August 4, 2015

White House licensing report: one bad recommendation

By White House licensing report: one bad recommendation

The new report from the White House about the problems with occupational licensing laws is a great step forward, given how little attention is paid to the fundamental human right of every person to earn a living without unreasonable government interference. But among the report’s recommendations, one stands out as positively bad—in fact, positively unconstitutional.

The report suggests that state lawmakers consider several alternatives to occupational licensing laws. One of the recommendations is something known as “titling laws,” which instead of forbidding a person from practicing a business without a license, just forbid the person from calling himself a “plumber” or a “teeth whitener” without prior approval: “By restricting use of a title to workers who have achieved certain minimum requirements, certification may represent a less restrictive means of providing consumers with information regarding provider quality,” the report declares. “ Regulation through certification provides information to consumers while allowing them to choose the quality they can afford, and does so without limiting workers’ access to the occupation.”

While that’s true, titling laws also clash with the First Amendment, which forbids the government from restricting what people may call themselves. While people should not be allowed to commit fraud by calling themselves what they are not, states also should not be free to simply confiscate certain words and prohibit people from using them. When they do that, they are restricting both the right to earn a living and the right of free speech.

Not long ago, Texas made it a crime for interior designers to call themselves interior designers without first getting government approval. You could practice interior design—you just weren’t allowed to say so. The Fifth Circuit Court of Appeals struck that down as a violation of the First Amendment. But the Sixth Circuit went the other way in a case from Ohio, and upheld the state’s precious metals dealer licensing requirement which only applied to people who said they were willing to buy or sell gold. (You could buy or sell all the gold you wanted—you just couldn’t say so.) Titling laws can be just as effective as licensing laws at prohibiting legitimate competition in the service of private cartels who use the government to block entrepreneurs.

There is a role for titling requirements—but that role is already filled. All states already prohibit businesses from defrauding customers. If a person calls himself a “certified interior designer” when he isn’t, that’s already against the law. But the state should not be in the business of deciding who gets to truthfully call himself an “interior designer” in the first place. If the purpose of titling laws is to allow consumers to choose the quality they want, then the law should respect that freedom of choice by prohibiting fraud—but not confiscating certain job titles and giving them out only to those the state decides to allow.

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