A Rare California Victory for Cutting Government Regulations

While criticizing California’s blue state agenda from a limited-government perspective requires little effort, it can be a wearying exercise. So it’s particularly refreshing when the legislature passes, and the governor signs, a bill that eases up on the bureaucracy. Even when the new law doesn’t do much. Because it creates hope that the first of many barriers has been broken.

Senate Bill 803 is no political convulsion, opening a wide avenue of opportunity. It merely cuts the number of hours of training cosmetologists and barbers have to put in before they’re considered by the state qualified to do their jobs from 1,600 for the latter and 1,500 for the former to 1,000 each. It’s a small crack in a wall that needs to be broken wide open.

In 2017, the Institute for Justice published “License to Work“, which measured the burdens that occupational licensing imposed on more than 100 low- and moderate-income workers. It identified California as “the most widely and onerously licensed state,” its “licensing environment for workers in lower-income occupations” the worst in the nation. The report also noted it was one of five states in which governors had in recent years “vetoed bills proposing new occupational regulations or urged broader reform.”

More Than 165 Years of Accumulated Regulations

It’s fitting that California has no idea how many occupations it licenses. When the Little Hoover Commission was putting together a licensing study a few years back, no one from the state was able to provide a list of all the licensed occupations. Though licensing “is heavily concentrated within the Department of Consumer Affairs,” says the commission, the “system” is a jumble of boards “scattered throughout other government departments and agencies. “More than 165 years of accumulated regulations” has created “a nearly impenetrable thicket of bureaucracy.”

There is no uniformity or single guiding principle that determines training standards. Consequently, requirements are uncoordinated. The hours of training necessary to obtain a license range from 1,000 for a cosmetologist, to 160 for an emergency medical technician. Meanwhile, the state doesn’t require a crane operator to have any training. But tree trimmers must have 1,460 days, or four years of experience, to operate.

Fees are random, too. There is no cost to be licensed as a dental assistant, but an upholsterer has to pay $360; a door repair contractor $579.

Commission says Entrepreneurship Suffers

These barriers depress job growth in licensed occupations, producing a government-caused shortage of providers. In turn, prices to rise, often without improvements in the quality of services. Entrepreneurship also suffers, says the Little Hoover Commission, because the system standardizes services. Small businesses are harmed, as well.

The commission further notes that “occupational licensing hurts those at the bottom of the economic ladder twice: first by imposing significant costs on them should they try to enter a licensed occupation and second by pricing the services provided by licensed professionals out of reach.” This is the old story of government intervention landing the hardest on the most economically vulnerable.

The argument for occupational licensing is consumer protection. But according to Little Hoover, “there is not necessarily a corresponding increase in consumer safety due to licensing.” In fact, research indicates “that for many occupations, bad outcomes did not increase when licensing restrictions were relaxed to make it easier to enter those occupations.”

Politics Drives the Process

So why does the regime exist? Politics, says the commission, rather than “a thoughtful examination of how best to protect consumers,” drive the process. Consumers aren’t asking for licensing regulations – it’s the practitioners themselves, who know that limiting entry into their fields means higher wages for them.

SB 803 alone won’t mean much to consumers and licensed workers. But it should inspire “a thoughtful examination” of the licensing process that will produce further reforms.

About the Author

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.