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The Guild-ed Age
Will California Lead the Way on Licensing?

One of the more insidious ways that insiders with political power have rigged the economy against less-skilled workers over the past generation is by imposing licensing requirements for working class professions, restricting the job supply, raising prices, and squelching competition. As Sen. Mike Lee noted in an important op-ed last month, “security guards, florists, barbers, massage therapists, interior decorators, manicurists, hair stylists, personal trainers, tree trimmers and auctioneers work in just some of the many, many professions that state legislatures have seen fit to cartelize.” So it’s encouraging to see that the largest state in the union is mulling over rolling them back. Reason reports:

In an election year, it’s hard to imagine any substantive issue transcending the din of partisan bickering and resulting in meaningful proposals embraced by members of both parties. Yet such an issue is emerging in California. Many Democrats and Republicans are recognizing the role that overly restrictive “occupational-licensing laws” play in limiting opportunities for the poor, ex-convicts and veterans.

… California’s Little Hoover Commission, an independent oversight agency, recently held a hearing in Sacramento to evaluate the situation. It eventually will make some recommendations to the Legislature. Panelists pointed to the myriad inconsistencies and counterproductive elements in California’s array of occupational-licensing laws.

To be sure, amending these laws so that they work in the interests of workers and consumers—rather than a coterie of established insiders—will be an uphill battle. The organized guilds protected by licensing laws (think: dentists who don’t want one of their services threatened by less-credentialed teeth whiteners) will fight to keep their racket in place. But if the legislature can tame the guilds in deep-blue, interest-group dominated California, then there is hope for similar efforts in states across the country. We’ll be watching.

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