Last week the North Carolina General Assembly undertook the reformation of occupational licensing for landscape and irrigation contractors in Senate Bills 405 and 447. Like all occupational licensing programs, these reforms will harm the state’s lagging economy by increasing the costs of these services, and wasting more tax dollars on an inefficient, ineffective purpose.
To begin with the provisions of Senate Bill 405 require that any individual involved in creating, repairing, or working with an irrigation system gain licensure before contracting for employment. To legally practice, one must pay initial application and examination fees, pay yearly licensing fees and complete 10 hours of educational programming yearly. Secondly, Senate Bill 447 provides similar requirements for landscapers, adding that any applicant must have three years of experience in landscaping or six years of educational training (how does one gain experience if they cannot practice without a license?).
These requirements negatively impact the state of the economy because they raise the costs of these services to consumers. First, prices of licensed individuals will rise to cover the new upfront costs of licensing. Even worse, some individuals practicing without a license will simply stop providing services, making the market less competitive and driving up the costs.
Apart from consumer costs are the costs imposed upon taxpayers. Structurally, these acts raise costs to taxpayers by providing that licensing boards, examination centers, and educational centers, be in existence for each category of licensing. Board members receive both per diem rates and reimbursements for food and travel.
Unfortunately, despite all of the costs, occupational licensing demonstrates no impact upon the services it seeks to improve. According to Morris Kleiner, a professor of economics at the University of Minnesota, occupational licensing has no effect on the quality of services. This means that the legislature is again seeking an inefficient means to an unnecessary end, producing nothing but a more expanded bureaucracy.
