A couple of readers asked what I think of Georgia Secretary of State Brian Kemp’s proposed changes to the state’s occupational licensing system. Unfortunately, my answer has to be that I don’t really understand the implications of what he’s doing. It’s not clear to me whether he’s actually reducing barriers to entry into overregulated occupations or just centralizing authority over the matter in his office. The AJC’s coverage does, however, include a useful set of bullet points on what kinds of occupations are licensed in Georgia:
The largest group: 111,149 registered nurses
Smallest group: 93 athlete agents
Accountants, four types of licenses, 52,491 issued
Interior designers, 377 issued
Cemeterians, seven types of licenses, 1,151 issued
Cosmetologists, 19 types of licenses, 77,455 issued
Electrical contractors, 14 types of licenses, 30,870 issued
Foresters, 1,115 issued
Librarians, 991 issued
Occupational therapists, two types of licenses, 3,781 issued
Psychologists, 2,223 issued
Water/wastewater treatment plant operators, 13 different licenses, 9,234 issuedAs is typically the case, this tends to run the gamut. I can’t promise you that Georgia’s nurse-licensing system is ideal, but you understand why people want to see licensing in this field. At the other end of the spectrum are the cosmetologists and the interior designers. There’s no reason to worry about market failure in the provision of these kinds of services where people depend on good word of mouth and good reviews to get ahead. Athlete agents is in some ways the clearest example of a pure barrier to competition. A young person with sports talent needs an agent to make money off of it, but the basic function an agent performs is something a lot of people could do in principle. People might hire trusted friends or associates as agents. But a licensing cartel can ensure that a small set of insiders is guaranteed a cut off every athlete’s salary. The rules governing the Board of Cemetarians require that six of the seven members of the board be incumbent cemetarians. Obviously the bias of a set-up like that is going to be to defend the interests of incumbent cemetarians rather than to help consumers or advance a broad public interest.
