According to the Institute for Justice, there exist 52 low-income occupations that require licensing in New Mexico, including everything from funeral attendants to animal trainers.1 These requirements order individuals to pay fees as well as invest a considerable amount of time in training and education. For example, an individual must commit approximately two years in experience before receiving a license to become a pest control applicator, while an aspiring emergency medical technician is required to invest 42 days and pass two exams.2
These licensing requirements for low-income occupations create barriers to entry for those who can’t invest the time or money simply in order to gain governmental permission to work. This results in fewer businesses, which means less competition and higher prices for consumers. If such professions were deregulated and the mandatory licensing system was abolished more entrepreneurs could enter the market and provide their goods and services. The current system solely benefits those businesses that have already attained their licenses, providing protection from potential competitors.
To advocate for abolishing the absurd licensing requirements in New Mexico is not to take the position that standards are unnecessary, rather to promote the idea that such standards should be brought about by consumers and not arbitrarily established by bureaucrats. If state licensing was optional, businesses would have the choice of pursuing or abstaining from going through the licensing process. Consumers could then choose to pay the additional premium set by a licensed business or opt for an unlicensed service that would in most cases be cheaper.
New Mexico needs to rid itself of these unreasonable licensing standards. With fewer state sanctioned obstacles in the way of entrepreneurs, both consumers and small businesses will benefit.
1Dick Carpenter II, Lisa Knepper, Angela C. Erickson, John K.Ross, "License to Work," The Institute for Justice, May 2012, http://www.ij.org/licensetowork
One Reply to “Day 6. Simplify/Eliminate Occupational Licensing For Low-Income Professions”
This is an interesting report and I should read the site more before I comment in detail.
New Mexico consolidated its boards and commissions for licensing authorities in the 1978 Reorganization of State Government, into the Regulation and Licensing Department (RLD). The licensing boards are usually five members appointed by the governor and receive per diem and training. This is probably where the 52 occupations come from because there are about that many boards and commissions in RLD.
But let’s look at the Barbers’ Board. You need X hours of training and a license to be a barber. Now even I can cut hair, but I do a terrible job. I can hang up a sign at my house and charge $5 a haircut. Now that is a great price and maybe I will get customers just on the price alone and not have to have a reputation for good haircutting. But if I have no training or inspections I might not know to wash the combs and scissors after each haircut. Also, if I don’t do it, I save time and can keep my overhead down charging even lower prices to the consumer Rio Grande’s stated goal. What is bad about that?
Well, my nephew got ringworm from a sloppy haircut place. I hear that TB and other diseases (rosietta, shingles, etc.) can be passed if the combs/razors are not sterilized between customers. Yikes, maybe licensing is after all, a good thing!