John Locke Update / Research Brief

Moving from Licensing to Certification, and Let’s Not Stop There

posted on in Law & Regulation, Rights & Regulation
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A bill before the North Carolina General Assembly would let reflexologists practice without needing a license from the state Board of Massage and Bodywork Therapy. Senate Bill 527 would extend that privilege to reflexologists certified by the American Reflexology Certification Board.

It’s a good start. At the same time, however, it could do even more good.

Reflexology, as described by the Mayo Clinic, is “the application of pressure to areas on the feet (or the hands)” to relieve pain or stress and to bring healing to the body. It’s a highly specialized practice. But it happens to fall broadly within the scope of practice of massage and bodywork therapy — enough to require licensing. At the same time, it’s so specialized that it doesn’t even appear on the N.C. Commerce Department’s list of 181 “Occupations Requiring a License in North Carolina.”

Think about that. Can you imagine how many other individual service specializations might be thwarted by occupational licensing boards’ broad interpretation of their scopes of practice? I can’t. The answer would basically depend on entrepreneurial ingenuity and vision.

But I’m reminded that, for example, that North Carolina State Board of Dental Examiners famously lost an antitrust Supreme Court case in 2015. They were trying to shut down teeth whitening services offered by day spas and mall kiosks for not being done by licensed dentists. Hair braiders (another specialization not listed by Commerce) have to be licensed by the N.C. Board of Cosmetic Arts Examiners.

If you’re a consumer wanting your teeth whitened, your hair braided, your hand pain relieved, or some other need met, chances are you’re not interested in whether a particular service is caught up in a turf war with a government licensing board. You might care if that licensing board is making it harder and more expensive to find someone to do the work you need.

This is where it would be good for the state to honor certification instead of requiring licensing. But the same reason why the state shouldn’t require a state license is why the state shouldn’t require certification.

Voluntary certification and consumer choice

If the state doesn’t require licensing, and then didn’t even require a service provider to be certified, who would ensure consumers had access to qualified service professionals?

Fair question. Let’s turn it around for consumer needs where the state doesn’t require licenses or even certification. How do we find good auto mechanics? How do we ensure our household electronics don’t blow up?

Here’s how: voluntary certification. Voluntary? Why would providers seek certification in their field when they don’t have to? Simple: to let searching customers know they have expertise, that they have achieved a certain level of mastery in the field, and basically that they can be trusted.

There are over 300,000 auto mechanics certified by the National Institute for Automotive Service Excellence (ASE). Most household electronics are certified by Underwriters Laboratories. It’s not from government coercion; it’s a voluntary decision to provide consumers a third-party guarantee of quality and trustworthiness.

As I explained in my Spotlight report on voluntary certification:

The certification service and certified professionals work in concert to uphold each other’s reputations. To remain a sought-after seal of approval, the service ensures they bestow it only on worthy professionals. For their certification to have its quality guarantee effect to potential customers, the service pros ensure their actions don’t detract from it.

Furthermore, the certification service is more able to adjust quickly to changing service dynamics, discard insufficient standards, and adopt new ones more reflective of the work needs. Their market survival depends upon getting the standards right. They are not government outfits that can be only statutorily removed.

Service pros letting the consumer know about their credentials is the key for voluntary certification. The state’s interest would be in protecting consumers from people fraudulently claiming the title of “certified” professional.

But this also means letting uncertified professionals give it a go. Using auto mechanics again, sometimes your repair job doesn’t require ASE expertise. Maybe you just need an oil change. Or maybe you know Bob started out as a shade-tree mechanic with an intuitive knack for fixing engines.

The Occupational Licensing Consumer Choice Act

Is there a way to protect consumers, protect certified service professionals, protect other professionals’ right to earn a living, and promote free enterprise? Yes. Voluntary certification with full disclosure.

This is an idea that originated in Texas and has already taken root in New Mexico. Last summer legislators in Texas were presented with model legislation called the “Occupational Licensing Consumer Choice Act.” In October, New Mexico Gov. Susanna Martinez incorporated that reform into a sweeping occupational licensing reform Executive Order.

Under its provisions, service professionals in a field licensed within the state would retain their 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 consumer could choose an unlicensed reflexologist if the reflexologist fully informed him of her other credentials, experience, and lack of North Carolina license.

The reflexologist would be able to give the consumer a Non-License Disclosure Form to sign prior to providing her services, informing him that she lacks a North Carolina license while stating her 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.

Either way, the government has not intruded needlessly upon free enterprise and people’s right to earn a living.

Jon Sanders is an economist studying state regulations, that spreading kudzu of invasive government and unintended consequences. As director of regulatory studies and research editor at the John Locke Foundation, Jon gets in the weeds of all kinds of policy… ...

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