A new approach for occupational licensing in Wisconsin

By IKE BRANNON | April 7, 2017

A decade ago, an errant pass in a basketball game hit my thumb hard along the nail. After a couple days of intense pain, the thumbnail fell off and then grew back misshapen. The injury killed a portion of the nail bed. As afflictions go, this is pretty minor but is a tad grotesque and makes a few tasks a bit more difficult.

An orthopedic surgeon suggested I either have surgery — which may not work or be covered by insurance — or have the nail permanently removed for aesthetic reasons. I opted to leave it alone and began getting manicures regularly to keep the nail under control.

A couple of months ago, the owner of the salon I frequent asked if a new employee could do my manicure. The issue was that he spoke no English and had no license, but the owner assured me that the worker had been doing manicures for years in Vietnam and was quite talented. I agreed.

The owner explained my thumbnail issue to him, and he spent several minutes on the digit. A few days later, to my surprise, the dead nail bed began growing again. The nail now looks almost normal.

The story of my healing thumbnail begs a question: To what extent should states license manicurists, or professions that have little to do with health and safety. Wisconsin (and many other states) requires graduation from an accredited institution that teaches the trade and requires hundreds of hours of experience. Wisconsin does not automatically recognize licenses issued by another state or country, either. In other words, there would be no clear path for this manicurist to legally practice his profession in the state.

Wisconsin currently licenses hundreds of professions: Some of those are unobjectionable — most people want doctors and anesthetists to undergo a licensing regime, for instance.

But other licenses are problematic: For instance, the state requires interior designers to be licensed. Do we really need to be protected from a rogue designer who might do damage to the color scheme of our home? The same question can be asked of manicurists, barbers, aestheticians, auctioneers and several other professions that have little to do with health or safety.

The harm in excessive licensing is twofold.

First, people with an aptitude for a profession but without the means to take the classes to obtain the license are effectively shut out of a way to earn a decent living. A license for an interior designer, for instance, requires six years of training, including at least two years of school.

Second, the higher wages from excessive licensing translate to higher costs for these services. A manicure in Oshkosh — my former home — costs more than it does in Washington. D.C., where I currently reside. While not everyone might need or want such services, the disparity in prices between my high-cost current home and my former residence suggests that someone’s getting a bad deal.

A study I wrote with my colleague Logan Albright, "Who are we really protecting?," published recently by the Wisconsin Policy Research Institute examines the inexorable expansion of licensing in the state — driven both by the expansion of the service sector as well as the increase in the number of occupations in the state requiring a license. We suggest that in an economy where states have been ratcheting up efforts to attract jobs and boost economic growth, it is time for Wisconsin to examine the current licensing regime and think cogently about which tasks merit licensing and which can do without.

Such an exercise should be a bipartisan affair: Unnecessary occupational licensing hurts the entire state, but those who come from low-income households — and may lack the means to obtain the training to get such jobs — suffer the most.

Gov. Scott Walker and the Legislature have announced they will look at the issue. There’s a lot to look at, we submit.

Ike Brannon is president of the consulting firm Capital Policy Analytics in Washington, D.C. He is a former economics professor at the University of Wisconsin-Oshkosh. Read "Who are we really protecting?" here.

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