The American Dream's Death by a Thousand Cuts

By Aaron Rice
July 28, 2021

At the Mississippi Justice Institute, one of our foundational causes is litigating to free workers from excessive licensing laws that make it exceedingly difficult for ordinary people to use their talents and earn an honest living.

We’re focused on this issue because we believe that there is inherent dignity in work; that opportunity is vital to a vibrant society; and that pursuing one’s calling is at the very heart of the American Dream.

Occupational licenses were originally intended for professions in which a mistake could pose serious health and safety risks to the public, like EMTs or school bus drivers. But they have also crept into many professions that pose no risk to the public, like florists and interior decorators. 

In the 1950s, only one out of twenty people required a government permission slip to do their job. Today, that number has skyrocketed to nearly one in three. And most of those licenses are for working class jobs. 

What has led to this explosion in occupational licensing? Counterintuitively, practitioners of various occupations lobby the government to impose regulations on them. In exchange, they gain a sense of legitimacy, monopoly use of a title, and expensive and time-consuming barriers to entry into their professions which keep many would-be competitors at bay.

The posterchild for licensing creep is the beauty industry. Because of the need for sanitation in any profession which involves touching customers, and because the work sometimes entails the use of sharp implements, chemicals, or heated appliances, practitioners of the profession claim that their work is dangerous and needs to be licensed and regulated. But the potential dangers are often wildly exaggerated by industry insiders and used to justify licensing burdens that are vastly disproportionate to the actual risks involved. 

The excessive and costly training that results from this scaremongering can make it virtually impossible for workers of modest means and young people to break into the beauty industry. A new report by the Institute for Justice shows that the average beauty school program costs $16,000 and takes about a year to complete. 

Beauty school students borrow an average of $7,100 in federal student loans, which is $600 higher than the average student. After all of that, beauty school graduates can expect to earn just $26,000 a year on average, less than restaurant cooks, janitors or concierges – none of whom are required by law to attend costly schools before working.

This type of excessive licensing has implications far beyond the beauty industry. Recent research indicates that excessive licensing laws cost our country an estimated 2.85 million jobs per year and over $200 billion annually in increased consumer costs.

Perhaps that is why reforming occupational licensing laws has become one of the few remaining bipartisan issues. In 2015, the Obama administration issued a report encouraging states to roll back unnecessary occupational licenses. In late 2020, former President Trump followed suit, issuing an executive order that similarly encouraged states to enact licensing reforms and outlined several principles for reform. And on July 9, 2021, President Biden joined the club, issuing a new executive order encouraging the Federal Trade Commission to ban unnecessary licensing restrictions. 

When President Obama, President Trump, and President Biden all agree that licensing creep is strangling the American Dream, it’s a pretty safe bet that they’re right. Mississippi is making progress in this area, but we need to continue working to eliminate anticompetitive licensing laws and let Mississippians shape their own destinies. 


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