Monday, January 19, 2015

The State Legislature should began examining all licensure requirements in Tennessee. Time to end protectionism and restraint of trade.

I have been planning to write a thoughtful,  well-constructed essay on the topic of over regulation of commerce in Tennessee and why I think the State Legislature should began a process of examining all licensure  requirements in Tennessee and abolishing those that serve the primary purpose of protecting providers of a service from competition. I never got around to it, but here is an example of the problem:

NewsChannel 5 first told you how Vietnamese immigrants with little to no experience managed to get licenses from the state to do manicures, cut hair and give facials.
They all said they'd bought those licenses from Lee Phan, the owner of a Green Hills salon, paying anywhere from $2,000 to $6,500 apiece. (link)
I contend that we should only have license requirements for things that endanger the public safety and health.  Maybe there is a need for a license to dye hair. Maybe the wrong chemicals on one's hair could endanger one's health. I don't know. The worst thing that can happen with someone cutting your hair without a license however, is you get a bad hair cut. And, "bad hair cut" is often an aesthetic judgment and matter of opinion. A licensed person may also give you a "bad" haircut.

In the case above, criminal conduct occurred and license were sold to people who had not taken the training or passed the test. While I think the guilty parties should be punished, the way I see it, the primary problem is not that some people illegally work around the system and illegally get a license, but the system is guilty of prohibiting people from practicing a profession without state permission.

The State legislature should began a top to bottom review of every license issued by the State. Unless there is a health and safety reason to require a license, then no license should be required. It there is a health and safety reason, then maybe a one day class of instruction should be required rather than six months. I suspect that most of our licensing requirements serve no other purpose than to protect those already in business from competition.

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1 comment:

  1. This is one of the most important and consistently ignored issues around, both locally and statewide (and nationwide). It is also the sort of thing that people on the left and right SHOULD be able to agree needs to be addressed immediately. The only people who benefit from protectionist legislation are the entrenched industry players who are protected by it. Such legislation always causes workers to suffer and consumers to suffer, and it severely stifles innovation and entrepreneurship. Thanks for speaking up.

    -Daniel Horwitz