by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
To their credit, Republicans have passed regulatory reform acts in three straight years. That’s important because research has consistently shown a link between burdensome state regulations and negative economic effects. Empirical studies of state regulatory burdens were more likely to find negative economic effects than even studies of state tax burdens.
Those regulatory reforms have been, however, to curtail regulations, cut red tape, and offer more freedom for individuals and business. One aspect of the Regulatory Reform Act of 2014 would — surprisingly — run counter to that effort.
This aspect would require landscape contractors to be licensed. At present the state requires landscape contractors obtain certification from the North Carolina Landscape Contractors’ Registration Board. Initial application costs $75. Applicants must pass an examination ($75 fee), with a license fee and an annual renewal fee also of $75.
The change would create a new licensing board to be styled the North Carolina Landscape Contractors’ Licensing Board. Costs to would-be landscape contractors would be upped as well: the application fee would be $100, the examination fee would go up to $250, and the individual license fee and individual license renewal also going up to $100.
In other words, the costs to new entrants in landscape contracting in North Carolina would double, going from $225 to $450. Such a cost could well be daunting to potential entrants. Even if it isn’t, the state would be taking a bigger cut from would-be workers, and for what purpose?
There is no good reason for North Carolina to restrict the market further for landscape contractors. Regulatory reform of occupational licensure should free the labor market more, not make it harder to enter.
The North Carolina Constitution in Article 1, Section 1, recognizes the self-evident right of all persons to “the enjoyment of the fruits of their own labor.” Real regulatory reform ought to do the same.
Real regulatory reform would instead reduce the number of occupational licensing boards and licensed job categories, as I argued in my Carolina Cronyism report on occupational licensing.
That report explained in detail why licensure was antithetical to economic growth and freedom. Researchers consistently find licensure helps the current members of a licensed field by restricting the supply of competitors, thereby raising their earnings, while it harms consumers and would-be providers. They compare it to the medieval guild system.
Deepening a guild system in North Carolina would be more like regulatory deform than reform.