Occupational Licensing

Standing in line marking time
Waiting for the welfare dime
'Cause they can't buy a job
--Bruce Hornsby & the Range

Interesting data that extend our previous discussion on mandatory licensing. Although proponents argue that it protects consumers, occupational licensing increases the cost of doing business and raises entry barriers to entrepreneurial entry into industries.

Ultimately, licensing limits the quantity of goods and services available to consumers.

Licensing is more pervasive today. Estimates suggest that about 1 in 20 workers were subject to licensing requirements in the 1950s. Today, the ratio is closer to 1 in 3.

Occupational licensing hits lower income workers particularly hard. By making it difficult to enter occupations that have traditionally provided lower income workers with a path to self-sufficiency and upward mobility, licensing makes it tougher to climb the ladder.

Like minimum wage laws, occupational licensing is a form of compulsory unemployment.