “shampoo specialists” to take 150 hours of classes, 100 of them on the “theory and practice” of shampooing, before they can sit for a licensing exam. That consists of a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner.
California requires barbers to study full-time for nearly a year, a curriculum that costs $12,000 at Arthur Borner’s Barber College in Los Angeles. Mr. Borner says his graduates earn more than enough to recoup their tuition, though he questions the need for such a lengthy program. “Barbering is not rocket science,” he said. “I don’t think it takes 1,500 hours to learn. But that’s what the state says.”
Licensing laws are mostly an anticompetitive tool imposed on new entrants by those already in the industry. Excessive educational requirements as those described in the above Journal excerpt raise the price of entry into an industry, making it harder for would-be entrepreneurs to get their business off the ground. This lowers competition, enabling licensed occupations to charge their customers higher prices than they otherwise could. Low-budget entrepreneurs and customers are understandably hit hardest by these rules.
“Occupations prefer to be licensed because they can restrict competition and obtain higher wages,” said Morris Kleiner, a labor professor at the University of Minnesota. “If you go to any statehouse, you’ll see a line of occupations out the door wanting to be licensed.”
Persistently high unemployment and related state budget woes, through reduced tax income and the burdens of unemployment checks, ought to motivate states to review their licensing regulations and cut those that are most burdensome with little benefit to state citizens, except those protected from competition by such rules.
The Institute for Justice (IJ) has some good suggestions, in their 8-part report on how anti-competitive and irrational regulations stifle entrepreneurship in U.S. cities, on what regulations to cut first. When states don’t cut their nonsensical licensing regulations by their own accord, IJ likes to push them with lawsuits. Thanks to IJ, Louisiana florists, operating in the only state to require florists to be licensed, are able to put together Valentine’s floral arrangements today relieved from the most arbitrary and subjective aspects of that state’s licensing scheme.