Occupational Licensing Versus the American Dream

Imagine: You’re one of the 6.1 million unemployed Americans. Try as you might, you can’t find a job. But you’ve always been great at something—cutting hair, giving manicures, or maybe hanging drywall—so great, in fact, that you reckon you could actually make some real money doing it. What’s the first thing you do?

If your answer was something other than, “Find out how to obtain the state’s permission,” you’re in for a surprise.

A shocking amount of occupations require workers to seek permission from the government before they can legally practice. This includes not just the obvious, like doctors and lawyers, whose services, if rendered inadequately, might do consumers life-threatening harm, but also barbers, auctioneers, locksmiths, and interior designers.

This phenomenon is known as occupational licensing. State governments set up barriers to entry for certain occupations, ostensibly to the benefit and protection of consumers. They range from the onerous—years of education and thousands of dollars in fees—to trivialities like registering in a government database. At their most extreme, such regulations make work without a permit illegal.

As the United States transitioned from a manufacturing to a service-based economy, occupational licensing filled the “rules void” left by the ebb of labor unions. In the past six decades, the share of jobs requiring some form of license has soared, going from five percent in the 1950s to around 30 percent today. Put another way: over a quarter of today’s workforce requires government permission to earn a living.

There’s little proof that licensing does what it’s supposed to. For one, the potential impact to public safety seems wholly incidental to the burden of compliance for a given job. In most states, it takes 12 times as long to become a licensed barber as an EMT. In a 2015 Brookings Institution paper, University of Minnesota Professor Morris Kleiner, who has written extensively on the subject, states: “…economic studies have demonstrated far more cases where occupational licensing has reduced employment and increased prices and wages of licensed workers than where it has improved the quality and safety of services.”

Ironically, the presence of strict licensing regulations also seems to encourage consumers to seek lower-quality services—sometimes at great personal risk. When prices are high or labor is scarce, consumers take a DIY approach or forego services entirely. A 1981 study on the effects of occupational licensing found evidence for this in the form of a negative correlation between electricians per capita and accidental electrocutions.

A less morbid, but perhaps more salient, observation is that licensing often creates burdens that are unequally borne. Licensing requirements make it difficult for immigrants to work. In many states, anyone with a criminal conviction can be outright denied one, regardless of the conviction’s relevance to their aspirations. These policies, coupled with the potential costs of money and time, can make it harder for poorer people, in particular, to find work.

But surely, you might say, there must be some benefit to licensing. And technically, you’d be right.

Excessive licensing requirements are a huge boon to licensed workers. They restrict the supply of available labor in an occupation, limiting competition and in some cases raising wages. There’s little doubt that occupational licensing, often the result of industry lobbying, functions mainly as a form of protectionism. A 1975 Department of Labor study found a positive correlation between the rates of unemployment and failures on licensing exams.

Yet even licensed workers can’t escape the insanity unscathed. Because licenses don’t transfer from state to state; workers whose livelihoods depend on having a license face limited mobility, which ultimately hurts their earning potential.

Though licensure reform is typically thought of as a libertarian fascination—the libertarian-leaning law firm Institute for Justice literally owns occupationallicensing.com—it also has the attention of more mainstream political thinkers. The Obama Administration released a report in 2015 outlining suggestions on how the states might ease the burden of occupational licensing, and in January of this year, Labor Secretary Alexander Acosta made a similar call for reform.

Thankfully, there seems to be some real momentum on this issue. According to the Institute for Justice, 15 states have reformed licensing laws to “make it easier for ex-offenders to work in state-licensed fields” since 2015. Louisiana and Nebraska both made some big changes this year as well. That’s a great start, but there’s still much work to be done.

This article originally appeared on Merion West

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A Political Future for Libertarians? Not Likely.

When it was suggested I do a piece about the future of the Libertarian Party, I had to laugh. Though I’ve been voting Libertarian since before Gary Johnson could find Aleppo on a map, I’ve never really had an interest in Libertarian Party politics.

Sure, the idea is appealing on a lot of levels. Being of the libertarian persuasion often leaves you feeling frustrated with politics, especially politicians. It’s tempting to watch the approval ratings of Democrats and Republicans trend downward and convince yourself the revolution is nigh.

But if I had to guess, the party will remain on the periphery of American political life, despite a relatively strong showing in the 2016 Presidential election. A large part of this – no fault of the Libertarian party – is due to anti-competitive behavior and regulation in the industry of politics. But a substantial amount of blame can be attributed to the simple and sobering fact that the type of government and society envisioned by hardcore Libertarians – the type that join the party – is truly unappealing to most of America.

Unless public opinion radically shifts, it feels like the Libertarian Party will mainly continue to offer voters a symbolic choice. Don’t get me wrong: I’m happy to have that choice, and it really would be nice to see people who genuinely value individual freedom elected to public office. But political realities being what they are, I’m going to hold off on exchanging my dollars for gold and continue paying my income taxes.

So that’s the bad news for libertarians. Here’s the good news: the cause of advancing human liberty isn’t dependent on a niche political party. The goal of libertarianism as a philosophy – the preservation and expansion of individual liberties – has no partisan allegiance. Victory for the Libertarian Party is (thankfully) not requisite for libertarians to get more of what they want.

Advancing their agenda has, for libertarians, proved to be more a question of winning minds than elections. While “capital-L” Libertarians remain on the political margins, aspects of libertarian thought are appreciated by people of all political persuasions and often receive appeal for support. Although no Libertarian Party member has ever held a seat in Congress, moved into a governor’s mansion, or garnered more than four percent of the national vote, many long-held libertarian ideas have enjoyed incredible success, and others are still gaining momentum.

Same-sex marriage is now the law of the land, as has been interracial marriage. Support for legalizing marijuana is at an all-time high (pun intended), and ending the larger ‘war on drugs’ is an idea gaining currency, not only in the US but worldwide. The draft is a thing of the past; the public is growing wary and weary of interventionist foreign policy. A plan to liberalize our immigration system, though stuck in legislative limbo, remains a priority for most Americans, and the United States remains a low-tax nation among countries in the developed world, especially when it comes to individual tax rates.

And not all the good news comes from the realm of politics. Americans have maintained and expanded on a culture of philanthropy, per-capita giving having tripled since the mid-1950s. The rise of social media and the internet has made it easier than ever for people to exchange ideas. Technology of all sorts has lowered prices for consumers and helped people live more productive lives. Even space exploration – until recently exclusively the purview of governments – is now within private reach.

None of this was or will be passed with legislation written or signed into law by a Libertarian politician. But that’s not what really matters. What really matters is that people are freer today to live the kinds of lives they want, peacefully, and without fear of persecution. Yes, there is still much that might be improved, at home and certainly abroad. But in a lot of ways, libertarians can rest happily knowing that their ideas are winning, even if their candidates are not.

This article originally appeared on Merion West.

Political Polarization Isn’t All Terrible

Political polarization, it is said, is tearing this country apart. As politics creeps into everything, it can seem like America is increasingly becoming a battleground for liberals and conservatives, while a shrinking moderate majority suffers the collateral damage.

Witness the left-wing condemnation of Taylor Swift’s insufficiently anti-Trump stance or the right-wing’s sudden loathing for the NFL and it will seem childish. Consider that 45% of Republicans and 41% of Democrats now believe the other party is a danger to the country and it appears nothing short of malignant. Recall the recent politically motivated shooting of Republican legislators in June, and you will conclude it is downright terminal.

But in many ways, polarization is the unhappy consequence of the increased choice enjoyed by media consumers and voters — things that most would probably consider to be not only good, but essential to a healthy democracy. Like many unpopular-but-ubiquitous phenomena, polarization serves many important functions. First, and probably most importantly, polarization helps simplify an otherwise complicated question: for whom should we vote?

Often, votes are cast from a position economists refer to as rational ignorance – a situation in which the costs of educating oneself (in this case about the various candidates and issues) outweigh the benefits. In other words, since a single vote has next to no impact in a high-turnout election, most voters will rationally avoid spending too much energy diving into the nuts and bolts of candidates’ proposals. With distinct parties, one can vote for the candidate of one party or the other and, even without familiarizing himself with every position held by that candidate, have a reasonably good idea of what the person he’s voting for believes.

Voters, thus, know more or less what they’re getting themselves into when they head to the polls. Want a bigger government? Vote Democrat. Lower taxes? Vote Republican. In a completely unpolarized political landscape, the barriers to informed voting would be even larger than they are now. Voters might get discouraged and abstain or vote based on something other than policy.

Speaking of voter engagement, political polarization is theorized to help with that, too. Recent research has shown that high levels of polarization, coupled with the presence of few political parties, encourage more people to vote. Findings from the Pew Center’s 2014  study of polarization in the American public further support this conclusion: individuals at the edges of the political spectrum are shown to be most likely to say they always vote. Animus toward the opposite party appears to be a major motivating factor for such voters.

This increased passion seems to extend beyond voting as well. Voters with consistent liberal or conservative views are about twice as likely as those with mixed views to engage in  various forms of political activism. As polarization has increased, so too has the percentage of voters saying they’ve spoken to others trying to persuade them to vote for one candidate or another, according to data collected by the  American National Election Studies. However strong one’s distaste for the current tone of civil discourse, its presence is better than the alternative.

A final positive consequence of polarization is that it slows down the government. If you are a partisan with an agenda and opportunity, you probably don’t think that’s such a great thing: a year ago, liberals were heaping opprobrium upon a Republican Congress for obstructionism; now the president is leveling the  same accusation against Democrats. But once your party’s out of power, you might be a little more sympathetic to the idea that governments should move with deliberation and humility rather than speed and zeal.

Of course there really are things that require governments to move quickly and with decisiveness, and when polarization impedes that process, that can be bad. But through opposition and gridlock, minority party members perform the valuable public service of making sure the governing party does not do too much too fast. The public only has so many meaningful opportunities for input, and having trillion-dollar commitments met with some resistance until voters get to weigh in again isn’t the worst thing in the world.

All this isn’t to say that political polarization is a fundamentally good thing. It is very often tiring, unproductive, and petulant. As a self-styled moderate and small-L libertarian, I can attest to my personal dissatisfaction with the candidates, policies, and discourse produced by our two-party system. There are things we can, and in my opinion maybe should, do to foster a political system less inclined to bipolarity. But in the short-term, we have the politics we have, and it’s worth realizing that polarization is not only a consequence of but also a conduit for many of the things that are good about our system of government.

This article originally appeared on Merion West