In 2015, the U.S. Supreme Court found that, without proper state supervision, licensing boards can become unaccountable, self-serving organizations that protect themselves from competition rather than protecting consumers. The court’s opinion noted that when legislatures hold hearings on licensure practices, they are flooded with special interests that give the false impression that additional occupational regulations will only enhance public safety without imposing costs on aspiring workers.
For proof the court was right, look no further than a recent hearing on barber licensing in Nebraska. This fall, the Nebraska Health and Human Services committee held hearings on lowering the licensing requirements for those who want to work in various personal service occupations, including barbers.
I testified in support of lowering Nebraska’s excessive licensing requirements to promote economic opportunity, but other witnesses did not share my view. Besides a representative from the free-market Platte Institute, nearly every other witness wanted to maintain—or even increase—the state’s licensing requirements. And these opponents of reducing red tape? They work as barbers, for the Board of Barber Examiners, or at barbering schools—imagine that.
It’s Cutting Hair, Not Nuclear Science
Nebraska mandates 2,100 hours of education and training to become a licensed barber, which is tied with Iowa’s requirement for the longest training requirement in the nation. These long hours lead to tuition costs of more than $20,000 for completing the education and training. Here Nebraska is an outlier: in the United States, the average required training is close to the 1,500 hours that more than half of states mandate for barber licenses.
The Nebraska hearings also covered a proposal to lower the licensing hours for cosmetologists, another occupation that has the unnecessarily high barrier of 2,100 hours to work in the state. Some witnesses who opposed easing the requirements argued the extra hours were necessary to teach students professional and life skills like how to market their business and open a retirement account. One witness even called for adding extra hours so the schools could have time to teach the importance of voting.
But these witnesses fundamentally misunderstand the purpose of occupational licensing. Voting, building a business plan, and planning for retirement are all worthy ventures. However, the only defensible justification for limiting someone’s ability to work through occupational licensing is to ensure public safety. When I mentioned this point, some responded that I did not understand the skill required to work in their occupation.
But just because an occupation takes skill—as barbering and cosmetology undoubtedly do—does not mean the government should be able to choke entry to an industry with licensing. Besides an outright ban, occupational licensing is the most stringent form of regulation that the government can apply to a profession.
Everything from bonding and registration, to voluntary certification and inspections, allows more consumer choice and work opportunities than licensing. The claim one witness made, that inspections will not work because they “only worry about public safety, not customer service,” misses the point completely. The whole point of licensing is protecting public safety.
Markets Regulate Trades Far Better Than Governments Can
The government should not be in the business of regulating customer service. That is consumers’ job. Consumers are not so naïve and helpless that they need government to ensure their barbers are polite and politically engaged.
Given technological advances and the proliferation of peer-to-peer communications, many types of information about price, quality, and level of service are simply a click away and provided by other consumers or trusted third parties. Consumers have little need for licensing agencies in many sectors of the economy—including barbering and cosmetology—in the age of Google Reviews, Yelp!, and various social media platforms.
Licensing’s extensive time and financial costs make it more difficult for individuals to enter certain professions and earn a living. It is often not worth it for would-be barbers and cosmetologists to invest more than a year and tens of thousands of dollars to complete the required training to work in occupations with median annual earnings of $23,600 and $27,800 in Nebraska, respectively.
As Nebraska’s governor Pete Ricketts, a staunch supporter of occupational licensing reform, said, “Unnecessary licensing restrictions are a barrier to Nebraskans seeking careers in licensed professions, and especially to those who may be looking for a career change or upward mobility.”
Let People Hang Out Their Shingles
The large-scale expansion of occupational licensing creates a financial incentive for established practitioners in a licensed profession to use government to erect further barriers to work. A vicious cycle exists in which the more lawmakers expand licensing, the larger the incentive to turn to government for protection from competition becomes—hence the overwhelming turnout of barbering and cosmetology instructors and school operators at the hearings. After all, these are the folks who stand to lose revenue if the state stops limiting their competition or forcing students to spend more than a year paying for training.
Academic studies show that in most instances, today’s level of occupational licensing is unnecessary to protect public safety. To put it simply, if 43 states can protect their residents while requiring 1,500 hours or less of training for barbers, then there is no public safety reason for Nebraska to tack on an additional 600 hours of instruction.
Also consider this: Nebraska’s mandated training time to become an Emergency Medical Technician is as little as 150 hours. Obviously, barbers and cosmetologists do not pose a greater public safety risk than an EMT, yet they are required to undergo nearly 14 times more training hours than those who hold lives in their hands.
Like many other states, Nebraska has made substantial progress reforming its licensing laws over the past few years. But this fall’s hearings show there is more work to be done next year. Regardless of the claims established interests make, reducing Nebraska’s required training hours for barbers and cosmetologists will promote competition, economic opportunity, and job growth—while still protecting public safety.