Occupational licensing may sound like a topic only of interest to eggheads, but not so. Occupational licensing — in which the state requires a person who seeks to practice a certain trade or craft — is, at its core, a way for the industry to fend off competition. JLF’s Jon Sanders has written extensively on this issue.
“In practice, occupational licensing tends to be motivated more to protect current members of a profession from competition and thereby make them wealthier,” Sanders added. “One study suggests licensing boosts earnings for current practitioners by 15 percent. In higher-wage licensed occupations, the wage premium can reach as high as 30 percent. Instead of being a case of the state versus the professionals, licensing actually helps the two sides work in concert against the interests of new competitors and consumers.”
In this Wall Street Journal piece, published late last month, the writer describes a case the U.S. Supreme Court will decide this session.
The case, to be heard at the nation’s highest court in mid-October, started with a dispute over teeth-whitening that erupted between the Federal Trade Commission and the North Carolina Board of Dental Examiners.
The dental board—comprised of six licensed dentists, a hygienist and one consumer member—is accused of improperly thwarting competition while the state wasn’t paying attention. The board issued nearly 50 cease-and-desist letters over the past decade to beauty parlors, spas and other small businesses that offer teeth-whitening services. The letters warned that only licensed dentists can legally provide those treatments.
Will the high court support these anti-competitive regulatory webs?