There are a lot of issues that divide friends and neighbors in the United States. Occupational licensing reform should not be one of them.
President Joe Biden’s recent executive order is a case in point. The order calls upon the Federal Trade Commission to issue new rules that eliminate occupational licensing restrictions that “unfairly limit worker mobility.” The Biden administration is only the latest to acknowledge the costs associated with occupational licensing. Both the previous Trump and Obama administrations took similar actions.
Occupational licensing laws are passed with good intentions by policymakers: trying to set minimum quality standards for professional services. But licensing has clearly spread over the years to professions where it is very hard to justify. Barbers and hair braiders are clear examples; there are better ways of regulating the market without onerous licensing.
It simply doesn’t make sense for state bureaucrats to decide what constitutes a good haircut.
Although the FTC has played an important role in shedding light on the anticompetitive effects of occupational licensing, even bringing a critical case against the North Carolina dental board to the Supreme Court, the onus for occupational licensing reform will largely continue to fall upon individual states. At the very least, the FTC can provide best practices to states, and it won’t have to reinvent the wheel.
