Tuesday, May 22, 2012

Absurd Licensing Requirements Hurt Growth Prospects

Licensing requirements, by contrast, are by far the best statistical predictor of business-friendliness, for those subjected to them. And unlike taxes or environmental rules, these have spread like kudzu, with little scrutiny and often scant policy rationale.
A recent comprehensive survey of state licensing practices by the Institute for Justice*reveals little consistency or coherent purpose behind most licensing. Nevada*, Louisiana, Florida, and the District of Columbia, for example, all require aspiring interior designers to undergo 2,190 hours of training and apprenticeship and pass an exam before practicing. In the other 47 states, meanwhile, there’s no legal training requirement. My friends and co-workers living in D.C.’s Virginia and Maryland suburbs appear to get on fine with unlicensed interior decorators, and all across America, amateurs have decorated their own homes without imperiling public safety.
Read it at The Slate
Licensed To Decorate: Taxes don?t kill entrepreneurship. Crazy licensing rules do.
By Matthew Yglesias
(h/t Alex Tabarrok at Marginal Revolution)

For those practicing a profession that requires licensing, the benefits of reduced competition and higher salaries are readily visible. Individuals within the profession therefore have every reason to favor stricter licensing requirements. The larger public, however, must accept the negative consequences stemming from these policies of higher prices and less choice. Further, licensing requirements prevent individuals without the means to pursue higher education from possibly attaining numerous jobs.

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