The Protectionist Origins of Licensure

Such inconsistencies and irrationalities are likely not the result of rational or evidence-based policy responses to real risks. Indeed, legislators rarely create licenses at the behest of consumers seeking protection from a demonstrated threat to health and safety from an occupation. Instead, they most often create licenses in response to lobbying by those already at work in an occupation and their industry associations.1

The idea that an industry would ask to be regulated may seem counterintuitive, but it makes sense given that occupational licenses primarily benefit licensed workers themselves. In serving as a bottleneck on entry into an occupation, licensing restricts the supply of practitioners, allowing those who are licensed to command more in wages and prices for their services.2 This effect has long been known to economists, starting with Adam Smith, who observed in 1776 that trades conspire to reduce the availability of skilled craftspeople in order to raise wages.3

Industries may also pursue licensure because they believe it will confer on them greater status and recognition.4 For example, in an extended defense of licensing in the interior design industry, one interior design professor asserted that her trade was no mere occupation but a profession. And because, according to this professor, “[o]ne characteristic of a profession is regulation of its practice,” licensing of her industry was necessary to elevate it to that status.5 This, of course, ignores the fact that thousands of professions—including college professor—require no license of any kind to practice.

Examples abound of industries that have demanded their own regulation. The American Society of Interior Designers (ASID), for instance, has spent decades lobbying state legislators for regulation of its industry. Though only three states and D.C. license interior designers, regulation of some type once covered almost half of the states. Instead of licensing laws, most of these states adopted “titling” laws that restricted who could call themselves “certified interior designer,” “registered interior designer” or even just “interior designer.” Advocates have typically seen such titling laws as a first step toward licensure.6

In another example of an industry-mounted campaign for licensing, the American Dietetic Association (ADA)7 first called for licensure of dietitians and nutritionists in the 1930s. It formalized this campaign during a 1944 meeting at which its president proclaimed, “[f]or the protection of the profession, there is a need for improving the status of dietitians. . . . For the protection of the profession, the term dietitian should be legally defined and state registration of dietitians required.”8 The ADA’s state affiliates intensified the campaign through the 1960s and 1970s.9 Today, almost every state regulates dietitians and nutritionists, either through licensure, certification or a restriction on the use of the title “dietitian” or the letters “RD” (which stand for “registered dietitian”).10 And, as this report finds, two states have adopted licenses for dietetic technicians, who work under dietitians.

In a more recent example, in 2005, the American Music Therapy Association and its sister organization, the Certification Board for Music Therapists, formulated the State Recognition Operational Plan “to achieve state recognition for the music therapy profession and to have [a license] required for competent practice.”11 Never mind that music therapy had been practiced freely and safely for years without licensure.

Campaigns for licensure often look similar from one industry to another. Industry associations mount coordinated letter-writing efforts to legislators asserting the need for licensing and hold industry day events at state capitols. Industry members invite legislators to their places of business or visit legislators’ offices to raise awareness of their practice and cultivate relationships that can be used when identifying potential bill sponsors. Industry associations create sample licensing legislation and provide it to legislators. When a licensing bill is introduced, industry members turn out to committee hearings en masse. Some provide testimony about the need for licensing to protect public health and safety, although they rarely present any actual evidence of such a need. Industry associations give special awards to legislators considered “friends” of the industry. And strategic campaign contributions are made.12

Once industries succeed in securing licensure, they guard it jealously against reform bills or legal challenges. These efforts frequently resemble the original campaigns for licensure. For instance, in 2011, when the Florida Legislature was considering a bill to eliminate the state’s license for interior designers, a multi-week battle ensued as ASID and its state chapter sent members to lobby aggressively for the license at the state capitol. A series of heated hearings pushed the final decision into the last few hours of the legislative session. When the final gavel fell, ASID’s anticompetitive fence remained standing.13

Go Back: Back in Business


    JOIN THE FIGHT!   Sign up for newsletters:

    JOIN THE FIGHT!