IF YOU’VE cut your or a family member’s hair because barber shops and salons are closed, congratulations, you’ve committed a criminal offense punishable by up to a year in prison.
In New Hampshire, cutting hair without a state license is a Class A misdemeanor. (The statute is RSA 313-A:9.)
Jason Schreiber’s fun story about people cutting their own hair while barber shops are closed is, in the eyes of the law, a documentation of rampant criminality.
It’s also a Class A misdemeanor for anyone who lacks a state license to give a manicure or pedicure, style hair, or shave someone — even for free, even within your own family.
Welcome to the bizarre world of occupational licensing.
With a workforce of less than 750,000 people, New Hampshire has 51 boards, councils or commissions that oversee licensed occupations. People usually think of doctors and nurses needing licenses to practice medicine. But New Hampshire also licenses auctioneers, geologists, landscape architects, foresters, dietitians, family mediators, court reporters and natural scientists, among many others.
Entering any of the dozens of state-licensed occupations requires hundreds, sometimes thousands, of hours of education and training, the passage of a state exam, and the payment of a licensing fee. In many cases, it’s not a civil offense to practice without a license, it’s a crime.
Having to get permission from the state before working in a certain field used to be rare. Nationwide, about one in 20 occupations required a license in 1960. Today it’s about one in four, the National Conference of State Legislatures reported in February.
This ever-expanding licensing regime costs Granite Staters millions of dollars. License fees alone are a burden. The Office of Professional Licensure reported $13.2 million in revenue in the 2019 fiscal year, up from $12 million the year before.
And licensing costs consumers, too. A 2019 study by the Federal Reserve Bank of Minneapolis concluded that the huge costs imposed by occupational licensing laws decreased the welfare of both workers and consumers.
A new study by economists from researchers at Stanford, Harvard, MIT, and Boston University found that the occupational licenses raise prices by limiting the supply of providers, but don’t produce a corresponding increase in service quality.
“Our results show that more stringent licensing regulations are associated with less competition and higher prices but not with any improvement in customer satisfaction,” the report concluded.
“In states with more stringent regulations, fewer professionals bid and prices are higher,” Stanford economist Brad Larson, an author of the study, explained.
Consumers find licenses so useless that they entirely ignore them. When hiring a professional, people prefer online ratings.
“In almost every specification we tested, we found no effect of licensing,” Larson said when the study was released. “Consumers did not appear to care at all.”
Consumers value a provider’s reputation in the marketplace far more than a bureaucratic stamp of approval. And yet the state forces everyone, consumer and practitioner, to pay higher prices for a bureaucratic licensing system consumers don’t value.
Advocates of state licensing claim that the regulations and bureaucracy are necessary to protect public health and safety. But the state licenses occupations that have little if any relationship to public health or safety and doesn’t license many that do.
Here’s a useful illustration of the randomness of state licensing laws. The contractor who built your house doesn’t need a state license, but the real estate agent who sold it to you does.
License requirements often go far beyond the minimum levels of education or training that might be necessary to protect the public. To cut hair, New Hampshire requires 800 hours of education and 1,600 hours of experience working under a licensed barber for at least two years. New York state requires less than half as many hours of education.
Licensing laws and regulations raise prices and limit supplies of services during good times. During emergencies, they can make dire situations worse. When Gov. Sununu declared his state of emergency last month, he had to relax licensing restrictions that prohibited out-of-state doctors from working in New Hampshire, limited the practice of telemedicine, and prevented pharmacists from making hand sanitizer.
Under state law, barbers can make house calls — but only if they get state approval first and do the work for charity, not for profit.
So you’re stuck cutting your own hair. Except, that’s also illegal.
Why haven’t you been arrested? The state doesn’t bother enforcing this law unless someone tries to do these things for profit — proof positive that the law exists to protect barbers and cosmetologists from competition, not the public from bad haircuts.
A lot of laws and regulations will be rethought during the next legislative session. Our ridiculous, protectionist licensing regime should be at the top of the list.