THE DMC PERSPECTIVE OCCUPATIONAL LICENSING Scale back occupational licensing laws By Daniel Davy, Tallahassee Democrat (opinion), September 9, 2014

March 2015

“The accountability and information-providing role of gov-

Florida has one of the nation’s most expansive and burdensome web of occupational licensing laws. In theory, these laws are justified as a way to protect you, the consumer. In reality, they protect special interests from consumer accountability and drive up prices for many of our state’s poorest citizens. It’s time to rethink the state’s approach to occupational licensing. Occupational licensing laws are government requirements for education, experience and fees to be paid to the state in order for someone to legally operate in a given profession. Many people immediately think of jobs that require a lot of education or skill, such as surgeon or radiologist. These are also jobs where a small mistake can have dramatic personal or public health consequences. In fact, most laws regulating who can practice what jobs apply to positions that most of us think are routine or have little potential for public harm, such as funeral attendants, travel agents, interior designers, barbers or nail salon workers. Moreover, the highest licensing burdens often fall on those least able to afford the investment in time and resources necessary to get a license. According to a recent study by the Institute for Justice, a national public interest law firm, low- to moderate-income Florida workers face the fourth most burdensome occupational licensure laws in the nation, based on an analysis of 102 common jobs for those earning below the national median income. Nationally, states require an average of $203 in fees and about 10 months in training to obtain a license to perform these jobs. Florida demands fees averaging $274 and 20 months — more than a year and a half. In some cases, the size of the requirement is totally disconnected from public health and safety.

For example, Florida requires barbers to have eight times more education than emergency medical technicians, who literally hold people’s lives in their hands. In many cases, fellows Patrick McLaughlin, Jerry Ellig, and Dima Shamoun from the Mercatus Center at George Mason University found these laws insulate industries from accountability through free competition and fail to improve the level of services provided to the public. Furthermore, these laws consistently cause higher prices for consumers. Even if the public doesn’t always benefit from occupational licensing, those protected from the competition of the labor market do. Economists have found that these laws boost wages for the average licensed worker by 15 percent or more. Professional associations lobby federal, state and local governments to create and maintain these laws irrespective of evidence showing they do not protect the public. The lucrative nature of these restrictions on competition helped fuel the increase in the proportion of licensed professions from less than 5 percent in the 1950s to roughly 29 percent in 2008.

The result is often an unjustified web of protectionism for entrenched professionals, restricting opportunity for prospective workers who need it most and increasing costs for consumers. Moreover, technology has dramatically increased consumer accountability through the marketplace to levels unheard of just 10 years ago. Poorly performing businesses and practitioners are regularly and effectively punished by reputation aggregators such as Angie’s List and Google reviews, leaving the worst offenders with few, if any, customers.

ernment licensure has been rendered increasingly duplicative and unnecessary in many fields through the growth of technology.”

-Daniel Davy, former policy analyst and public affairs manager for the DeVoe L. Moore Center

The accountability and information-providing role of government licensure has been rendered increasingly duplicative and unnecessary in many fields through the growth of technology. In 2011, Florida legislators considered reform legislation for our byzantine web of occupational licensing. However, the proposed changes died in the face of stiff opposition from licensed and entrenched professional associations. With mounting evidence that many of these laws fail to produce measurable benefits to the public but place an increasingly regressive burden on those least able to pay, it is time to reexamine our licensing laws. Government has a role to play in regulating business through licensing occupations. These regulations, however, should be tied directly to evidence showing health and safety benefits to citizens and consumers. Unfortunately, most of Florida’s occupational licensing laws fail this test.

The DeVoe L. Moore Center | 150 Bellamy Building, Tallahassee, FL 32306 | 850-644-3848 | http://coss.fsu.edu/dmc/

Florida ranks 48th in occupational licensing

Daniel Davy

By Daniel Davy, DeVoe Moore Center Policy Blog, September 29, 2014

According to a recent Institute for Justice study, Florida has the fourth most burdensome occupational licensure laws in the nation. One of the many occupations Florida licenses is farm labor contracting. A farm labor contractor is anyone who employs other farm workers for a third party or furnishes employees to work under the supervision of a third party for a fee or other form of compensation. Florida is one of nine states to require a license to operate as a farm labor contractor, and one of two states to require an exam to enter the profession. Florida also requires $160 in fees. Florida has had issues with agriculture migrant worker conditions and labor trafficking. According to a 2013 report by Polaris, a non-profit focused on human trafficking, Florida has the 3rd highest number of human trafficking cases in the nation. Some have argued for using licensing of farm labor contractors to address this issue. Indeed, labor trafficking may call for some level of accountability through licensing. Florida’s Department of Business and Professional Regulation (DBPR) is responsible for licensing and regulating the occupation. While 48 states see no need to conduct competency testing for farm labor contractors, Florida tasks DBPR with providing “a program of education and examination” for these workers. Ostensibly the examination ensures the contractor “is knowledgeable concerning the duties and responsibilities of a farm labor contractor.”

However, it seems unclear that the absence of government competency exams in the 48 other states has caused public health and safety concerns, nor quality problems. In the case of labor trafficking, it is unclear how our licensure-testing requirement eliminates the bad actors who willfully operate outside of the law and exploit labor. Such overreach in licensing requirements is a poor substitute for the broader enforcement and immigration reforms needed to prevent the exploitation of migrant workers. The private market seems to effectively self-regulate farm labor contractors’ level of service nationwide.

Daniel Davy is a former policy analyst and manager of public affairs at the DeVoe L. Moore Center. He is currently a Fulbright Award recipient working in Malaysia. While at the Center, Davy published multiple blog articles and commentary in local newspapers on topics such as benefit corporations, Florida’s business climate, and occupational licensing. Davy has worked in the Florida Legislature and graduated from FSU with degrees in economics and history.

Florida’s farm labor contractors do benefit from their permitting and testing requirements, even if the public benefits are unclear or tenuous. Economists Morris Kleiner and Alan Krueger found that on average licensing boosts wages for workers by 15%. Since competition from other potential contractors is deterred by the licensing and testing requirement, higher prices are passed on to consumers increasing contractor incomes. Further, Kleiner and Krueger found that individuals in licensed professions

The DeVoe L. Moore Center | 150 Bellamy Building, Tallahassee, FL 32306 | 850-644-3848 | http://coss.fsu.edu/dmc/

Government protects consumers from bad haircuts By Daniel Davy, DeVoe Moore Center Policy Blog, October 2, 2014

Florida protects its hairy public from rogue barbers by requiring prospective barbers to pay fees and complete extensive education requirements and exams before granting permission to legally operate. These requirements are one part of what makes Florida’s licensing the fourth most burdensome in the country according to a recent study by the Institute for Justice. Prospective barbers must pay costs of $250 for the license and exam fees. These fees are nearly double the national average of $130 according to the study. However, Florida barbers’ most burdensome entry requirement is 1,200 hours—roughly 280 days—of training at a licensed barber school. This amounts to over 8 times as much required education as Emergency Medical Technicians. For reference, the Florida Barber Academy charges $14,550 including all tuition and fees for its certified 1,200 hour program and certification. This education requirement, however, is duplicative as all licensees must pass an exam demonstrating complete mastery over the skill set and the profession’s health and safety issues. These licensing requirements are a significant and burdensome barrier to entry into a low-income occupation. The Bureau of Labor Statistics reports barbers earn a modest median wage of $10.38 per hour in Florida. It wasn’t always so difficult to become a barber. Until 1978 and the passage of Florida’s “Barbers’ Act,” the iconic American tradecraft was not subject to licensing requirements in Florida. The Act claimed licensing was “necessary in the interest of public health, safety, and welfare to regulate the practice of barbering in this state.” Support for licensing was growing in large part because of concerns over the usage of potentially harmful chemicals and the transmission of diseases by barbers untrained in sanitation and cleanliness. However, Florida’s licensing laws go far beyond health and safety education by requiring nearly 9 months of technical training, largely in styling and technique. Florida should eliminate its duplicative barber education requirements. To the extent the public interest is served at all by licensing, the state’s interest should be limited to protecting public health and safety. All individuals who demonstrate a mastery over the basic barber skill set on the state-level exam deserve a chance to compete in the marketplace regardless of their completion of costly, redundant training requirements.

The DeVoe L. Moore Center | 150 Bellamy Building, Tallahassee, FL 32306 | 850-644-3848 | http://coss.fsu.edu/dmc/

The DeVoe L. Moore Center

Contact Us DeVoe L. Moore Center

The DeVoe L. Moore Center at Florida State University is an interdisciplinary unit in the College of Social Sciences and Public Policy that is dedicated to increasing knowledge and understanding about the role of government in a market economy. The Center emphasizes the study of how government rules, regulations and programs affect the economy and individuals. Bringing the insights of economics, planning, political science, and public administration to the study of state and local regulations is a major focus of the Center’s efforts.

150 Bellamy Building, Tallahassee, FL 32306 Office: (850) 644-3848 Fax: (850) 644-0581

Scholarly research of the Center’s faculty and graduate students generates knowledge that is integrated into innovative undergraduate and graduate teaching and shared with the wider academic community. The Center also conducts outreach activities to inform elected officials and the general public about our research findings.

Facebook: www.facebook.com/ TheDeVoeLMooreCenter

The Center was founded in 1998 as the result of a gift from DeVoe L. Moore, an entrepreneur and benefactor committed to free enterprise.

Twitter: @DeVoeMooreCtr

Visit our website at http://coss.fsu.edu/dmc/

DeVoe L. Moore Center 150 Bellamy Building Tallahassee, FL 32306-2220

PLACE STAMP HERE