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Drew Cline: Occupational licensing reform would lift regulatory burdens

By DREW CLINE
January 17. 2018 6:17PM




Here's a bit of trivia: New Hampshire’s tallest building was erected by a general contractor unlicensed by the state of New Hampshire. Before you decide to avoid forever Manchester’s 20-story City Hall Plaza, you should know no building in the state, including your house, was built by a state-licensed general contractor — because New Hampshire doesn’t license general contractors.

The state doesn’t license carpenters, auto mechanics, welders or asphalt layers either. Yet your home does not fall apart, commercial buildings don’t tumble down, roads don’t dissolve in the rain.

It turns out that for many occupations that pose significant potential risks to others, the marketplace provides pretty powerful incentives for providers not to kill their customers.

New Hampshire does have a long list of occupations that require a government license. It includes animal breeders, auctioneers, hunting and fishing guides, landscapers, makeup artists, manicurists, midwives, real estate brokers, and the much-feared lightning rod salesman.

In New Hampshire, anyone can call himself a carpenter and start building decks, but it is a criminal offense to call yourself an auctioneer or to offer auctioneering services for compensation unless you have a state license. Seriously. Unlicensed auctioneering is a crime.

It’s also a crime to sell real estate or lightning rods without a state license.

If this sounds to you like it makes no sense, that’s because it makes no sense.

Contrary to popular belief, occupational licenses are not really about protecting public health and safety. Primarily, they exist to limit competition. Licensing restricts competition, driving up costs to consumers for the benefit of those who are already in the field.

When you showered today, did you wash your hair? If so, you engaged in an activity so dangerous that your state government requires anyone practicing it for pay to be registered.

Under state law, a licensed barber or cosmetologist may employ someone to wash hair. That person “may perform only the following functions: shampooing, rinsing and removing rollers or permanent rods, rinsing treated or untreated hair, and other cleansing or sink-related functions not requiring the skill of a cosmetologist or barber.”

A “shampoo assistant apprentice” is an occupational category in state law. It requires registration and the payment of a $25 fee — just to wash hair. Anyone who hires an unregistered shampoo assistant apprentice can be found guilty of a class A misdemeanor. Class A misdemeanors are punishable by up to a year in jail and a fine of up to $2,000.

This isn’t just crazy. This is a whole quilt of crazy.

New Hampshire’s crazy quilt of occupational licensing regulations makes it harder for average Granite Staters to find work, and it artificially raises prices for consumers. The state needs to cut up this smothering blanket and free the economic activity it suppresses.

Rep. Bill Ohm, R-Nashua, has introduced a bill to slowly unravel these opportunity-crushing regulations. House Bill 1685 asserts that “it is the policy of the state that the right of an individual to pursue an occupation is a fundamental right, and that where the state finds it necessary to displace competition, it will use the least restrictive regulation to protect consumers from present, significant, and substantiated harms that threaten public health and safety.”

Granted, the “fundamental right” concept was expressed more eloquently by Thomas Jefferson when he wrote that the pursuit of happiness was an unalienable right endowed by our creator. But it gets the job done.

HB 1685 does not create a new state department or agency, as some critics seem to believe. It creates a legislative commission to study occupational licenses and recommend fixes to laws and regulations so they adhere to the “least restrictive” policy statement quoted above.

The commission is the exact opposite of a burden on the people. It would relieve a burden placed on them by legislators working in consort with businesses to artificially limit competition and raise prices.

HB 1685 does not eliminate the practice of regulating occupations. The state will still have a role in imposing legitimate health and safety measures. HB 1685 merely creates a system that enforces the simplification of occupational regulations.

The great French writer Antoine de Saint-Exupery hit on an organizational truth when he wrote, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.

Apply that principle to occupational licensing regulations, and New Hampshire will see an increase in economic opportunity without compromising health or safety.

Andrew Cline is interim president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.


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