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Freedom for Florists
An Attack on the Blue Model…From the Left

President Obama has launched an initiative to focus more pressure on occupational licensing at state and local levels. The Administration’s new budget plan includes $15 million dollars set aside for states to investigate whether their licensing laws are good policy. As Jonathan Chait at New York Magazine argues, that budget item is “numerically trivial but philosophically important”:

State governments, with little public attention or debate, have spun a vast web of red tape that bars entry into working-class professions. Jobs like florists, manicurists, barbers, and on and on, impose unnecessarily burdensome restrictions on those who can practice the trade, closing off potential avenues for upward mobility. These restrictions have no policy rationale; they exist because incumbents in those fields have an interest in keeping out competition.

Chait is right. According to the Economist, in 1950s only 5 percent of the workforce needed state licenses to work. Today, 35 percent do. Wages rise on average 18 percent for workers in fields that require licenses, but others lose out. This is a classic blue model regulation, in which guilds inflate wages by restricting competition through government regulation.

We are glad to see the Obama Administration start to address this barrier to economic growth and entrepreneurship, and its willingness to do so raises an important point about the blue model. The blue model debate often has partisan overtones, with Democrats cast as the protectors of the union of government and business that persisted throughout the 20th century and Republicans as its challengers. Depending on which aspect of the blue model system is at issue, however, it can have critics and defenders on both sides of the aisle. That poses unique challenges to really moving past it, but it also means you can see occasional moments of bipartisan opposition like the kind that appears to be coalescing around cutting through licensing restrictions. More of this, please.

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  • Boritz

    You remember that scene in Goldfinger where the woman asks James Bond what he does and he says he’s a licensed trouble shooter? That was awesome.

  • Kevin

    Good for him. One area in which the Carter administration shone (or at least was not a complete disaster) was deregulation. Given the legislative stalemate Obama is likely to face on many issues dear to him this is one place he can shore up his legacy – as either in finding cross partisan allies or shining a light on the iniquities and absurdities of the current system. By design the President is supposed to be better insulated from special interests and speak for the broader interest , which is certainly something licensing deregulation would promote.

  • FriendlyGoat

    1) “Blue Model” is people forming unions for the purpose of getting employers to raise wages, benefits and working conditions in both the public and private sectors. Legislators have imposed licensing on many occupations for reasons not necessarily associated with anything “blue”. We license contractors, attorneys and CPAs to hold them responsible for quality work and outcomes. We license insurance, real estate and securities brokers to assure they know how to behave ethically. We license liquor servers in order to prevent them from over-serving or serving underage patrons. We license food workers in some places to force them through a few hours of food-handling class for food safety reasons. We license casino workers to keep organized crime out. We license teachers so mostly-right-wing people can harass and threaten them. We license medical workers in order to impose credentialing conditions. AND, as noted in the article, we license some professions at the request of pre-existing workers in those fields—-to limit competition.
    Not all of these things are “blue model” by any stretch.

    2) There is no real reason to believe Republicans will applaud Obama for proposing to study this—-because of concerns about “states’ rights”, because some right-wingers like licensing requirements to lessen competition on big business coming from small business, because right-wingers do not like government people studying business issues, and because of Obama’s name on the proposal.

    • Clovis

      “We license food workers in some places to force them through a few hours of food-handling class for food safety reasons. ”

      What a racket that is. Essentially paying somebody $20 so I can watch an online video that tells me to leave fish and poultry properly stored and to wash my hands. The requirement is made a complete mockery of by ridiculous ads from companies that sell the locally mandated food handlers license. “Quick and easy”, “No test required”, “Get your license in minutes”. What a joke. Is the Health Dept just seeking revenue rent? Food handling and the restaurant business has a funny way of self-regulating. If somebody serves food that continually makes patrons or employees ill, there won’t be any customers.

      • FriendlyGoat

        I’m for putting that one up for thorough discussion, but I “bet” insurers of restaurants never let it go away. It’s there to “prove” the appearance of prudence in advance.

        • Government Drone

          I agree, in that at least the restaurant (or its lawyers) can say “we trained the waiter to wash his hands, so it’s HIS liability!”. Even in the absence of law, liability insurance can require a lot of hoops to jump through.

    • qet

      It certainly is the blue model. Blue/red in this context is not regulation/no regulation but more regulation/less regulation. Holmes said that the life of the law is not logic, but experience, and he might as well have said just life. Objecting to florist and barber regulations does not require anyone to stay on the logic train all the way back to the legendary state of nature. The red model recognizes implicitly a lower bound for a licensed, regulated society. It may not be able to articulate it or quantify it, but it admits the principle. Blues? No upper bound is allowed in principle. In the blue model, if two aspirin are good, twenty are better.

      So you and every other blue or blue-leaner can articulate a nominal justification for any particular licensing regime. Good for you. But they are not persuasive justifications (and some I would argue are simply untrue, such as your statements about casino worker and bartender licensing). To the degree that people sincerely believe that the overriding goal of all legislation and policy is to “protect us from harm,” they simply evince what Nietzsche described as “our thickly padded humanity, afraid of bumping into a stone.” The whole “free range kids” hoo-hah lately is also an example of this phenomenon. There must be a point at which it is permissible for some articulable harm to be permitted to befall us if we are to retain any sort of dynamism as a society. That principle defines the red model and is missing entirely from the blue.

      As for your cynical, realpolitik assessment of the retail politics of licensing regimes and the contra-Obama motivation (which motivation is a function of party and not of person, I am sure you recall party-motivated opposition to Clinton and Carter proposals as well), I agree completely. In this regard unions and guilds-via-licensure are equivalent, as you hint at. As political parties, the GOP and the Democrats are far more alike than unlike.

      • FriendlyGoat

        It’s completely okay with me if you can get rid of barber and florist regulations in all of the red AND blue states. It would be less okay if your party decides to skip the barbers and florists and focus on eliminating licenses for selling insurance, real estate and securities—–fraud-loaded specialties burdened with those pesky “consumer-protection” regulations.

        We can all just stand aside and wait to see which party is willing to “simplify” what—-and where.

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