Tuesday, May 17, 2016

Barrier Height Doesn't Matter

Occupational licenses dampen employment and competition

Updated May 18, 8:30am

Last week, Maryland Gov. Larry Hogan "signed into law a bill aimed at boosting the state’s blow-dry business."
Known around the statehouse as the “License to Blow” bill, the measure creating a cosmetology license for those offering the service was pushed by Drybar, the national chain specializing in them. Founder Alli Webb joined the governor at the signing ceremony.
So a nationwide company lobbied a state legislature to create an occupational license where none had existed – and where one wasn't needed. Instead of removing all licensing and costly training requirements for a trade posing no public threat other than a bad coif and some split ends, Gov. Hogan decided to set an institutional barrier to new businesses and new employees. As the Washington Post points out in its editorial:
If we have any concern, in fact, it would be that Maryland’s new 350-hour training requirement to wash and blow-dry hair might gradually ossify into a barrier to entry against whoever comes along to disrupt blowout salons.
When investors are forced to accept a reduced value on their investments it's called a "haircut". In this case Maryland has increased the cost of getting a job for those who can least afford a trim.

See also Washington Post op-ed by Delaware Gov. Jack Markell