Tag Archives: restricting competition

Regulation of the Day 180: Braiding Hair

Businesses often use regulations as a cudgel to bludgeon their competitors. Occupational licensing is one of the most-abused types of regulation. John Stossel’s latest column shows how by telling the story of Jestina Clayton, an immigrant from Africa who braids hair for a living.

Her customers are satisfied. But now her competitors want her to take 2,000 hours of classes and spend thousands of dollars to get a cosmetology license. This even though braiding is the only service Jestina offers. And because the her competitors are the very people who grant or deny licenses, it will be easy for them to keep entrepreneurs like Jestina out of business even after she completes the licensing requirements.

Jestina’s story repeats itself every day in any number of occupations. Stossel writes:

Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it’s one in three. We lose some freedom every day.

“Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers,” Avelar said. “(Licensing laws) just help entrenched businesses keep out competition.”

This is not what America was supposed to be.

He’s right.

Regulation of the Day 79: Auctioneers in Alabama

It is illegal to conduct an auction without a license in Alabama. Unlicensed auctioneers can be punished with fines of up to $500.

Applicants must pay nearly a thousand dollars for 85 hours of coursework. 8 additional hours are required every two years to keep the license.

It’s worth asking: Does this benefit anyone besides the people teaching the courses and the auctioneers who get to limit the amount of competition they have to face?