Yglesias’ post on barber licenses is really good:
Meanwhile, though “torts and the free market will take care of it” isn’t the answer to everything, it’s surely the answer to some things. Getting some kind of training before you shave a dude with a straight razor is obviously desirable in terms of strict self-interest. If you screw it up in a serious way, you’ll face serious personal consequences and the only way to make money doing it—and we’re talking about a very modest sum of money—is to do it properly. People also ought to try to think twice about whether their views are being driven by pure status quo bias. Barbers are totally unregulated in the United Kingdom, is there some social crisis resulting from this? Barber regulations differ from state to state, are the stricter states experiencing some kind of important public health gains?
Last you really do need to look at how these things play out in practice. If you just assume optimal implementation of regulation, then regulation always looks good. But as I noted in the initial post the way this works in practice is the boards are dominated by incumbent practitioners looking to limit supply. One result is that in Michigan (and perhaps elsewhere) it’s hard for ex-convicts to get barber licenses which harms the public interest not only by raising the cost of haircuts, but by preventing people from making a legitimate living. States generally don’t grant reciprocity to other states’ licensing boards, which limits supply even though no rational person worries about state-to-state variance in barber licensing when they move to a New Place. In New Jersey, you need to take the straight razor shaving test to cut women’s hair because they’re thinking up arbitrary ways to incrementally raise the barrier to entry.
It’s worth noting that Barack Obama, back when he was a state senator in Illinois, pushed against some of this when it came to jail sentences and prohibitions on getting regulatory licenses:
Town Hall Meetings: On August 15 and 16, 2003 the North Lawndale Employment Network sponsored the annual Town Hall meeting for Congressman Danny Davis at Malcolm X College in Chicago. Brenda Palms Barber was one of the distinguished speakers for the Congressman’s opening address. Ms. Barber and Anthony Burton participated on a panel with State Senator Barack Obama and State Representative Constance Howard to discuss the federally funded Going Home program and several new laws that were passed by the state lawmakers. The lawmakers introduced to the audience several bills that had been passed, including one that would change some of the expungement laws in the State of Illinois and one bill that would allow formerly incarcerated individuals to seek regulatory licenses in several fields including barbering, nail technicians, cosmetology and dead animal removal. Under this bill, the formerly incarcerated individual would have the opportunity to seek a license once they have served their time in prison and have been given a certificate of good standing by the State of Illinois. NLEN also set up a booth at the Town Hall meeting to highlight its program and accomplishments.
Back then if you had a jail record you couldn’t receive most regulatory licenses. So if you were trying to escape from a life of crime, or even if you were tagged with a minor crime during a wayward period in your life, you would automatically have a wide variety of occupations immediately shut off from you. You couldn’t be a barber for instance. (You also probably couldn’t be a licensed fortune teller.) Whatever the idea behind this, in practice it’s going to take people at the edges and shut off a number of crucial options to them. I don’t know if this exists in most states, but it’s an obvious way to begin to push back against the worst excesses of license overkill.
So beyond just being a hassle these licenses can be a major form of explicit job segregation and can have major distributional problems associated with them.