Occupational licensing laws kill jobs and shut entrepreneurs with modest means out of the job market due to costly requirements, according to a report from the Institute for Justice.
The report, which focuses on hair braiding, evaluates whether the act of braiding hair poses any risks that would justify requiring an occupational license and whether these licenses create barriers that keep people out of work.
Currently, there are 16 states in the United States that require hair braiders to get a cosmetology license, which involves spending between 1,000 and 2,100 hours in training and thousands of dollars on tuition. In these classes, students have to learn how to use chemical treatments and how to cut hair, tasks that have nothing to do with braiding hair.
Additionally, 14 states, along with the District of Columbia, require hair braiders to acquire a specialized license. In Mississippi and Iowa, hair braiders have to register with the state. Specialty licenses require 600 hours of classes and can cost thousands of dollars.
While proponents of occupational licensing say it protects consumers’ health and safety from unskilled practitioners, the report finds that there is little evidence that this holds true.
"Often learned in childhood and honed over the years of practice, braiding is time tested and all natural," the report states. "In fact, it is typically categorized as ‘natural hair care’ because it involves no cutting, dyeing, application of heat or use of caustic chemicals."
In seven years, there were only 130 complaints from nine states and the District of Columbia and most of the complaints had nothing to do with health or safety, but were comments regarding whether or not the hair braider was licensed, according to the report.
"Complaints against braiders are so rare that a person is 2.5 times more likely to get audited by the IRS (8.6 in 1,000) than a licensed or registered braider is to receive a complaint of any kind (3.4 in 1,000)," the report states. "Receiving a complaint filed by a consumer is even rarer (0.035 in 1,000)."
The report also finds that these requirements kill jobs and prevent hair braiders with less capital from entering the job market.
"To get a license, workers may be required to complete hours of education or training, pay fees, pass exams, or meet other qualifications such as reaching a minimum age, becoming bonded or passing a background check," the report states. "Such requirements are particularly burdensome for lower-income and less-educated individuals, minorities, immigrants and others trying to gain a foothold on the economic ladder."
Industry insiders often promote occupational licensing since it protects established businesses from increased competition by blocking new entrants. In addition, some institutions, such as cosmetology schools stand to benefit from occupational licenses because hair braiders will have to pay tuition at their schools.
"Today, cosmetology insiders use their government-enforced cartel to require hair braiders in many states to obtain a full cosmetology license—even though cosmetology was not developed with braiders or Afro-textured hair in mind and traditionally cosmetology programs have rarely taught braiding," the report states.
"Licensing laws for hair braiders are just one example of states requiring government permission slips to work," said Angela C. Erickson, senior research analyst at the Institute for Justice. "More Americans than ever now need a license to work, and this is just the latest research to show that the costs of such licensing often outweigh any purported benefits."