You can always spot the person who is afraid to compete. They spend their time trying to eliminate the competition rather than improving their product or skills.
Here’s a recent example involving taxicab operators in Milwaukee who have tried to prevent the city from lifting the arbitrary cap on taxi licenses. The Institute for Justice stepped in and is working the case. Here is part of IJ’s news release, which was posted to the group’s website last week.
Milwaukee, Wis.— Today federal district judge Lynn Adelman ruled that the city of Milwaukee’s recent decision to lift the 22-year old cap on the number of taxicabs could go forward as planned.
“The owner’s lawsuit was always a last-ditch attempt to preserve their monopoly in Milwaukee,” said Institute for Justice Attorney Anthony Sanders. “The owners’ eleventh hour attempt to keep their cartel in place has failed. With today’s ruling, we’re one step closer to bringing the city’s public transportation system into the twenty-first century.”
The judge denied an attempt by some existing taxi owners, including the biggest, Joe Sanfelippo Cabs, Inc., to stop the city from issuing new licenses. The judge pointed to the prior ruling, on April 16, 2013, by Judge Jane Carroll of the Milwaukee County Circuit Court declaring the former cap to be unconstitutional under the Wisconsin Constitution, as a sufficient justification for the city liberating its drivers and consumers from the cap.
In his analysis Judge Adelman also found that it would be against the public interest to prevent the city from issuing more taxicab permits. He stated “prior to the new ordinance, there was a substantial demand for taxicab permits which were capped at a number lower than in 1992. It is not in the public interest for qualified individuals who seek such permits not to be able to obtain them.”
The same dynamic is at play amid North Carolina’s web of licensing rules and boards. JLF’s Jon Sanders has written extensively about the use of occupational licensing to keep competitors out of the way. Here’s some of what Sanders wrote in a report issued in 2013.
North Carolina features more than 50 occupational licensing boards, Sanders said. “The state licenses more occupations than most other states,” he said. “A recent report ranked North Carolina in a tie with Massachusetts at No. 15 in the nation for most licensed job categories at 154. Among neighboring states, only Tennessee licenses more. Virginia licenses half as many jobs as North Carolina, and crossing the border from North to South Carolina reduces licensed occupations by two-thirds.”
Researchers also find that North Carolina is “one of the more aggressive states” in licensing occupations that often employ the poor or less educated, Sanders said. “This state licenses 48 of 102 lower-income occupations highlighted in a recent study,” he said. “Such occupations are ideal entry points into the job market, and their importance to a state’s economy is not insignificant.”
An occupational license is a “grant of permission” from the government to an individual to enter the field of work he desires, Sanders explained. The supposed purpose is to ensure safety and quality. “Research is mixed over whether licensing actually has a positive effect on safety or quality.”
“In practice, occupational licensing tends to be motivated more to protect current members of a profession from competition and thereby make them wealthier,” Sanders added. “One study suggests licensing boosts earnings for current practitioners by 15 percent. In higher-wage licensed occupations, the wage premium can reach as high as 30 percent. Instead of being a case of the state versus the professionals, licensing actually helps the two sides work in concert against the interests of new competitors and consumers.”
