How Professional Licensing Groups Distort The Market

from the the-new-unions dept

Nearly a year ago we wrote about how “professional” groups and organizations where professionals are required to obtain a license and abide by certain rules are really a new type of anti-competitive union, hidden beneath the veneer of public interest. I should be clear up front, as someone who actually has a degree in this stuff, and spent plenty of time with unions that I have no problem with the concept of collective bargaining. The problem is that many union activities are less about collective bargaining and more about anti-competitiveness. It appears that Forbes has now stepped up to the plate with a very similar article to ours, noting that professional organizations are the new unions, not only hiding behind bogus claims of public interest, but also doing a lot more harm than good in many cases. As the article notes, these professional licensing organizations raise fees, shrink the labor pool and often make things less safe — by encouraging people to do dangerous things they might otherwise hire a professional to do, if that professional weren’t kept artificially expensive. In effect, the arguments in favor of these types of licenses are similar to the arguments in favor of DRM or other limitations on a market. While they may sound good upfront to those in a position to leverage the monopoly power granted by them, the unintended consequences over the long term harm everyone.

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Comments on “How Professional Licensing Groups Distort The Market”

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12 Comments
Hellsvilla (user link) says:

IT in particular...

If they would add apprenticeships to those requirements to get these “certs” and “licenses” then we might see some real use of them, until then, they are marketing fluff, used primarily to brainwash the idiot IT workers.

After my first M$ course completed, I realized that it was nothing more than an attempt to brainwash me. NOTHING in that course made me more knowledgeable, or more capable to administer the product. Quite the opposite, indeed.

I refuse to get any more of those bous certifications now, and will tell everyone I work with that I respect them less for having gone through it themselves.

ANY IT EMPLOYER that requires them is an IT employer I don’t want to work for.

Anonymous Coward says:

It's not just IT

My ex-wife is a licensed massage therapist. I learned a lot from that!

One of the things I learned is that massage therapists need to be licensed through the state. Also, horrifyingly, there are people on the state payroll whose entire job is devoted to collecting fees from licensed therapists, and bringing the weight of the law down on any poor sap who dares to charge for a massage without possessing a proper license.

The justification, of course, was public safety. Yes, hospitals are just filling up from countless people damaged by unskilled massages from their unlicensed spouses. Can’t you be fined for styling hair for money without a license? That’s probably to protect the children, right? Each one of these silly license requirements makes our economy function a little bit worse.

kristin says:

Re: It's not just IT

Um, my mom is a former salon owner. When she was in beauty school, she came home from an unlicensed classmate’s house after receiving a permanent with a sore spot on the back of her neck. It turned into a massive chemical burn. Some harsh and dangerous chemicals are used in salons for permanents and hair coloring. Hot wax can also cause major burns to the skin. You better believe they need to be licensed if they’re doing anything more than trimming hair.

You don’t know much about massage therapy. Clinical or theraputic massage impacts not only muscles, but bones, tendons, nerves, and organs. Massage is a healthcare field. It is a very poor choice to seek treatment from an unlicensed therapist. Before I enrolled in massage therapy school, I was as ignorant as you. Now I understand the implications. We are required to carry malpractice insurance for good reason.

vic says:

This article smacks of populist rethorics. How about being a bit more specific with the accusations? I’m not a big supporter of unions for the same reasons you outlined, but I do think that establishing quality standards through licensing and rules help increase value. It’s the basis of any educational system! Doctors, lawyers, police officers, etc.. are all licensed and obligated to follow rules. So why not for massage therapists or IT professionals? The issue is about who sets the rules and how expensive is the license. On that basis, yes, there is much to talk about!

vic says:

This article smacks of populist rethorics. How about being a bit more specific with the accusations? I’m not a big supporter of unions for the same reasons you outlined, but I do think that establishing quality standards through licensing and rules help increase value. It’s the basis of any educational system! Doctors, lawyers, police officers, etc.. are all licensed and obligated to follow rules. So why not for massage therapists or IT professionals? The issue is about who sets the rules and how expensive is the license. On that basis, yes, there is much to talk about!

vic says:

This article smacks of populist rethorics. How about being a bit more specific with the accusations? I’m not a big supporter of unions for the same reasons you outlined, but I do think that establishing quality standards through licensing and rules help increase value. It’s the basis of any educational system! Doctors, lawyers, police officers, etc.. are all licensed and obligated to follow rules. So why not for massage therapists or IT professionals? The issue is about who sets the rules and how expensive is the license. On that basis, yes, there is much to talk about!

vic says:

This article smacks of populist rethorics. How about being a bit more specific with the accusations? I’m not a big supporter of unions for the same reasons you outlined, but I do think that establishing quality standards through licensing and rules help increase value. It’s the basis of any educational system! Doctors, lawyers, police officers, etc.. are all licensed and obligated to follow rules. So why not for massage therapists or IT professionals? The issue is about who sets the rules and how expensive is the license. On that basis, yes, there is much to talk about!

vic says:

This article smacks of populist rethorics. How about being a bit more specific with the accusations? I’m not a big supporter of unions for the same reasons you outlined, but I do think that establishing quality standards through licensing and rules help increase value. It’s the basis of any educational system! Doctors, lawyers, police officers, etc.. are all licensed and obligated to follow rules. So why not for massage therapists or IT professionals? The issue is about who sets the rules and how expensive is the license. On that basis, yes, there is much to talk about!

Taylor says:

Vic

Doctors and lawyers are as much of a problem as massage therapists. Any time you artificially limit competition, it causes prices to rise. And it does not necessarily make people more safe, it just makes poor people unable to receive services they need legally. If you are making an argument that having every licensed ensures that everyone is qualified, and thus makes people safer, without these laws certifications would still exist to ensure that people were qualified. I just wouldn’t have to pay $100 to have someone help me write my will or $20 and insurance to get a prescription for allergy medicine from my doctor that I could have gotten just as well from a registered nurse.

That is essentially the same concept that is used in IT, where repairing a computer without a license is perfectly legal. You go to the guys with 8 certification to fix your server, but pay more, and go to the kid across the street to get rid of a pesky virus.

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