How Occupational Licensing Became a Racket and Why California Is the Worst Example

From interior designers to African hair braiders, credential requirements protect incumbents not consumers

The Permission to Work

LOS ANGELES — California requires a licence to work as an interior designer in commercial settings, a process that requires a degree, work experience, and a multi-part examination. It requires a licence to practice African hair braiding, a traditional craft with no documented consumer harm from unlicensed practice. It requires a licence to be a florist in some contexts, to run an upholstery business, and to practice dozens of other occupations that the federal Institute for Justice has studied and found provide no measurable consumer protection benefit from licensing relative to simpler certification or registration systems.

The economic consequences are documented: occupational licensing restricts labour supply, raises consumer prices, reduces occupational mobility across state lines, and disproportionately burdens lower-income workers and immigrants whose credentials may not transfer. The Obama administration’s own 2015 report on occupational licensing found it had expanded substantially beyond any consumer protection rationale and called for reform. The Trump administration continued that analysis. The Biden administration funded state reform efforts. The bipartisan consensus that licensing has expanded too far has not produced reform at the scale the evidence supports.

Who Benefits

Incumbent practitioners in licensed occupations benefit from licensing requirements that restrict competition. Occupational associations lobby for licensing requirements that their members then satisfy and new entrants must meet. The California Board of Barbering and Cosmetology requires 1,500 hours of training for a cosmetology licence, more than many states require for emergency medical technicians. The hours are spent learning techniques that could be taught in a fraction of the time. The remainder represents a barrier to entry that protects existing licence holders.

The surfing industry itself is not heavily licensed — surf instructors face varying local permit requirements but no state licensing — but the broader California regulatory environment affects surf-adjacent businesses: surf shops, board shapers, coastal vendors, and beach concessions all navigate permit and licence requirements that the Institute for Justice’s licensing research documents as among the most burdensome in the nation. The burden falls hardest on those starting out, not on those already established. That is the point of it.

SOURCE: https://bohiney.com