Published: June 21, 2012
Note: This post was updated to add audio from Morning Edition.
Jestina Clayton learned how to braid hair as a girl growing up in Sierra Leone. When she was 18, she moved to America. Got married, had a couple kids, went to college.
When she graduated from college, she found that the pay from an entry-level office job would barely cover the cost of child care. So she decided to work from her home in Utah and start a hair-braiding business.
She found a little niche, braiding the hair of adopted African children. To find new business, she posted an ad on a local Web site.
Then, one day, she got an email from a stranger. "It is illegal in the state of Utah to do any form of extensions without a valid cosmetology license," the e-mail read. "Please delete your ad, or you will be reported."
It takes nearly two years of school and about $16,000 in tuition to get a cosmetology license in Utah. And schools teach little or nothing about African hair braiding.
Clayton wound up closing her business.
In this week's New York Times Magazine, I write about the spread of licensing laws like the one that forced Clayton to shut down.
In the 1950s, fewer than 5 percent of American workers needed a license to do their job. Today, about a third of workers need licenses.
The increase has been driven partly by the shift away from manufacturing jobs (which don't tend to be licensed) and toward service jobs (which often require licenses).
But it's also been driven by a push from professions themselves. Licensing rules make it harder for new people to enter a field. That's good for people who are already in the profession, because it limits competition and allows them to raise prices. So professions go to lawmakers and say: You need to regulate us.
"Everyone assumes that private interests fight like crazy not to be regulated," Charles Wheelan, who teaches public policy at the University of Chicago, told me. "But often, for businesses, regulation is your friend."
Obviously, it's in the public interest to license some professions. I sleep better at night knowing that the commercial pilots flying over my house and the infectious-disease specialist at the hospital down the street are licensed.
But taken to excess, licensing rules raise prices for consumers and make it harder for people to find work — even as they do little or nothing to protect the public.
A wide range of activists and economists are pushing to loosen licensing rules. Michelle Obama has called for states to loosen the rules for military spouses, who move frequently from state to state. The Institute for Justice, a libertarian law firm, has filed a lawsuit on Clayton's behalf as part of a broad campaign against the rules.
But the political calculus makes it nearly impossible to loosen the rules. "When you talk about reductions in licensing, you have every occupation from the plumbers to the C.P.A.'s to the electricians lining up to argue why regulation should not be reduced," Morris Kleiner, a University of Minnesota economist who studies licensing, told me.
Read the whole column here. [Copyright 2013 NPR]
STEVE INSKEEP, HOST:
From your license to drive, let's go now to a license to work. Decades ago, one in 20 workers needed licenses to do their jobs. Today, it's one in three - everyone from doctors to interior designers and manicurists, in some states. The requirements are a problem for millions of Americans seeking work. Here's Jacob Goldstein, from NPR's Planet Money team.
JACOB GOLDSTEIN, BYLINE: A few years ago, Jestina Clayton started a hair braiding business in her home in Centerville, Utah. She got to stay home with her kids. And in good months, she made enough to pay for groceries. She even put an ad on a local website. Then one day she got an email from a stranger who had seen the ad.
JESTINA CLAYTON: It said, it's illegal in the state of Utah to do any kind of extensions without a cosmetology license. And I thought, no way. I responded, I said, go ahead and report me.
GOLDSTEIN: Just to be sure, Jestina called the state licensing office. She found out that she did need a license - and that to get it, she'd have to spend more than a year in cosmetology school. Tuition would cost $16,000 or more. And the schools taught little or nothing about the African-style hair braiding that Jestina learned growing up in Sierra Leone.
CLAYTON: I was really upset. You know, who am I threatening here? I did a lot of talking to my husband. He listened.
GOLDSTEIN: What happened to Jestina happens all the time, with all different kinds of jobs, all over the country. There's this patchwork quilt of state licensing laws that covers hundreds of different professions. The basic idea is to protect consumers. But Charles Wheelan, who teaches public policy at the University of Chicago, says that for professionals, licensing rules serve another purpose.
CHARLES WHEELAN: It's also a way to make your competition go away.
GOLDSTEIN: Wheelan says when you require lots of classes and tests to get a license, fewer people enter the field. That means less competition for people who are already in the profession. It means they get more customers. And it means they can charge more. In other words, these professionals want more government regulation.
Here's how they get it.
WHEELAN: They go to the legislature and they essentially say, we're really dangerous. You need to protect the public from us.
MYRA IRIZARRY: There could be open wounds. There could be cuts. Pathogens could be transmitted.
GOLDSTEIN: That's Myra Irizarry of the Professional Beauty Association, a professional group that says strict licensing laws for cosmetologists are needed to protect the public.
IRIZARRY: We have people that are practicing this field that could really - you do wonderful things for your appearance and for your face and for your skin, but also could harm you.
GOLDSTEIN: Charles Wheelan doesn't buy this argument when it comes to hair braiding. But he does say licensing has its place.
WHEELAN: I'm not averse to licensing some professions. I just think that we've done it so horribly and so scattershot, in terms of who gets licensed and what they have to do to become licensed, that it's become kind of a monster.
GOLDSTEIN: A monster, Wheelan says, that makes it harder for people to find jobs. There are 13 million unemployed Americans right now. Licensing rules that force them to take classes and tests that they may not need only make it harder for them to find work.
In the past few years, there has been a push to loosen licensing rules. A libertarian group called the Institute for Justice has filed lawsuits challenging rules in several states and is representing Jestina Clayton in Utah. And Alan Krueger, an economic adviser to President Obama, has called for states to get rid of licensing rules that do more harm than good.
But the people who care most about licensing rules are the professional groups being regulated. Jestina Clayton saw this first hand. A legislator in Utah had introduced a bill to allow African-style hair braiding without a license. Jestina went to testify at a hearing, and found the room packed with cosmetologists and cosmetology students.
CLAYTON: Apparently, they give them the day off from school so they could come and protest this bill. It was intense.
GOLDSTEIN: The cosmetologists succeeded. It's still illegal in Utah to braid hair without a license.
Jacob Goldstein, NPR News.
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