Professional Licensing and the Labour Market: Not That Tightly Braided

I’m usually a fan of the New York Times Magazine column “It’s The Economy”, some previous installments of which I’ve written about before. I like this column because it uses real life examples to demonstrate that economic and organizational  theories don’t just live in some isolated ivory tower, but are actually very useful in explaining why things in the real world work the way they do. That being said, however, this week’s column on licensing of professional work is really disappointing and superficial.

My doctoral dissertation examined, among other things, the effects that formal professionalization might have on the practice of a specific occupation (journalism), so I was quite interested on the column’s discussion of a recent situation involving professional regulation. Briefly, a woman in Utah offering African-style hair braiding was reported to the state regulatory body for practicing cosmetology without a license. Since other states’ regulations allow this type of limited practice if the practitioner passes a “hygiene test” and pays a fee, she applied for an exemption – but was turned down. Now a libertarian legal group (the article’s description, not mine) is challenging the refusal, as well as filing lawsuits on behalf of others facing similar situations in other states.

The subhead to the article – “Millions of Americans need to change careers. Why should it be so hard?”-  is a pretty good clue to where the article goes from this single example. Jacob Goldstein, the author, says that it makes him feel safer to have professions like commercial aviation strictly regulated. But he uses the hair-braiding example, along with the increase in America’s numbers of licensed professions since 1930, as an excuse to slam most professional regulation as driven by occupational self-interest and unduly restrictive, and as contributing to unemployment by restricting the occupational choices for workers.

This argument really annoys me. I have friends whose careers have been impeded by regulatory policies that unduly exclude qualified and experienced practitioners, especially those emigrating from other countries. And, contrary to the article’s implicit assumption that these restrictions are a North American labour market problem, I could also provide some examples of professionals licensed in North America encountering restrictive regulations when trying to practice in other countries. I would never argue that these kinds of licensing regulations  are fair, or that they end up benefiting the labour market in the long run. But the fact that some professions apply their licensing standards unequally or selectively doesn’t negate the fundamental reasons to have professional licensing. In these situations, it’s the application of the policies that is the problem, not the regulation of the profession as a whole.

Does someone need to be professionally licensed to create this? (credit: hawaiikawaii.net)

In my opinion, the hair-braiding case doesn’t even begin to prove that the system of professional regulation is fundamentally flawed and is hampering occupational mobility.  Professional licensing exists for a reason – to ensure that professionals are trained to do their jobs safely and correctly and will deliver a reliable service or product to an acceptable standard. And while some of the increase in the number of licensed occupations likely has more to do with marketing and perceived legitimacy than it does with a genuine need for occupational regulation, I’m not as convinced as Goldstein that we should return to the days when anyone could hang a shingle declaring themselves to be anything, with minimal or no training.

Goldstein cites landscape gardening and athletic training as examples of professions that unemployed workers will look to for “opportunities” for retraining, but which they might not be able to enter because of licensing. But…landscape gardeners use industrial tools and hard physical labour, and work in potentially dangerous settings. Athletic trainers need to understand anatomy and biomechanics, and to know what exercises are appropriate and safe for their clients. Given those realities, I’d say, yes, there should be licensing in these professions.

If someone wants to switch careers, what is wrong with expecting that they be trained and tested to ensure they perform well in the career they want to enter? Maybe Utah’s regulations for practicing cosmetology need to be more flexible to accommodate various types of professional practice, and maybe other licensed occupations also need to consider different ways of successfully providing the same service or making the same product. Nevertheless, it makes very little sense to argue, as Goldstein does, that “laid-off workers” are facing “barriers” to new jobs because of unduly restrictive licensing requirements. The North American labour market has a lot bigger problems than exclusionary effects of professional regulation. Framing professional regulation as a “barrier” to “millions” of Americans being unable to pursue their dreams is simplistic at best.

It’s representative of the weak analysis throughout this article that, to make his point about the alleged excess of unnecessary professional licensing, Goldstein chooses to contrast the professional of commercial pilot with the profession of cosmetologist. I won’t go so far as to say this comparison is sexist, given the gender dominance in each of these professions, but I do take issue with Goldstein’s implication that piloting should be regulated because it’s difficult, but anyone can style hair so cosmetology doesn’t need licensing. Admittedly the damage from an airline pilot’s mistake is potentially far greater than the damage from a cosmetologist’s mistake. But that comparison trivializes the skill and aesthetic judgement involved in cosmetology, and ignores the reality that cosmetologists also do stressful and dangerous work. Their daily tasks involve handling potentially dangerous tools (e.g. sharp blades, hot dryers) and potentially toxic chemical substances (e,g. hair dyes, nail formulas). Professional licensing ensures that they know how to work correctly and safely, and gives them a means to provide a safer work environment for themselves and their clients. It’s disappointing that someone analyzing labour market issues hasn’t thought more carefully about these realities.

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