Opinionated @ CFE

Has the Internet Made Professional Licensing Obsolete?

May
17

Odds are good that if you want to practice a particular profession or trade, the state requires that you complete a specific course of training, pass some exams, and renew a license with them, sometimes requiring additional training. This is often sold as a way to ensure that everyone in a profession is competent to perform the job and helps protect the public from rank amateurs. The reality, however, is a much uglier thing revealing that industries often seek to be regulated and licensed as a way to cut down on competition and set up barriers to entry. It could be said that despite this, we still get a valuable service in weeding out those few bad actors. But with the Internet available to quickly spread both positive and negative feedback on businesses and individuals, is licensing even worth it anymore?

Consider this: when was the last time you checked the license status of your favorite business? That’s right, you probably never have. Now when was the last time you looked them up on Yelp or Foursquare? Odds are good that these privately-run sites containing voluminous user feedback are your first pick for determining if you’re going to spend your hard-earned dollars there. I’d argue that a few bad reviews on either of those services does significantly more damage than a citation from the state or a city for failure to comply with licensing requirements. This provides motivation for a business or professional to always perform well whereas a license provides just enough incentive not to do anything egregiously illegal.

My wife is finishing up cosmetology school this week, an effort that took 2000 classroom hours, $18,000 in debt, and two years of our lives. The question is why that much time, money, and effort should be a requirement for someone who had mastered the basic skills within a few months. Yes, there are some who, even after all of that, will still be offering terrible hairstyles at your local SuperCuts the rest of their lives. But why should that hold back someone who knows what they are doing?

As a legislator recent commented (and I mentioned earlier), it’s all about controlling the competition. Setting up huge barriers to entry does not ensure that the practitioners of a particular trade will be of higher quality, but it does ensure that there are fewer of them which drives up prices and stifles innovation. If someone with little training and no talent tries to make a go at it, dissatisfied customers will flock to the Internet to spread that bad rap, sinking their chances of doing much damage. On the flip side, someone with a natural knack for something can easily turn that into a lucrative profession with positive testimonials reaching thousands of potential clients.

I would encourage the Legislature to take a long look at the licenses they require and start taking them out to the woodshed. We’ve already figured out a much better way to hold bad businesses accountable for a fraction of the cost.

One Response to Has the Internet Made Professional Licensing Obsolete?

  1. Great article! I can’t wait for pre-technology, archaic ways of doing business and running a business are all taken out to the woodshed. There are far too many “norms” in society that are based off of ideologies and practices of 50+ years ago; we just accept them without thought because it’s just “how things are”. Tradition stifles advancement, and licenses are just one of the over-stifling traditions.

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