by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Yesterday I blogged about a Vermont-licensed funeral director blocked from getting a license in North Carolina on the grounds that Vermont’s licensing requirements aren’t considered “substantially similar” to North Carolina’s. I pointed out that an effect of this decision is to deprive bereaved consumers of a wider range of cost and service options.
What if bereaved families, rather than a Raleigh bureaucracy, could decide whether their choice in funeral director has had enough training to suit their needs? What if state law allowed North Carolina families to choose even a funeral director from Vermont, if they provided evidence that they knew going in that the funeral director wasn’t licensed in North Carolina?
Under its provisions, a service professional in a field licensed within the state would retain the right to earn a living even without an occupational license by providing consumers with a non-license disclosure prior to agreeing to do work. Consumers could then knowingly choose someone whose professional credentials in a state-licensed profession would include other things, including another state’s license, but not a state license.
So, for example, a grieving family in North Carolina could choose a Vermont-licensed funeral director if the funeral director had fully informed them of his out-of-state credential and lack of North Carolina license.
The director would be able to give the family a non-license disclosure form to sign prior to providing his services, informing them that he lacks a North Carolina license while stating his other professional credentials and training.
After all, one of the service quality issues that occupational licensing is supposed to solve is a knowledge imbalance. It does so, however, by imposing a choice imbalance — removing consumers’ range of preferences for service professionals’ training, education, experience, and skill levels in favor of the licensing board’s one-size-fits-all dictate. (Not to be overlooked: the amount of expertise a consumer may seek in a service professional could also depend on the size and importance of the job.)
The non-license disclosure would attest to the fact that the consumer was informed about what professional qualifications he was choosing. The professional must be able to produce a disclosure signed by both parties if asked by authorities, and it would provide a positive defense to any licensing regulation.
It would not overturn state licensing regulations. In fact, it would provide a market test of them. If consumers found them preferable, they would demonstrate it by their choices; that is, through revealed preference. On the other hand, it could provide evidence that consumers don’t find a particular license that necessary at all.