Walter Williams Explains How Licensing Hurts the Poor and Minorities

Milwaukee Taxis 2 20121030_102516 - Copy

Economist Walter E. Williams’ latest column condemned laws and regulations that create barriers to entry for economic opportunity. According to Williams, these laws often place the greatest burden on “those who can be described as poor, latecomers, discriminated-against and politically weak.” His column praised the Institute for Justice for combatting licensing requirements for taxi drivers and African-style hair braiders:

My colleagues at the Institute for Justice have waged war against economic restrictions since 1991 and have had a number of important successes. Among hair braiders the Institute for Justice has liberated from onerous regulations are those in Arkansas, California, Iowa, Washington and Missouri. The institute has successfully waged war against taxi licensing and other transportation restrictions in Bowling Green, Milwaukee, Chicago, Florida, Cincinnati, Denver, Indianapolis, Las Vegas, Minneapolis and elsewhere.

Williams discussed how taxi medallions are valued at extremely onerous prices, such as $270,000 in Chicago and about $200,000 in Boston, both as of 2015. Most people cannot afford these medallions, especially if they are unable to obtain a loan. But thanks to the rise of Uber and other ride-hailing services, medallions have lost significant value. Ultimately, the best solution would be for cities to abandon these medallions and embrace a freer market for transportation services.

Strict regulations also hinder hair braiders. According to IJ’s report Barriers to Braiding, 16 states require hair braiders to get a cosmetology license to practice braiding, even though most cosmetology schools don’t teach hair braiding. Obtaining that license can easily top $14,000 in some states.

Taxi medallions and licensing laws are just two of the most pernicious restrictions on the right to earn an honest living. By imposing such a costly burden, these types of regulations prevent too many Americans from taking their first steps up the economic ladder.

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