Occupational licensing – income protection, competition and competency

As the economy tightens occupational licensing is becoming more prevalent and controversial.  This blogger sees it as involving three issues – income protection, competition and competency.

Occupational licensing is the trend to require people in more and more occupations to have licenses to practice.  It has traditionally been used for professionals and is usually said to be needed to protect the public from incompetent practitioners.  As more occupations have required licenses it appears to have gone to ridiculous extremes.

Regardless of the public protection arguments the main function is to restrict competition and it appears to be working according to an article which shows higher incomes for those so protected. This is good for workers who are protected but does nothing for people who remain unemployed or otherwise unprotected from competition.  Another way to help people with income problems would be a universal basic income.  A UBI would ensure all people would have the opportunity for a minimum standard of living.

A UBI would also allow us to maintain a market economy based on competition with all the benefits efficiency and individual decision-making.

Occupational licensing also restricts the right of consumers to make choices about the services we purchase.  A lot of us do not always have the knowledge to evaluate a practitioner.  This blogger likes Milton Friedman’s proposal for certification by private organizations rather than licensing by governments. There could be different levels or types of certification.  This would help those of us with out knowledge and maintain our right to make choices for ourselves.

There are other ways of resolving the issues that lead to occupational licensing and these ways would protect the incomes of everyone, allow more competition in the economy and protect us from our ignorance.

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