We Need Antitrust Reform—For the Little Guy

Overhauling antitrust is in vogue.  Just last month the House Judiciary Committee launched a new series of hearings to flesh out potential changes to America’s current approach to antitrust enforcement. On Thursday, the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights is having a hearing on antitrust reform. And, in a sign of the times, left-of-center advocates want to ensure antitrust enforcers adopt an “anti-racist” agenda that places marginalized communities at the front of the discussion.

So often when we hear about antitrust, we think about the government seeking to break up large corporate monopolies. Before Google and Facebook, it was Microsoft. Before that, Ma Bell. But there is plenty of anti-competitive behavior that takes place outside of the realm of big business, and there is a way to reform such behavior that also places an emphasis on protecting disadvantaged communities: Congress can overturn the “state action doctrine” as applied to occupational licensing boards. This doctrine has long allowed semi-governmental occupational licensing boards to act in a blatantly anti-competitive manner—one that has a stark and disproportionate impact on minorities, the poor, and small-business entrepreneurs. 

The overwhelming burden these occupational licensing requirements place on these groups is staggering, keeping people from earning an honest living, providing for their families, and contributing to society in the profession of their choice. These requirements include expensive schooling to certify practical skills that can be learned in other ways, or policies that limit participation in fields in the name of “safety,” when those safety issues are overblown. 

In the 1950s, 1 out of every 20 people in the United States needed a license to do his or her job. Today, it’s 1 out of every 4. From the Obama administration to President Donald Trump to President Joe Biden, virtually everyone recognizes that something is horribly amiss. Even the Federal Trade Commission (FTC) released a detailed report in 2018 highlighting the dangers of overly burdensome occupational licensing and its disproportionate negative effects.

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Comments (42)
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  • This is an underrated issue and should be a concern to everyone

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  • I’ve heard this a few times and I’ve been skeptical, but not enough to research it. Shouldn’t we expect some level of competence before you can enter it? I mean, maybe there are limited areas where you could relax standards, like barbershops or arranging flowers (though I’d probably still pick someone with a license over someone without, all else being equal). Or childcare- maybe you don’t need a bachelor’s degree in it or whatever, but you should have *some* sort of training I would think.

    But I’m inherently very suspicious of this deregulatory stuff. “The market can sort it out” sounds fine until, say, an unlicensed plumber messes your pipes and suddenly you’re out $5,000 dollars. Then no matter how much you complain, it’ll still probably take at least a few more people’s complaints to put them out of business. I don’t know if that’s a plausible example since I don’t know exactly how the plumbing industry works, and it’s slippery sloping some, but I think we should be extremely cautious before doing this type of deregulation.

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    1. I think the florist licensing is only an issue in Louisiana. Childcare is usually the daycare itself that is licensed for safety issues involving children, although you can always pay someone privately to watch only your kids without a license.
      The beautician's training and license (for cutting women's hair) probably relates to cleanliness to not spread disease between clients by using unclean tools, and dealing with the many harsh chemicals women in particular use on their hair to curl, straighten, and color and that can cause burns. The issue with hair braiding might be given some sort of exception, if that is only what she does, but I would defer to someone more familiar with what's involved with that practice.

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  • I find it ridiculous you need a license to cut hair. If you’re not reasonably good at it people won’t come back to you...that’s how markets work. Aside from professions that require the use of medications, chiropractors, lawyers etc. licensing boards are a racket. I’m not entirely sure I want the feds dipping their bloated incompetent toes into this one either.

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  • Nope nope nope.

    Yes, many states, probably most states, over-license.

    No, this is not something we should therefore ask the federal government to take over. A thousand times no.

    Because: Federalism (with its 50 laboratories of democracy).

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    1. PS: I wouldn't describe this as "antitrust reform." This is a question of civil liberties and general business regulation, not specifically unfair market competition. Ain't no "trusts" in sight.

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  • senator shoshana, we salute you...

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  • Maybe the federal government should take over occupational licensing from the States, but The Dispatch fails to show the need.

    The hair braiding arrest was 24 years ago, and Texas deregulated hair braiding 6 years ago. Someone couldn’t get a license to arrange flowers 18 years ago, so Louisiana eliminated the portion of the exam that the person flunked, and now the State is changing licensing laws. The Arizona “crackdown” was only an investigation of a complaint. The governor stopped it and ordered a review of all state licensing.

    But I like how conservatives evolve: Federal takeover bring freedom and prosperity!

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    1. I was thinking the exact same thing - wouldn't conservatives want this addressed at a state level, not federally?? Of course, I don't know anything about the two authors - maybe they're not conservatives, in which case there is no hypocrisy or evolution of views.

      I do feel strongly that way too many professions require licensure, and the difference in licensing rules from state to state can make moving difficult. Not sure of the best way to resolve it, though.

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    2. Where do read here anything about a “federal takeover” of licensing boards? I agree with the point of the article, but would strongly argue against having then feds take over licensing responsibilities. That would be foolish on many levels.

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      1. This proposes that federal law be used to preempt contrary state law regarding state licensing boards, to achieve the policy goals thought by Congress to be appropriate. That is indeed a "federal takeover," whether the federal agency giving its thumbs-up or -down is an existing one called the FTC, the DoJ, or a new agency called something else.

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      2. But of course one-size-fits-all bureaucrats at the FTC and the DOJ should sue States and/or their regulatory boards to vacate State regulations and Congress should compel them to comply with Washington DC standards for what’s reasonable and expedient. That in no way any longer can be deemed to be a federal “takeover.” Noted!

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        1. Inevitable question — do State regulations on “abortuaries” unfairly restrain trade?

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  • I'm sure some of it can probably be curtailed but to use a "conservative" argument some of those licensing boards were created for a reason. Like a lot of complaints about "regulation" they ignore the fact that some of those boards are there because there were so many bad actors in the industry that wouldn't behave themselves.

    So the next time you go for glasses or contacts and the young "optician" with the pretty smile who hasn't a lick of education or experience fits you for lenses think about that. If you want to pay for hacks and bubbly salespeople performing skilled and semi-professional jobs they are in no way qualified for go ahead but I'll wait for an actual certified, "licenced" trained optician when I go for glasses.

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      1. I would not presume that legislators ever consider the consequences of consequences. That grants them a foresight they appear incapable of.

        I think your error is in thinking that "selling" glasses and contacts is the sole function of an optician. If that were the case and in the worst case, without certification, it often is then you would be correct. In the latter case you are dealing with a sales person not an Optician.

        If I consult my wife on the WarbyParkers, 1800contacts, Costco, et al shops I can pretty much guarantee she will grumble and launch into a diatribe on customers and the quality of these products that she encounters with the expectation that she should correct the mistakes and inferior products of these outfits, gratis.

        You shouldn't feel rude in not buying from your optometrist's office. Some offices mark-up thier inventory more than others. You can comparison shop without guilt. And if you have an actual Optician and not a salesperson helping you in some other shop they may even catch a mistake in your prescription.

        I would recommend a certified Optician. Whether there ought to be a law that requires it is another matter. My only point is that there are consequences to the consumer, who lacks the requisite knowledge to make an informed decision in the marketplace, that no regulation entails.

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          1. Good points. However, referencing your "I suspect you may say the difference is that in the case of contacts and glasses I don't *know* when I've made a bad purchase, but I beg to differ. It is obvious to me when I can't see well, when my contacts don't fit right..".

            Your right. That's what I would say. Only because I've often heard it from my wife; a common example is of customers rejecting thier new bifocals because they don't see well - which means thier eyes haven't adjusted, which always takes some time. Ill-fitting frames that are too large or too small, lenses off-center or inapproriate for computer work, etc. (My wife chides me for always preferring frames too small for the lenses and my fat head). The information asymmetries can cascade from uninformed sales people to uninformed customers, the result being you won't know what you're paying for.

            Doesn't mean you'll always be wrong but you'll probably not recognize when you are.

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    2. I think the problem is when licensing is required for jobs that aren't dangerous to others (or, in many cases, it might make sense to require a licenses but the requirements for that license are ridiculously out of sync with the job itself). Like cutting hair - what's the worst that can happen from a bad haircut? What's the danger if a housepainter or interior designer isn't licensed?

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      1. I agree that some of it can be curtailed. On the other hand I can put together a sophisticated web site and buy some swatches and be in business as an " experienced" interior decorator tomorrow. No one is going to die but then that really shouldn't be the only standard.

        Don't get me wrong. There is over-regulation in a lot of areas. But often when people complain about over-regulation or that we should let the markets work thier will, I immediately think of S&L scandals; shoddy AZ construction by supposed craftsman homebuilders; infectious nail salons; derivatives; garbage AAA rated securities marked up by ratings agencies, payday loans, etc...the list is literally endless.

        While I don't begrudge folks trying to make a living it's important there is a consumer on the other end and caveat emptor does not cover all sins.

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        1. I totally get what you're saying. But while caveat emptor may not cover all sins, there has so be SOME responsibility on the consumer, right? To me, licensing should be about "we've verified that this person knows how to do the job," for jobs where not knowing how to do it poses significant risks.

          But knowing how to do the job isn't going to stop grifters or people who just can't be bothered to do it correctly. Many of the examples you cite (S&L, home construction, nail salons) already do require licensing - that isn't stopping bad things from happening in those industries. And in industries where the potential harm to the consumer is limited to losing a bit of money (interior design) or experiencing some minor inconvenience (bad haircut), I think the downsides to licensing far outweigh the upsides.

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          1. LOL Get back to me when your shy $85 and have pink hair and a mohawk.

            I get it but I'm on a tear lately about lousy service, lousy products and service and product agreements that were written by Mafia lawyers. It's gotten so much worse in the last couple decades. I don't know if that's just the corporate zeitgeist or everyone has just become greedier and less honest.

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        2. edit - "...important to remember"

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    3. That's your prerogative. Just don't use the power of the government to force me to waste my money on someone with a license that doesn't actually increase their skills. Opticians fitting you for lenses is a great example of where on the job training is more than enough to get high quality service.

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      1. Well, the optometrist can charge you the same whether they're staffed with trained or untrained personnel. Where do you think the incentive is there for the less scrupulous? And just how do you know thier qualified without some form of certification?

        My wife was an educated, licensed and certified Optician and she was constantly seeing customers walk through the door with bad prescriptions and poor quality products fitted by untrained and poorly trained personnel at discount outfits. When they complained that it would cost them to correct it they would, for some reason, never blame the first outfit for "wasting thier money".

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  • Three cheers for addressing this awful, unfair system. Could anything offer more opportunity for bipartisanship than letting more people of all kinds use their skills to improve their lives, with the special benefit of helping members of minority communities? Let’s spread the word!

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  • Awesome. Great article.

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