Few regulations are more blatantly anti-competitive than occupational licensing. Incumbents place barriers to entry to keep pesky competitors out of the market. Licensed occupations also enjoy an artificial 15 percent wage premium because of the supply restrictions. The Economist recently ran a column on licensing’s rent-seeking aspects:
But the people who care most about this issue—the cartels of incumbents—lobbied the loudest. One predicted that unlicensed designers would use fabrics that might spread disease and cause 88,000 deaths a year. Another suggested, even more alarmingly, that clashing colour schemes might adversely affect “salivation”. In the early hours of May 7th the bill was defeated. If Republican majorities cannot pluck up the courage to challenge a cartel of interior designers when Florida’s unemployment rate is more than 10%, what hope has America? The Licence Raj may be here to stay.