Juan Macias was working hard outside a UC Berkeley football game selling hotdogs when a campus police officer told him his cart was illegal. What Juan did wrong is that he did not have a license. Rather than tell Juan to just leave, the officer demanded to see Juans’s wallet and proceeded to take out all of Juan’s cash, $60 dollars, saying it was “suspected proceeds” from an illegal act. The police do this to “punish such vendors and protect public health”. This is occupational licensing. Now, Juan Macias has received a crowdfunded $87,000.00 to pay his legal fees and start a new business
Occupational licensing is tied to prolonged poverty. Research by Professor Steven Horwitz at the Mercatus Research Center found that licensing fees and business regulations are one of the primary reasons why those below the poverty line lack upward mobility. UC Berkeley, CA could take a bold stand in defense of the financially vulnerable by relaxing their licensing fees. UC Berkeley could empower the financially vulnerable to provide for their families simply by making it easier for entrepreneurs to supplement their income.
Occupational licensing tries to keep people safe, but it only hurts the people who need work. There are better ways to keep people safe and occupational licensing does too much harm to the people who need to feed their families and make money to get away from poverty.
Only 15% of Hispanic males have licenses, versus the 27% of non-Hispanic white males. The Institute for Justice has found that the average cost for just getting a license is $209 dollars in fees, at least one exam, and approximately nine months of education and training. Without the money, Juan would have had no time and no ability to get those licenses. He only had $60.00 dollars in his wallet and he needed an interpreter to talk about his experience with the campus police.
But, is licensing people the best way to keep them safe? The reason we say we make people get licenses is to, “to protect health, prevent disease, and promote healthy practices among the public” but a 2014 CDC study conducted on food poisoning incidents found that food poisoning incidents at restaurants were nearly double that of food poisoning incidents taking place at private homes.
And all of these food poisoning incidents at restaurants were happening under licensed businesses. If licensed food venues are more likely to have food poisoning, occupational licensing does not keep people safer.
Loosening occupational licenses have been one of the hardest things to achieve. Connecticut, Florida, Indiana, Michigan, Minnesota Missouri, New Hampshire, North Carolina, and Texas have all tried to stop or lighten up occupational licensing, but they all failed. Even though most of the efforts were raised by Republicans, it was not Democrats who fought them the hardest. It was businesses with licenses.
The Institute for Justice found that when Louisianan licensed florists were put in charge of passing and failing new florists, fewer than 50% were likely to pass. This meant that a person was more likely to pass the Bar and become a lawyer than becoming a florist, a person who arranges flowers into beautiful bouquets. As a florist put it, “You can’t really hurt anybody with a flower.”
Occupational licensing has become a bigger issue than public safety, which it admittedly fails to accomplish. Licensing has become a system in which those who have licenses can keep people out of the market. The people who we want to get jobs are literally being fined and arrested.
Occupational licensing is not a necessary part of the public good. Legislators can take this challenge as the opportunity to alter and relax occupational licensing to both cut costs and boost social services to remedy issues. Entrusting the public with more choices allows the people to become active participants in their communities.
