This week, Virginia Gov. Robert F. McDonnell announced his plan to eliminate state regulations governing three occupations, including hair braiding and interior design. A reasonable person can have only one reaction to this news: surprise and shock that the Virginia state government was regulating hair braiders and interior designers in the first place. But Virginia does regulate these occupations, and it is hardly alone: Nationwide, we are in the midst of an unprecedented sea of occupational-licensing requirements. In the 1950s, only about 1 in 20 Americans needed to get special permission from the government to do his job. Today that number is about 1 in 3.
It may be easy to chuckle at the idea of stalwart Virginia regulators protecting us from errant throw pillows or bad hairstyles, but for the people affected by these laws, they are no laughing matter. Studies (including several by my organization, the Institute for Justice) show that occupational licensing laws create real barriers to entry, particularly for poor people or older people seeking to enter a second career. All too often, the laws impose these costs in exchange for no real benefit in protecting public health or safety. In the meantime, entrepreneurs’ economic liberty - their basic right to earn a living - gets trampled and consumers are left with fewer options at higher prices. Almost everybody loses.
If laws like this are such a bad idea, how do they get on the books in the first place? Easy: Almost everybody loses, except entrenched businesses that want government-imposed protection from competition. Industry insiders routinely persuade legislators to pass licensing laws like these as a way of squelching competition and keeping prices high. Virginia’s interior-design regulations were not written because someone was injured by an ugly duvet cover. They were written after a coordinated lobbying campaign by a group called the American Society of Interior Designers (ASID), which tries to persuade state legislatures to impose licensing laws preventing new entrepreneurs from competing with ASID’s members. We at the Institute for Justice have extensively documented this campaign - and our successful efforts to roll it back.
It is all too common for these sorts of laws to be passed in an anti-competitive and self-serving frenzy stoked by heavy industry pressure - and it is all too rare for a legislature to repeal any of them. That is why the proportion of workers who need a government license has quintupled over the past 50 years, and it’s also why Mr. McDonnell’s effort to remove some of these barriers to entry is worth applauding.
But even as we applaud, we should not kid ourselves about the scope of the problem occupational licensing poses to would-be entrepreneurs and, by extension, would-be consumers like the rest of us. Even under the governor’s proposal, Virginia will continue to regulate the occupations of people from estheticians to wax technicians, who must take an exam not only in the “practice” of waxing someone’s legs, but also in the “theory.” More important, Virginia is just one state of 50: Even if interior designers are free from anti-competitive legislation there, they will remain subject to onerous licensing requirements in Washington, D.C., just as florists (yes, florists) will be in Louisiana. The list goes on and on.
Any government official who proposes rolling back unnecessary occupational-licensing laws deserves congratulations, just as an official who does the opposite deserves shame. Eliminating three unnecessary licensing laws will be a great victory for economic liberty in Virginia. But if we hope to restore meaningful respect for the right to earn an honest living, this must be only the beginning for the Old Dominion and the rest of our nation.
Robert McNamara is an attorney for the Institute for Justice (ij.org).