Democrats snub working poor by killing licensing reform

By Steven Greenhut
May 8, 2017

SACRAMENTO – California Democrats prattle endlessly about helping the working poor, but their latest vote against a bill that would tangibly help financially struggling people shows that Democratic leaders are more interested in serving their real constituencies: state bureaucracies, public-sector unions and the interest groups that want to keep out the competition.

The latest example involves occupational-licensing reform. It’s one of those rare issues that should have widespread bipartisan support. Think tanks on the left and right agree that burdensome and costly rules for getting a license to perform certain jobs (barbers, makeup artists, locksmiths, speech pathologists, funeral directors, etc.) make it inordinately difficult to enter the job market, especially for people of modest means.

The stated purpose of the rules, which often require hundreds of hours of training and thousands of dollars in coursework, is to promote public health and safety. But the rules often have little relevance to the job at hand, and they typically are promoted by unions and trade associations (and the politicians they support) that want to use the political system to artificially increase prices and profits. There’s no evidence such barriers enhance safety.

One of the most notorious examples involves African-style hair-braiding, which is a natural process that doesn’t involve the use of dyes or chemicals and doesn’t even involve hair cutting. Yet in more than half of the states these hair-braiders are required to get a cosmetology license to learn about things that are unrelated to braiding. As a result, braiders are pushed into the underground economy.

In 1999, a federal court ruled that California’s licensing requirements for hair-braiders were unconstitutional because of that disconnect between the required training and the actual braiding process. The Legislature responded by exempting hair-braiders from licensing laws. “It was forced into it by a federal lawsuit, but California has kept its regulatory mitts off of hair-braiders,” said Paul Avelar, a senior attorney with the Institute for Justice (IJ), which had filed that lawsuit.

As these braiders have flourished in the ensuing 18 years, there have been no rash of health or safety problems. It’s allowed people to publicly offer their services without worrying about sting operations, fines and arrests. It’s been an unquestionably good thing for this one field – but what about the dozens of other fields still encumbered by Byzantine rules?

An IJ study from 2010 found that California had the seventh-most burdensome licensing regulations in the nation. Our state requires licenses for 62 low- to moderate-income professions. Only a handful of those were the target of Senate Bill 247.

Introduced by Sen. John Moorlach, R-Costa Mesa, and sponsored by the Pacific Legal Foundation, the bill would have repealed “the requirements for an individual to obtain a license to perform the following activities: fitting or selling hearing aids, locksmithing, barbering or the application of makeup, disposing of cremated human remains, and performing custom upholstery services,” according to the Senate bill analysis. It would also have modified “the regulation of certain landscapers, tree service contractors, and private investigators.”

Pacific Legal Foundation made the obvious case: “Occupational licensing laws exist, in theory, to protect the public by requiring certain professions obtain a government license before legally working in California. However, many current licensing laws do little to protect the public and are an artificial barrier for middle class jobs. By lowering and repealing the barriers to entry for these professions, more Californians can earn a living doing what they want to do without government interference that does little to serve the public.”

Opponents came from – you guessed it – a prominent union and trade groups that represent people who work in some of the fields that would have been affected by the reform. The Hearing Healthcare Providers of California, for instance, defended current licensing requirements because “the proper fitting of a hearing aid requires close examinations of the ear into the canal, and that these devices can be extremely costly, consumers need the assurance that it is a licensed and qualified professional who is treating their hearing loss.” The bill also was opposed by the California Nurses Association, a union that represents some public-sector workers.

Seriously, we need a state licensing bureaucracy because fitting hearing aids involves examining the ear canal? There are plenty of ways to get trained for these jobs, and it’s clear that much of the licensing process has little to do with proper training.

Nevertheless, the Senate committee rejected the bill on a 6-2 party line vote, with only the two Republicans favoring it. The bill will be reconsidered by another committee, but is dead on arrival. The staff felt the bill was unnecessary because of the annual “sunset review” of Department of Consumer Affairs, which functions to see if any regulations should be changed. Never mind that the review process is pro forma and rarely results in any regulatory rollbacks.

Apparently missing the whole point of the measure, the committee report opined: “It is unclear at this point why this bill seeks to eliminate occupational licensing laws that promote and protect the public.” Well, the staff that wrote that sentence could have read the legislation or some of the reports its author cited for a clear rationale.

California has the nation’s highest poverty rates, according to a new Census Bureau standard that includes cost-of-living factors. A good starting place to address that problem is to chip away at unnecessary barriers to work. Trade groups, however, recognize that the best way to inflate their members’ pay is to raise the cost of entry for others – and the more fields regulated this way, the more it keeps poor people in the welfare lines.

“One out of every five Californians must receive permission from the government to work,” explained a 2016 report from the state’s official watchdog agency, the Little Hoover Commission. “What once was a tool for consumer protection, particularly in the healing arts professions, is now a vehicle to promote a multitude of other goals. These include professionalism of occupations, standardization of services, a guarantee of quality and a means of limiting competition among practitioners, among others.”

Consider the freedom issue there too. We need to ask the government for permission to work?

The Little Hoover study found that the laws succeeded mainly in keeping “Californians from working, particularly harder-to-employ groups such as former offenders and those trained or educated outside of California, including veterans, military spouses and foreign-trained workers.” The problem is particularly acute for ex-offenders who often are barred from entering a variety of fairly low-skill professions by licensing rules that forbid them from entering the market.

Such concerns prompted even the Democratic Obama administration to call for far-reaching licensing reforms, yet California’s Democrats don’t even seem to understand the point of such efforts. Or maybe they just won’t let themselves understand the argument given their political alliances. At any rate, they should at least stop pretending to care about the poor if they can’t embrace simple, cost-free policies that get poor Californians working.

Steven Greenhut is contributing editor for the California Policy Center. He is Western region director for the R Street Institute.

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