A New Approach for Occupational Licensing in Wisconsin
A decade ago an errant pass in a basketball game hit my thumb hard along the nail. After a couple days of intense pain, the thumbnail fell off and then grew back misshapen. It turned out that the injury killed a portion of the nail bed. As afflictions go it is pretty minor, but it is a tad grotesque and makes a few tasks a bit more difficult.
An orthopedic surgeon suggested I either opt for surgery—which may not have worked or been covered by insurance—or else have the entire nail permanently removed for aesthetic reasons. I oped to leave it alone and began getting a regular manicure to keep the thumbnail under control.
A couple months ago, the owner of the salon I frequent asked if a new employee could do my manicure. The issue was that he spoke no English and had no license, but they assured me he had been doing manicures for years in Vietnam and was quite talented. I agreed.
The owner explained my thumbnail issue to him, and he spent several minutes on the digit. A few days later, to my surprise, the dead nail bed began growing again. The nail now looks almost normal.
The story of my healing nail asks a question: to what extent should states license manicurists, or professions that by and large have nothing to do with health and safety? Wisconsin—and many other states—requires graduation from an accredited institution that teaches the trade as well as hundreds of hours of experience. It does not automatically recognize licenses issued by another state or country either. In other words, there would be no clear path for this manicurist to legally practice his profession in the state.
The typical state licenses hundreds of professions. Some of those are unobjectionable—most people want doctors and anesthetists to undergo a licensing regime before assuming their professions, for instance. But other licenses are problematic. For instance, many states require interior designers and florists to be licensed. Do we really need to be protected from a rogue designer who might do damage to the color scheme of our homes? The same question can also be asked of manicurists, barbers, aestheticians, and other professions that have little to do with health or safety.
The harm in excessive licensing is twofold. First, people with an aptitude for a profession but without the means to take the classes to obtain the license are effectively shut out of a way to earn a decent living. A license for an interior designer, for instance, requires six years of training, including at least two years of school.
Second, the higher wages from excessive licensing translates to higher costs for these services as well. A manicure in Oshkosh—a former home of mine—costs more than in Washington DC, where I currently reside. While not everyone might need or want such services, the disparity in prices between my high-cost current home and my former low-cost residence suggests that someone’s getting a bad deal.
A study I wrote with my colleague Logan Albright, published last month by the Wisconsin Policy Research Center, examines the inexorable expansion of licensing in the state—driven both by the expansion of the service sector as well as the increase in the number of occupations in the state requiring a license. We suggest that in an economy where states have been ratcheting up their efforts to attract jobs and boost economic growth, it is time for Wisconsin to examine the current licensing regime and think cogently about which tasks merit licensing and which can do without. Many other states have begun to do precisely this—and are concluding that their current licensing regime has gone too far.
Such an exercise should be a bipartisan affair. Unnecessary licensing hurts the entire state, but those who come from low-income households or lack the means to obtain the training to get such jobs suffer the most.
Governor Walker and the state legislature have both announced they will look at this issue. There’s a lot to look at, we submit.
Ike Brannon is president of the consulting firm Capital Policy Analytics.
