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This week the John Locke Foundation released the next report in my Carolina Cronyism series — this one on the subject of occupational licensing.

The report, "Guild By Association: N.C.’s Aggressive Occupational Licensing Hurts Job Creation and Raises Consumer Costs," makes the following findings:

  • North Carolina features over 50 occupational licensing boards. The state licenses more occupations than most other states and is one of the more aggressive in licensing jobs for the poor or less educated.
  • At its core, an occupational license is a grant of permission from the government to an individual to enter the field of work he desires.
  • The supposed purpose for occupational licensing is ensuring safety and quality. In practice, its motivation is protecting current members of a profession from competition and thereby making them wealthier. Its costs are dispersed among consumers and would-be professionals blocked from the field.
  • Economists studying occupational licensing generally find it restricts the supply of labor and drives up the price of labor and services. They find similarity between licensure and medieval guilds.
  • Licensing has grown tremendously. In the 1950s, nearly one in 20 workers needed a government license; now that number is approaching one in three.
  • Research is mixed over whether licensing actually has a positive effect on safety or quality. States differ greatly over which occupations even need state licensure.
  • Without state licensure, who would ensure safety and quality? Private providers of reviews and certification, internet sites and consumer applications, social media, and competitors and market forces. The government would still enforce safety and quality through the courts system.

In conclusion, I recommend six ways to de-guild North Carolina’s economy:

  1. Reduce the number of licensing boards and licensed job categories
  2. Reform and merge licensing boards
  3. Encourage reciprocity
  4. Apply a principle of ‘least-cost state’
  5. Enact sunset provisions with periodic review for current licensing boards
  6. Enact sunrise provisions for any future licensing board

As if on cue, actions by the North Carolina Medical Board and the North Carolina Locksmith Licensing Board buttressed some of my criticisms. The medical board is willing to turn a blind eye to members accused of deliberately endangering medical test subjects’ health without their knowledge by "park[ing] a diesel truck next to a UNC building and pump[ing] the diesel exhaust into a glass chamber, where patients unknowingly inhaled the lethal fumes for up to two hours." The locksmith board wants to outlaw even the possession of locksmithing tools by unlicensed persons, triple the cost of the license, and change the law to prevent even policemen and fire fighters from unlocking doors unless there is a life-threatening emergency.

In other news: Did the ban on texting while driving make N.C. roads less safe?

The Texas legislature is preparing to debate a no-texting-while-driving bill, which would probably be similar to North Carolina’s ban passed in 2009, but which Gov. Rick Perry vetoed the last session. A Texas blogger wonders if Gov. Perry’s veto actually kept Texas roads safer than they would have been under the texting-while-driving ban, pointing to this finding in 2010 by the Insurance Institute for Highway Safety:

"Texting bans haven’t reduced crashes at all. In a perverse twist, crashes increased in 3 of the 4 states we studied after bans were enacted. It’s an indication that texting bans might even increase the risk of texting for drivers who continue to do so despite the laws," says Adrian Lund, president of both [the Highway Loss Data Institute] and the Insurance Institute for Highway Safety.

How could this be?

IIHS suggested that drivers, particularly young people, may be "moving their phones down and out of sight when they texted, in recognition that what they were doing was illegal. This could exacerbate the risk of texting by taking drivers’ eyes further from the road and for a longer time." Indeed, "Using a driving simulator, researchers at the University of Glasgow found a sharp decrease in crash likelihood when participants switched from head-down to head-up displays. This suggests that it might be more hazardous for a driver to text from a device that’s hidden from view on the lap or vehicle seat."

This result is a cautionary tale for lawmakers to be aware of the potential for negative unintended consequences. I encountered several examples in studying occupational licensing.

As consumers sought ways around the higher prices brought about by licensure, more chose black-market providers, fell for scams, tried to fix a problem themselves, or ignored a problem altogether, such that the overall effect of licensure on the safety of the work received could even be negative. One study found "higher rates of blindness in states with stricter optometry licensing laws, higher incidence of poor dental hygiene in states with tougher dental licensing laws, and greater electrocution rates in states with stricter electrical licensing laws."

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