by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Funeral director is not exactly the kind of enterprise someone is prepared to comparison-shop for, but still, as with other services, the more options, the better for consumers. People are more likely to face a wider range of price and service options if there’s more competition.
But of course, service providers know they won’t be able to charge as much for their services when there’s more competition. That’s why the only consistent research finding about occupational licensing is that it boosts the earnings of people in licensed professions by limiting their competition. (Watch out when special interests get the ear of legislators to curtail their “ruinous competition”!)
How risky would be a funeral presided over by a lesser-licensed funeral director? Carolina Journal’s Lindsay Marchello writes about a funeral director licensed in Vermont who can’t get a license in North Carolina because Vermont’s licensing requirements aren’t considered “substantially similar” to North Carolina’s.
I gave Marchello a broad reaction to the idea:
“Any time North Carolina makes it harder for someone to enter a profession here than in another state, I think it ought to trigger a rethink of our requirements,” Sanders said. “Is Vermont a ‘Wild West’ of funeral directors?”
In my 2013 report on occupational licensing in North Carolina, “Guild By Association,” I argued for adopting what I called the “least-cost state” principle in licensing:
For job categories that continue to be licensed in North Carolina, the boards should examine what other states require of licensees in those jobs and, where another state’s standards are less burdensome on prospective workers(in hours of training, for example, or in licensing fees or in ongoing license renewal), adopt the less burdensome standard.
After all, it’s not just that licensing limits competition and consumer choice, strict license requirements raise costs even higher and limits competition and consumer choice even more.