Politics Columns & Blogs

Dan Walters: Licensure of work backfires

Three years ago, then-Assemblywoman Fiona Ma carried a bill to license interior designers, backed by an industry faction.

Why?

Ma and backers of Assembly Bill 2482 claimed it was to protect consumers from unqualified designers, but it was quite evidently aimed at limiting who could offer design services to potential clients – in effect, a state-enforced monopoly.

It wasn’t the first time such a bill was proposed, and although it failed, it probably won’t be the last. Nor is it, by any means, alone.

Over the years, dozens of professions and occupations have come under state licensure, often, like the interior designers, at the behest of those in the professions.

Some regulation speaks for itself – that of doctors, dentists and other medical practitioners, for example. But others provide, at best, marginal protection to consumers and exist mainly to carve out monopoly markets for those who obtain the licenses.

That’s demonstrated by the ceaseless turf battles that the professions wage among themselves over the range of their allowable services – what’s called “scope of practice” in medicine – and the financial arrangements that accompany those services.

A long-running squabble over business relationships within the regulated optical industry, for instance, is a pending issue as the Legislature grinds toward adjournment.

A new report issued by the Obama White House and the Treasury Department surveys state occupational licensing across the nation and concludes that “often the requirements for obtaining a license are not in sync with the skills needed for the job.”

It adds that “there is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines.”

Licensure, the study found, varies widely among the states. Nationwide, about 25 percent of jobs require state licenses, 5 times as many as in the 1950s. And it varies from a low of 12 percent in South Carolina to 33 percent in Iowa, with California near the midpoint at 20.7 percent.

This variance indicates that which occupations are licensed is essentially an arbitrary, and therefore political, matter, rather than a uniform effort to protect consumers.

The California boards that hand out the licenses are typically dominated by licensees themselves, so they have a built-in interest in dampening competition.

Higher costs for consumers are not the only result, as the report also demonstrates.

Arbitrary licensure requirements make it much more difficult for those on the lower rungs of the economic ladder – especially women and ethnic minorities – to climb up.

There’s a lot of palaver in the Capitol about doing something about California’s having nearly a quarter of its population impoverished.

Reforming occupational licensure and making it easier for the poor to climb out of poverty would be one way to alleviate that malady.

  Comments