Our empirical analysis finds that after controlling for observable heterogeneity, including occupational status, those with a license earn higher pay, are more likely to be employed, and have a higher probability of receiving retirement and pension plan offers. According to our estimates, where governmental licensing is required for the job it raises hourly wages by about 8.4 percent.
And good luck making those payments once you’ve lost your job or license. The Walter Scott shooting in South Carolina has focused belated attention on the “deadbeat-dad” rules crafted variously to please budget hawks, women’s rights advocates, and conservatives, which in practice can pile hopelessly large obligations on low-earning fathers, enforced in some states not only by jailing but also by deprivation of drivers’ and occupational licenses instrumental in earning a living. I’ve got more at Cato at Liberty, following up on New York Times coverage.
“It’s fairly stunning that the chief regulator at the state’s Division of Private Occupational Schools is a part-time instructor for a chain of yoga studios at the time she is advocating for more regulation of yoga teacher-training studios that are essentially the chain’s competitors.” But with occupational licensure, conflict of interest comes with the territory, and this Colorado episode is no exception [Denver Post editorial]
- Jury convicts Ironworkers Local 401 boss in union violence case [Philadelphia Inquirer, CBS Philly, earlier here, etc. on Quaker meetinghouse arson and other crimes] Pennsylvania lawmaker proposes to end unions’ exemption from laws defining crimes of harassment, stalking, threatening [York Dispatch; more on exemption of unions from these laws]
- Emergent regime under federal law: if you’ve ever offered light duty to a disabled worker or returning injured worker, you’d better offer it to pregnant worker too [Jon Hyman]
- Everything you know about company towns is wrong [Alex Tabarrok]
- “The EEOC issues you’ll want to keep an eye on in 2015″ [Littler Mendelson via Tim Gould, HR Morning]
- Sued if you do: employers struggle to navigate between government rules encouraging, penalizing hiring of applicants with criminal records [WSJ, paywall] “Watch Your Back: The Growing Threat of FCRA Background Check Class Actions” [Gregory Snell, Foley & Lardner]
- “Nearly 30 Percent of Workers in the U.S. Need a License to Perform Their Job: It Is Time to Examine Occupational Licensing Practices” [Melissa S. Kearney, Brad Hershbein and David Boddy, Brookings via John Cochrane]
- “The Effect of Mandatory Sick Leave Policies: Reviewing the Evidence” [Max Nelsen] “Popularity of Obama’s paid sick leave proposal depends on workers not realizing it ultimately comes out of their paychecks.” [James Sherk]
The panel is packed with big names and many of them offer suggestions with a law or regulation angle, including Philip K. Howard (“Radically Simplify Law”), Derek Khanna (rethink patent and copyright law; related, Ramesh Ponnuru), Morris Kleiner (reform occupational licensure; related, Steven Teles), Arnold Kling (“Sidestep the FCC and the FDA”), Robert Litan (admit more high-skill immigrants and reform employment of teachers; similarly on immigration, Alex Nowrasteh), Adam Thierer (emphasize “permissionless innovation”), and Peter Van Doren (relax zoning so to ease movement of workers to high-wage cities).
Almost all government restrictions on our freedom are indirect. They are imposed on us by way of some business. In fact, laws that directly restrict the freedom of the individual are rare and almost always controversial….
But the vast majority of government encroachments on your freedom of action come about through laws that constrain an employer or a seller – without much controversy. …
After proceeding through examples from workplace safety regulation, liquor control, medical device regulation, occupational licensure, and other areas, Goodman adds:
Let’s take one more example from the health care field. The Obama administration is about to impose new regulations affecting home health care workers. They must receive minimum wages and overtime pay. But as far as I can tell, this rule applies only to workers who are employed by agencies and not to workers who are directly hired by an elderly or disabled patient. No matter how they are employed, the economic effects will be the same – a blow to the seniors and people with disabilities. In one case the effects would be visible; in the other they would be invisible. It’s hard to avoid the conclusion that if there were no agencies in home health care, there would be no new regulations.
The growth of the firm may be inevitable, desirable, or both for separate reasons, but it also makes regulation more feasible by generating an entity more suitable for bearing the regulatory harness. Incidentally, is blocking the Obama home health carer overtime regulations a high priority for the incoming Republican Congress, and if not, why not?
- Operator of Jimmy John’s sandwich shops asked low-level employees to sign a noncompete. What would be the point? [Bainbridge, Hyman]
- GOP Congress might take aim at a range of current union and NLRB practices including political dues spending without member opt-out [Sean Higgins, Washington Examiner]
- Reminder: turning union activity into a protected category under the Civil Rights Act is one of the very worst ideas around [George Leef, earlier on Ellison-Lewis proposal here and here]
- Scrutiny of occupational licensure intensifies [Ira Stoll]
- “House Committee Examines EEOC Transparency and Accountability Legislation” [On Labor]
- “The Dawn of ‘Micro-Unions': A Scary Proposition for Employers” [John G. Kruchko, Kevin B. McCoy, Ford Harrison, earlier here, etc.]
- Immigrant status and national origin discrimination: “DOJ Brings Issue of Hiring Documentation to Forefront” [Daniel Schwartz]
Organized lawyerdom is gung-ho for stringent enforcement of UPL (unauthorized practice of law) laws — their own version of occupational licensure — but consumers fare less well when paralegals, automated forms providers, accountants and others are kept from offering competitive services [George Leef, Forbes] As I’ve argued before, part of the key to sorting out the UPL issue is to distinguish between lawyerly capacities which involve the power to wield compulsion or force against others — the capacity to initiate litigation being paramount among these — and less coercive capacities such as the performing of research and giving of client advice.
If you hire some consenting but unlicensed neighbor for a not-very-big repair or construction job in California, there’s now a greater chance he or she will be headed for jail, no matter how happy you may be with the quality of the work. Gov. Jerry Brown has signed S.B. 315 (text, progress, promotional fact sheet), described by its sponsor, Sen. Ted Lieu (D-Beverly Hills), as a measure “to help curb California’s underground economy.” The measure would step up penalties and enforcement against persons who advertise for, or perform, repair and construction work with a value of $500 or more, counting parts and material as well as labor. (By its terms, the bill appears to apply to someone who offers to do a $500 job for your office that consists of procuring a $400 item and adding $100 for the labor of installing it.) First offenses are subject to six months in jail and a $5,000 fine, and subsequent offenses are treated yet more harshly.
There’s more. The bill, according to its legislative summary, “would additionally require that the enforcement division, when participating in the activities of the Joint Enforcement Strike Force on the Underground Economy, be granted free access to all places of labor,” at least in business locations. (Yes, “all”; you only thought your property was private.) And although the literature on the bill refers repeatedly to the need to curb “cheating” contractors, the penalties apply no matter how satisfied you may be with the contractor’s work.
That’s because protecting customers isn’t actually the point. Such is the political grip of occupational licensure lobbies that the bill passed unanimously in both houses of the California legislature with support from licensed repair and construction contractors. Lieu: “Groups supporting SB 315 are: Contractors State License Board (sponsor); Air Conditioning and Refrigeration Contractors Association; Air Conditioning Sheet Metal Association; American Subcontractors Association, California Inc.; California Chapters of the National Electrical Contractors Association; California Landscape Contractors Association; California Legislative Conference of the Plumbing, Heating and Piping Industry; California Professional Association of Specialty Contractors; United Contractors.”
In short, this is the sort of thing the California legislature does when it wants to think of itself as pro-business: it extends criminal liability for doing business in any other than the authorized way.
More: I’ve got some further thoughts at Cato at Liberty: “The costs of occupational licensure are many. Not least is that it gives established businesses a stake in making government more powerful and invasive.” And am I the only one who interprets the bill as aimed at Craigslist and at sharing-economy interfaces that match odd jobs with persons willing to do them, even if it is not announced as such? More on the law from Steven Greenhut (who was on the story before I was).
Is the American job market becoming less fluid, as a new paper by Steven Davis and John Haltiwanger argues, with less job-switching and fewer vacancies opening up at established employers? And to the extent this is an unwelcome trend, which policies might be contributing to it? [The Economist; some possibly contrary data points from Alex Tabarrok]