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Wednesday, December 6, 2017

A Government That Gives Licenses Won’t Hesitate to Take Them Away

Without a license, one is no longer legally permitted to work.

Welcome to the land of opportunity, please check with the front desk to see what you may be allowed to do. That second part is often left out of most slogans, but it is something that many Americans are forced to face. A once small number of occupational licenses now cover industries like vines and it does not take a permit in arboriculture to see that the trees are beginning to suffocate.

Student Loans and Suspended Licenses

As 33 percent of the labor force hold licenses, this suffocation is best illustrated by the enforcement tactics of government officials, taken to rein in these citizens. The New York Times recently reported there are 19 states which will suspend professional licenses when people fall behind on student loan payments. To properly convey the gravity of this, it is important to take a moment to distinguish certificates from licenses.

The threat and enforcement of license suspension is suffocating some Americans.

The Bureau of Labor Statistics distinguishes certificates and licenses by the awarding and enforcing agents. Certificates are awarded by private organizations; whereas licenses are awarded by government agencies and are required by law for one to work in a field. This distinction is crucial: both may signal ability, but licenses permit practice in an otherwise restricted market. This is why the threat and enforcement of license suspension is suffocating some Americans.

Without a license, one is no longer legally permitted to work. This is to say, barbers, lawyers, doctors, nurses, and pilots (the list is extensive) who are otherwise skilled at their occupations can be removed from the legal workforce if the governing body deems their student loan repayment unsatisfactory.

In fact, according to the Louisiana State Board of Nursing, 84 nurses were threatened with suspension, of which three ultimately had their license revoked in 2016. While student loans are a complicated issue by themselves, this is no solution.

Yelp Is a Better Indicator of Skill than a License

However, this is illuminating. This is one of the dangers that can arise when the government is present within a market. Once powers are granted, they are not returned. And as we have seen here, the powers often expand.

Yelp is far more popular than any framed license.

The government has no place forbidding people from doing honest work that benefits other citizens. Furthermore, the government has no place choosing which citizens are capable of doing which jobs. Certificates and reputation are far more efficient means of guiding consumers and promoting quality services.

To the doubtful: survey your local mall or market. I believe you will find word of mouth and services such as Yelp are far more popular than any poorly framed license on the wall of a salon.

  • Nicholas Anthony is the Manager of the Cato Institute's Center for Monetary and Financial Alternatives.Originally from Baltimore, Maryland, he received a Bachelor's Degree in Economics and Business Administration from Towson University, and a Master's Degree in Economics from George Mason University.