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The Democratic Policy Which Keeps Poor People Poor – Walter E. Williams

by | Apr 30, 2023 |

To criticize occupational licensing laws is not to argue that information about the quality of a licensee’s services is not important to consumers. However, it is by no means clear that licensing is the most effective way to provide that information. Indeed, licensing may lower the “received” quality of the service in question. By making entry costs higher, there are fewer practitioners, which, as noted above, increases the cost of the service rendered and leads some consumers to resort to do-it-yourself methods that generally results in a lower-quality end product. For example, even the electrician who failed a licensing examination, scoring 65 when a score of 70 was necessary to pass, is likely to know more about electrical work and safety measures than the average consumer who undertakes a do-it-yourself project because he cannot afford to hire a licensed practitioner.

 

In addition, higher standards imposed by licensing requirements make consumers as a whole worse off. A spectrum of quality, from high to low, is consistent with the optimal stock of goods and services. Being forced to purchase a higher-quality good or service, when a lower-quality would suffice or is what the customer wants, hurts consumers economically. For example, in the name of safety, a law could be enacted requiring that the only cars that can be sold are those whose occupants would emerge uninjured after a fifty-mile per hour collision. However, such cars would cost so much that most people could not afford to buy them. The existence of less crashworthy cars is clearly part of the optimal stock. People are always better off if they have knowledge about quality and the right to choose quality levels.

 

There are methods to produce information about quality without having the restrictions imposed by occupational licensing. Certification is one method. A practitioner can take a test and, if he scores in the 90s, have the right to declare himself a Class A practitioner; an 80, a class B practitioner; and so on. Such a method would give consumers information about quality while leaving them free to choose.

– Walter E. Williams, Ph.D., Race and Economics

How Economic Regulation Hurts the Poor – Walter E. Williams

by | Apr 29, 2023 |

In the name of protecting public health, California requires that an individual who seeks to perform any kind of hairstyling service must complete nine months (1,600 hours) of classes at a state-approved cosmetology school, at a tuition cost of at least $5,000, before taking the state licensing examination. This regimen is required even though the school curriculum and the exam bear little or no relation to the kind of services rendered by African hairstylists….

 

Restricted entry through licensing places disadvantaged people at a severe handicap without necessarily improving the quality of services received by the consumer, the ostensible beneficiary of the regulation.

 

In fact, one study showed that there is a significant relationship between occupational licensing and the number of accidental deaths by electrocution: the more stringent the state’s electrician licensing examination, the fewer the electricians and higher prices for an electrician’s services; therefore, the greater the willingness of amateurs to undertake electrical wiring tasks and risk electrocution in the process…

 

Occupational licensing also produces what authors Sidney Carroll and Robert Gaston call the “Cadillac effect.” By insisting on stiff requirements for entry, licensing provides high-quality services for high-income people. But people with low incomes, who cannot afford to pay the higher prices, are forced to do without the service, do the work themselves, or rely on lowpriced, unlicensed charlatans.

– Walter E. Williams, Ph.D., Race and Economics

My Body My Choice: Abolish Occupational Licensing

by | Apr 22, 2023 | ,

The most immediate effect of licensing is to restrict the number of practitioners because of the higher entry costs involved in meeting the qualifications of the activity. Some licenses, as in the cases of cosmeticians and barbers, require many months of schooling. Others require the installation of costly health and safety equipment. Still others demand the purchase of the license or “certificate of authorization” from an incumbent practitioner that can cost millions of dollars, as was the case when interstate trucking was highly regulated. Further, some jurisdictions issue only a fixed number of licenses or authorizations. All of these requirements raise the cost of entry, which naturally leads to a smaller number of practitioners.

Restricting that number is only the initial effect of licensing. A secondary effect is that the price of the good or service offered is higher than it would otherwise be. The result of restricting entry to a business or occupation, and probably the primary intent of licensing, is to raise the incomes of incumbent practitioners. Evidence supports this self-interested behavior: (1) most licensure laws are the result of intense lobbying by incumbents, not of consumers demanding more protection from incompetent or unscrupulous practitioners; (2) when incumbents in an unlicensed trade lobby for licensing (or when those in one already licensed lobby for higher entry requirements) they virtually always seek a “grandfather” clause that exempts them from meeting the new requirements, leaving the burden of the higher entry costs to be borne mainly by new entrants; (3) practitioner violations of the licensing codes, such as price-cutting and extra hours, are nearly always reported to the licensing board by the incumbents rather than by customers.’

– Walter E. Williams, Ph.D., Race and Economics

Progressives Are Domestic Imperialists

by | Apr 19, 2023 | ,

Progressives will fight tooth and nail to make sure every citizen gets a 1 in 100,000,000 vote between two politicians every four years since it allows the political system to reflect the wishes of the population at large.

However, when those very same voters try to make an economic exchange, the Progressive will unapologetically coercively interfere under the guise of “helping the little guy.” Want an internship to get on the job experience? Tough luck says the Progressive, if the internship does not pay $15 an hour with benefits it’s for your own good that you stay unexperienced. Want to sell goods? Not without a business or occupational license! Want to save your money instead of giving it to the IRS? Not a chance. Want to save a persons life by giving them a kidney in exchange for compensation? Help yourself to a $50,000 fine and five years in prison.

It does not occur to the Progressive that they are no different in principle than the European Colonialists/Imperialists which they so often condemn.

Leaked Pentagon Documents: A Thread

by | Apr 15, 2023 |

What follows are highlights from the trove of leaked US government documents that appeared on the internet sometime last month, including a handful of the documents themselves, reporting on the material, my own observations, as well as official statements and reactions.

 

Follow me at @TheWillPorter for more updates.

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