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Many occupational licenses discourage competition

Not all occupational licensing laws on the books in Albany actually protect consumers from harm and shoddy work. It's pretty clear that many of these laws misuse state sanctions to protect existing businesses from unwanted competition. Now a new study by the Washington-based Institute for Justice can help New York lawmakers decide which of these laws should stay and which should go.

The report, "License to Work: A National Study of Burdens from Occupational Licensing," examines licensing practices for 102 lower-wage occupations in all 50 states. If you want to work in one of the 33 occupations licensed in New York, you may need to meet a minimum age requirement, demonstrate a certain level of often irrelevant experience and training, pass an exam that may have little to do with your job and pay a licensing fee.

Of the 102 occupations reviewed, only seven — cosmetologist, pest control applicator, school bus driver, city bus driver, emergency medical technician, truck driver and vegetation pesticide handler — are regulated in New York and all other states.

Beyond this handful of occupations, the report questions the motives for licensing many others. "Occupational practitioners," the authors write, "often through professional associations, use the power of concentrated interests to lobby state legislators for protection from competition through licensing laws."

How to tell if a license is really needed? First, if consumers in more than one-half of the states get along just fine without regulating the workers in an occupation, there is a good chance New York's licensing requirements are not necessary. In New York, those occupations include optician, crane operator, animal control officer and travel guide.

Next, if requirements in New York are a lot stiffer than those in use in other states, they deserve a closer look. For example, in New York crane operators need three years of experience while in 12 of the 18 states that license this occupation not a day of training is required. Emergency medical technicians get a license with about 35 days of training while it takes four times that to become a makeup artist or skin care specialist.

There are private sector alternatives to state oversight. One option is voluntary certification. The National Institute for Automotive Service Excellence, for example, confers its certificate on about 350,000 mechanics. In addition, the Better Business Bureau and Angie's List hold occupational practitioners accountable for the quality of their goods and services.

The report ends with this advice: "When reviewing current or proposed licensing laws, policymakers should demand proof that there is a clear, likely and well-established danger to the public from unlicensed practice."

Ronald Fraser, Ph.D., writes on public policy issues for the DKT Liberty Project.