by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbor, is a plain violation of this most sacred property. — Adam Smith, The Wealth of Nations, Book X, Part II
This week a subcommittee of the U.S. House of Representatives held a hearing on the effects of occupational licensure. On March 26 the House Subcommittee on Contracting and Workforce examined the issue of “Barriers to Opportunity: Do Occupational Licensing Laws Unfairly Limit Entrepreneurship and Jobs?”
The witness testimony offered deserves a full read by anyone interested in ways government can create opportunities for job creation and economic growth, because removing the thorny undergrowth of licensure would open up to people opportunities artificially blocked.
As discussed in my Spotlight report last year, occupational licensing acts like a return to the medieval guild system, with its cartelization, protection and artificially higher wages for incumbent service providers, artificially higher prices for consumers, many hurdles and expenses keeping out prospective entrants to the field (especially the poorer ones), and various negative unintended consequences putting the lie to their ostensible justifications on the grounds of better overall safety and service quality.
One of the witnesses, Rebecca Haw, an assistant professor of law at Vanderbilt Law School, discussed the cartel-like effects of licensure and the problem of licensing boards being exempt from antitrust actions.
Another witness, Timothy Sandefur of the Pacific Legal Foundation, gave an historical tour of economic liberty and foundational American rejections of guilds, monopolies, government grants of exclusive trade privileges, etc., before discussing later judicial retreats from protecting economic freedom. He explored licensure’s harm to entrepreneurs and consumers and offered several recommendations, chief being calling for new civil rights legislation to protect an individual’s right to earn a living.
On that point, the North Carolina Constitution in Article 1, Section 1, recognizes the right of all persons to “the enjoyment of the fruits of their own labor.” It is, in fact, recognized as a self-evident right.
Perhaps the strength of the phrase “self-evident” is lost nowadays. Here is basically what it means for something to be “self-evident”: it has to be so clearly and blatantly true that if someone bothers saying it out loud as if he’s said something profound, he’s open to being mocked as a “Captain Obvious.”
By extension, curtailing licensing boards ought to be a job for Captain Obvious.
‘The power of one entrepreneur’
Two other witnesses included an interior designer from South Carolina and a hair braider from Mississippi. Patti Morrow, the interior designer, discussed the threat to her second career when, as a resident of New Hampshire, that state’s legislature considered licensing interior designers. Morrow said the bill, HB 881,
would have put not only me, but the overwhelming majority of interior designers in New Hampshire out of business.
But why? What logical reason could there be for putting so many small business entrepreneurs out of business and creating a barrier to entry for anyone wishing to enter the field?
The bill asserted that interior design licensing was necessary to protect the health and safety of the public. But after doing my own extensive research, I found some very important facts:
- There’s not a shred of evidence which would warrant a conclusion that the unregulated practice of interior design places the public in any form of jeopardy.
- 13 state agencies have studied the need for interior design regulation (sunrise and sunset reviews, Federal Trade Commission investigations, etc.) and without exception, all recommended against any type of regulation on the basis that it would add absolutely nothing to protect the public beyond that which is already in place (building inspectors, Certificate of Occupancy requirements, architects/engineers, fire marshals, construction code enforcement officials, consumer affairs actions, etc.).
- According to the Better Business Bureau and other data, since 1907, only 52 lawsuits have been filed against interior designers in the entire country. And nearly every single one of those involved contract disputes, not safety issues.
It seemed to me that monopoly and the denial of free enterprise was the true objective of HB-881.
As a clincher, Morrow noted that when Barack Obama took up residence in the White House as president, and despite the District of Columbia’s full restrictions against practicing interior design without a license, he hired an unlicensed interior designer from California to redesign the living quarters. “I’m sure he did not for one minute think he was placing the health and safety of his little girls in jeopardy,” Morrow said.
Fortunately North Carolina has avoided the folly of state licensure of interior designers. Unfortunately, the same cannot be said about African hair braiding. As discussed in my report linked above, “in 2010 lawmakers decreed that African hair-braiding — something that uses no chemicals and that is typically learned in immigrants’ girlhoods — would require a license, including 300 hours’ worth of costly cosmetology training. The law placed a significant hardship on practitioners, many of whom are poor immigrants from West Africa with little grasp of English.”
A similar licensing structure was faced by the hair braider, whose testimony was arguably the most powerful the committee heard. Melony Armstrong discussed how she and two other braiders, helped by the Institute for Justice, convinced state lawmakers to repeal the classroom mandates, leading to over 800 braiders joining the profession.
As Armstrong stated before the subcommittee,
Every day across Mississippi, hundreds of low-income families are housed because of my advocacy and hard work. But I don’t run a shelter.
They are clothed through what I’ve done. But I don’t run a second-hand clothing store.
They are fed as a direct result of what I have achieved and continue to achieve. But I don’t run a soup kitchen.
I have transformed the lives of literally hundreds of poor women in my state of Mississippi not because I sought out government assistance for them; rather, because I demanded that the government get out of my way so I could provide for myself and for my family, and so other women around me could do likewise in peace, dignity and prosperity.
What I achieved and what each of these women is now achieving across the American Southeast is happening because of one simple fact: We demanded the government respect our economic liberty — the right to earn an honest living in the occupation of our choice free from unnecessary government regulation.
I am an African hairbraider.
And if a lone braider in Tupelo, Miss., could have such a transformative impact helping to change the law to free so many around me to earn an honest living, imagine what could happen across our nation if state and local governments followed that example.
Not every entrepreneur is a Bill Gates or a Henry Ford. Some are and will remain more humble in the scope of their impact. But that doesn’t mean the impact is not significant in the lives of those around them.
Imagine the creative forces that would be unleashed if government respected the rights of other would-be entrepreneurs who want to braid hair, or drive cabs, or sell flowers by the roadside, or pursue any of a hundred or more occupations that would otherwise be easy to pursue if only the government didn’t needlessly stop entrepreneurs from doing so for no better reason than to protect the politically powerful from competition.
Each day, I work to demonstrate the power of one entrepreneur.
Armstrong’s testimony illustrates the truth expressed by U2 singer Bono (and appreciated by Fox News’ John Stossel) — “Aid is just a stopgap. Commerce, entrepreneurial capitalism take more people out of poverty” — and by Nobel Laureates Gary Becker and Milton Friedman (and appreciated by John C. Goodman) — “The greatest beneficiaries of capitalism are those at the bottom of the income ladder.”
By now, that truth should also be firmly in the domain of Captain Obvious.
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