Licensing Laws Are Shutting Young People Out Of The Job Market

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Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Mon Apr 25, 2016 10:11 am

Libertarian alert!
http://fivethirtyeight.com/features/lic ... ob-market/

Young people entering the job market have always faced challenges: a lack of skills and experience, limited professional networks, unfamiliarity with workplace culture and expectations. But increasingly, they are also facing another obstacle: legal requirements that can shut off avenues to jobs before they even get the chance to apply. New data reveals just how widespread the problem is, and also why the trend isn’t likely to reverse anytime soon.

At issue are occupational licensing laws — rules, usually at the state or local level, that require workers to get a government-issued license to hold certain jobs. That makes sense for doctors and accountants, but the requirements are increasingly spreading to barbers, cosmetologists and even landscapers. (The New York Department of Labor lists 130 occupations that require licenses.) In many cases the rules seem designed less to protect consumers than to protect politically connected workers and businesses who want to deter potential competition — what economists call “rent-seeking.” As I wrote back in February, politicians and experts from across the political spectrum are increasingly concerned about the damage licensing and other forms of rent-seeking are doing to the economy.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by dragoncar » Mon Apr 25, 2016 2:03 pm

Pointedstick wrote: Libertarian alert!
http://fivethirtyeight.com/features/lic ... ob-market/

Young people entering the job market have always faced challenges: a lack of skills and experience, limited professional networks, unfamiliarity with workplace culture and expectations. But increasingly, they are also facing another obstacle: legal requirements that can shut off avenues to jobs before they even get the chance to apply. New data reveals just how widespread the problem is, and also why the trend isn’t likely to reverse anytime soon.

At issue are occupational licensing laws — rules, usually at the state or local level, that require workers to get a government-issued license to hold certain jobs. That makes sense for doctors and accountants, but the requirements are increasingly spreading to barbers, cosmetologists and even landscapers. (The New York Department of Labor lists 130 occupations that require licenses.) In many cases the rules seem designed less to protect consumers than to protect politically connected workers and businesses who want to deter potential competition — what economists call “rent-seeking.” As I wrote back in February, politicians and experts from across the political spectrum are increasingly concerned about the damage licensing and other forms of rent-seeking are doing to the economy.
As a nutritionist, this really pisses me off
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by WildAboutHarry » Mon Apr 25, 2016 5:13 pm

538 wrote:Unnecessary licensing rules aren’t the only challenge facing young people. The whole economy seems stacked against them.
Oh for f**k's sake. 

It has always been tough on those entering the job market.
That makes sense for doctors and accountants, but the requirements are increasingly spreading to barbers, cosmetologists and even landscapers.
 
Really?  Equate the union card requirements for a doctor or accountant to a barber? 

I don't expect my fish pedicurist to spend four years in medical school or do a residency, but some minimal level of expertise should be demonstrated before they should be able to hang up their shingle.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by MachineGhost » Mon Apr 25, 2016 5:28 pm

WildAboutHarry wrote: I don't expect my fish pedicurist to spend four years in medical school or do a residency, but some minimal level of expertise should be demonstrated before they should be able to hang up their shingle.
Says who?  Who decides that?  And who decides what is in the etucasion?  Cronies or independent board members?  Reality is it is cronies, so they act as a protectionist cartel against "unlicensed" competitors with expensive, burdensome, irrelevant and stupid etucasion requirements.  It's like those useless Series 7 exams brokers must take to get "licensed" (as if that stops them from chopping, boning and juicing).  The optimal thing to do is memorize the answers required, then promptly forget it all as it has zero relevance to the real world.

Unless there is a CLEAR AND PRESENT DANGER to public safety, 99% of occupations do not need to be "licensed".  The government has no constitutionally legal interest otherwise.  It's even written explictly in many state constitutions!!!

Look up the history of the AMA (American Medical Association) cartel sometime.  They used to have alot of crony political power that they rapaciously abused to squelch any hint of competition.  It had nothing at all to do with healing patients or saving their lives.  Physician membership's been declining for years and that's a good riddance, although they still bark loudly (into an increasing empty echo chamber).
Last edited by MachineGhost on Mon Apr 25, 2016 5:37 pm, edited 1 time in total.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Mon Apr 25, 2016 5:30 pm

WildAboutHarry wrote: I don't expect my fish pedicurist to spend four years in medical school or do a residency, but some minimal level of expertise should be demonstrated before they should be able to hang up their shingle.
I agree, people should be competent in the services they sell. Thankfully, we have this amazing thing called capitalism that generally takes care of that for us very quickly and efficiently, and really works very well most of the time, especially in professions where lives aren't on the line.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Mon Apr 25, 2016 6:16 pm

There seem to be a lot of incompetent and dishonest auto mechanics and contractors of various kinds.  It's also hard to find a good dentist.

Part of the problem is that customers may not have the necessary information to evaluate service providers.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Mon Apr 25, 2016 6:33 pm

jafs wrote: There seem to be a lot of incompetent and dishonest auto mechanics and contractors of various kinds.  It's also hard to find a good dentist.

Part of the problem is that customers may not have the necessary information to evaluate service providers.
And you'll notice that dentists are universally licensed! The problem of asymmetric information between the customer and the provider is a universal one for many fields, and while licensure was purportedly supposed to solve it, as we can see, it has not.

Anecdotally, I've personally been burned by (licensed) dentists more than (unlicensed) auto mechanics. And I've been burned by both licensed and unlicensed contractors. Honestly the license doesn't really seem to add much trustworthiness if any in my book.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by MachineGhost » Mon Apr 25, 2016 6:44 pm

jafs wrote: There seem to be a lot of incompetent and dishonest auto mechanics and contractors of various kinds.  It's also hard to find a good dentist.

Part of the problem is that customers may not have the necessary information to evaluate service providers.
Yelp! is your friend.  It's old school people that don't use the powah of the Internetz that get screwed over.

I tried Angie's List once, but it was a joke and is decreasing as any significant player, if it ever was.  It suffers from the "fox guards the henhouse" bias like the BBB does.

I don't buy PS's market-feedback mechanism of capitalism too much.  That works only in a highly idealized world where everyone has perfect information.  But the anarchronistc and lazy heuristic of relying on "licensing" is clearly a failure.  Maybe the Internetz will change things.
Last edited by MachineGhost on Mon Apr 25, 2016 6:52 pm, edited 1 time in total.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Mon Apr 25, 2016 7:04 pm

MachineGhost wrote: I don't buy PS's market-feedback mechanism of capitalism too much.  That works only in a highly idealized world where everyone has perfect information.  But the anarchronistc and lazy heuristic of relying on "licensing" is clearly a failure.  Maybe the Internetz will change things.
It already works in the world you already live in for basically everything you buy. There's no capitalist propaganda ideology here; just get out of your house and buy some good or service. Or do it on the internet, I don't care. The vast majority of sellers of things you buy likely have no special license and if you don't like the service, you go somewhere else and eventually the shittiest ones go away and are replaced with less shitty ones.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by MachineGhost » Mon Apr 25, 2016 8:08 pm

Pointedstick wrote: It already works in the world you already live in for basically everything you buy. There's no capitalist propaganda ideology here; just get out of your house and buy some good or service. Or do it on the internet, I don't care. The vast majority of sellers of things you buy likely have no special license and if you don't like the service, you go somewhere else and eventually the shittiest ones go away and are replaced with less shitty ones.
You seriously think that consumer rejection leds to creative destruction?  LOL!  That only happens in the most sporadic, overt cases due to grassroots movements and/or widespread publicity. 

Plus you're only talking about retailers, which is easily the most visible and least consequential business to consumers.  I'm talking about the entire business ecosystem, especially all of the Chinese manufacturer's who produce substandard shit for all the name brands that used to stand for quality.  Who's putting them out of business, hmm???  One reason Apple has been so exceptional despite using overseas manufacturing is because they prioritize quality control instead of profits.

In health care, the shittiest ones DON'T go away.  They just go down the totem pole to deal with the high volume, cost sensitive.  Now, maybe you don't consider health care to be "capitalism", but the consumer is still free to go anywhere/somewhere else (at least within their network), so its still consumer driven.

The "invisible consumer hand" of capitalism always equating to optimal outcomes is a libertarian fantasy.  It's how technophobe expects his anarchy to work for gawd's sake!!!
Last edited by MachineGhost on Mon Apr 25, 2016 8:14 pm, edited 1 time in total.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Mon Apr 25, 2016 9:40 pm

MachineGhost wrote: You seriously think that consumer rejection leds to creative destruction?  LOL!  That only happens in the most sporadic, overt cases due to grassroots movements and/or widespread publicity. 

Plus you're only talking about retailers, which is easily the most visible and least consequential business to consumers.  I'm talking about the entire business ecosystem, especially all of the Chinese manufacturer's who produce substandard shit for all the name brands that used to stand for quality.  Who's putting them out of business, hmm???  One reason Apple has been so exceptional despite using overseas manufacturing is because they prioritize quality control instead of profits.

In health care, the shittiest ones DON'T go away.  They just go down the totem pole to deal with the high volume, cost sensitive.  Now, maybe you don't consider health care to be "capitalism", but the consumer is still free to go anywhere/somewhere else (at least within their network), so its still consumer driven.
You're sort of making my point… health care is the least "market-like" segment of the economy. If you don't think that buyer choice and seller competition make capitalism work, what do you think does?
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Libertarian666 » Mon Apr 25, 2016 9:55 pm

I'm not a fan of occupational licensing, but I just got a license to sell life insurance. The test mostly tested whether I knew the ethical and legal restrictions on selling life insurance (and annuities), which actually seem to be fairly reasonable, although I don't know how stringently they are enforced in practice.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by WildAboutHarry » Mon Apr 25, 2016 9:56 pm

[quote=MachineGhost]The government has no constitutionally legal interest otherwise.[/quote]

Promote the general welfare seems to cover just about everything.  Interstate commerce probably covers the gaps.  I could cross state lines to get my fish pedicure.  :)

But I agree in one sense.  We either need to eliminate all licensing and caveat emptor, or license everything where some individual performing a service has the potential to endanger customers via incompetence.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 7:11 am

Pointedstick wrote:
jafs wrote: There seem to be a lot of incompetent and dishonest auto mechanics and contractors of various kinds.  It's also hard to find a good dentist.

Part of the problem is that customers may not have the necessary information to evaluate service providers.
And you'll notice that dentists are universally licensed! The problem of asymmetric information between the customer and the provider is a universal one for many fields, and while licensure was purportedly supposed to solve it, as we can see, it has not.

Anecdotally, I've personally been burned by (licensed) dentists more than (unlicensed) auto mechanics. And I've been burned by both licensed and unlicensed contractors. Honestly the license doesn't really seem to add much trustworthiness if any in my book.
But my point is that capitalism doesn't sort this out, so that we have good, honest and reasonably priced service providers.

The only way that it might is if customers were very well-informed, able to evaluate service providers, and assertive about any work to be done.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 7:14 am

Pointedstick wrote:
MachineGhost wrote: You seriously think that consumer rejection leds to creative destruction?  LOL!  That only happens in the most sporadic, overt cases due to grassroots movements and/or widespread publicity. 

Plus you're only talking about retailers, which is easily the most visible and least consequential business to consumers.  I'm talking about the entire business ecosystem, especially all of the Chinese manufacturer's who produce substandard shit for all the name brands that used to stand for quality.  Who's putting them out of business, hmm???  One reason Apple has been so exceptional despite using overseas manufacturing is because they prioritize quality control instead of profits.

In health care, the shittiest ones DON'T go away.  They just go down the totem pole to deal with the high volume, cost sensitive.  Now, maybe you don't consider health care to be "capitalism", but the consumer is still free to go anywhere/somewhere else (at least within their network), so its still consumer driven.
You're sort of making my point… health care is the least "market-like" segment of the economy. If you don't think that buyer choice and seller competition make capitalism work, what do you think does?
That's a different point.

Those are certainly major factors in capitalism.  The question is whether or not they result in good quality, reasonably priced goods and services, without needing any licensing/regulation.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 7:53 am

If we look at the historical record, I think it's pretty clear that capitalism has been the biggest force for quality, quantity, and innovation in the sphere of physical products that has ever existed. It's not perfect, of course, and there are indeed pernicious incentives like those that have resulted in a decline of food quality in the interests of quantity (though it's not clear that the alternative of "fewer people"--i.e. starvation and malnutrition--is superior). But in general, when sellers are free to sell and buyers are free to buy from whomever they want--or nobody at all, that's a systemic force for improvement in both the practices of selling and buying.

To use an experience from my own life, having ben burned by a bad dentist, I was driven to learn more about oral care and dentistry and now I have a better grasp of what my current dentist is doing and feel that I am able to make better decisions along with him, rather than just trusting everything he says.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 9:01 am

I don't think unregulated capitalism is all that great.

Capitalism, with some reasonable and useful regulations, seems a lot better to me.

And, licensing professions, although imperfect, seems better to me than letting anybody practice medicine or dentistry.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 9:26 am

But we're not talking about medicine or dentistry here. We're talking about licensing interior decorating, hair cutting, door repair, makeup application, pest control, midwifery, bartending, packaging, milk sampling…

Obviously you want practitioners of these fields to be competent and skilled, but I don't see any reason why the government should be in the business of assuring it. Professional certification should be enough, if it's necessary at all. What we want is fewer barriers to entry for employment, not more. In case people haven't noticed, there is an employment and income crisis in this country among members of the working class--exactly the people who tend to gravitate to professions that are heavily licensed.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 10:19 am

You mentioned dentistry.

Some of the professions you mention clearly have public safety aspects, like pest control, midwifery, perhaps bartending.  I think anything with public safety issues is better handled by government than by private industry.

If we look historically, there should be a lot of examples of that - lead based paint, tobacco companies, etc.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 10:23 am

Everything can be construed to have "public safety aspects." The GPS software in the phone I work on is responsible for directing the operation of multi-ton steel missiles full of explosive liquids that carry children. So maybe the code I write should be regulated, eh?  ::)

The reality of regulation and licensure is that is that is usually ends up captured by the regulated interests and used as an anti-competitive weapon to keep newcomers out and push up wages. Which, coincidentally, is the objection raised by the original article.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 10:26 am

Do we have better doctors now than when they weren't required to be licensed?

Dentists?

Etc.?
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 10:29 am

jafs wrote: Do we have better doctors now than when they weren't required to be licensed?
It's not at all clear, honestly. Medical care is great for things like fixing broken bones and surgery, and abysmal in dealing with chronic conditions and "lifestyle diseases."

What is clear is that the heavy licensing and regulatory regimes surrounding medicine have raised doctors' wages and medical costs all throughout the industry, to the extent that affordability of medical care is now a chronic and seemingly unsolvable national crisis. In that respect, things are undoubtedly worse.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by jafs » Tue Apr 26, 2016 10:33 am

I completely agree with your first paragraph.

But, I'd be willing to bet that making sure doctors know and can demonstrate knowledge/expertise about a wide variety of anatomy/physiology, etc. has improved the overall quality of medical care.

That may be part of why health care is so expensive, but it's not the whole story - drug companies are making huge profits, for one thing.
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 10:42 am

jafs wrote: I completely agree with your first paragraph.

But, I'd be willing to bet that making sure doctors know and can demonstrate knowledge/expertise about a wide variety of anatomy/physiology, etc. has improved the overall quality of medical care.
Definitely. It's important that people know their profession, especially if you as a consumer may not be in a very good condition to know much about it yourself.

However, nothing about this requires government licensure. Imagine that there was hypothetically no physician licensure and instead there were roughly equivalent private certifications. Would you visit a doctor without any of these certifications? Would Medicaid pay them? Would anybody see them?

The reason why health care is so expensive nowadays is basically the same set of reasons why college is so expensive:
- Very high wages and benefits among service providers
- Culture/convention/institution of indirect, third party payment reduces price sensitivity of buyers; no real prices anywhere
- No culture of shopping around; little direct competition
- Lots of money goes to construction of fancy new facilities
- Huge admin bureaucracy to manage all of this that becomes a major cost center
- Large influx of government money to try to alleviate affordability problems that only entrenches the institutions that caused the problem and further complicates payment and selection
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Re: Licensing Laws Are Shutting Young People Out Of The Job Market

Post by Pointedstick » Tue Apr 26, 2016 11:22 am

I wonder how much of the growth of television, the internet, video games, and the like are because of the poor opportunities for social relationships caused by bad urban design. We're a social species, and once we can't see any other humans most of the time without hopping in a car, well, it seems easier to look at them on TV, talk with them over the internet, or transpose yourself into a virtual world. Ever notice how first-person video game environments are almost universally pedestrian-centric? When vehicles are present, they're usually touted as a special feature. Because duh, in a first-person game, you walk. Why wouldn't you walk? ::)
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