Skip to main content

Protecting Unlicensed Occupations from Government-Sanctioned Cartels


Great care must be taken in repealing occupational licensing laws. No, not care in which licensing regimes are repealed or how quickly we are rid of them. They can all go, post haste (yes, that includes doctors and lawyers). Licensing hurts the economy to the tune of $200 Billion each year. A practitioner in a licensed field can expect to charge an unearned premium of 10-12 percent over his unlicensed peers. And licensing has shown almost no benefits in terms of improving public safety. The small benefits - such as a shorthand indicating which practitioners have received a minimum amount of training - could be better achieved through private certification without the economic harms visited by licensing regimes.  

No, the care that must be taken is in the unintended consequences of repealing individual licenses. There are times when groups of practitioners will ask the government to regulate them not because they want those sweet monopoly profits (though surely they realize such a fringe benefit) but because they fear that without such a license they will be swept into another licensed profession’s scope of practice. Many licensing boards, especially those covering a profession in which the scope of practice is closely related to the scope of practice of other licensed professions contain special waivers for other licensed professionals. So a licensed physician, social worker, or counselor, working within their sphere of expertise, will not be held to have practiced some other occupation unlicensed. 

If the legislature were to eliminate chiropractic licenses tomorrow, by Wednesday the Oklahoma Medical Board would be overrun with complaints about unlicensed practice of medicine. By Friday Physical Therapists would probably be circling as well. Both groups would see a way to eliminate a whole class of competitors, which would allow them to charge higher rates.

Since most of the state licensing boards are dominated by practitioners fears of being swallowed up by a competing board may be justified. It’s easy to imagine a group of clinical psychologists getting together and declaring that only they have the requisite knowledge to practice music therapy, given the known effects of music on mood and brain activity. Who would want to argue with such an esteemed group of experts? Especially when the penalty for unlawful practice of psychiatry comes at a price of $500 and up to 6 months in jail per day of violation.

As the legislature looks to repeal licensing regimes, it should consider these scope of practice issues. Rather than leaving a profession wholly unprotected in the face of a more powerful state-granted cartel (one recognizes their power from the fact that they will remain in place, while the less powerful regime is properly disposed of), the legislature should consider carving out the profession as not falling under the scope of practice of the powerful cartel. 

This protection should be easy to give. The licensed occupation’s definition and scope of practice could be left in place. The remaining law would then be replaced with a simple statement that anyone performing the functions described shall not be guilty of practicing any other licensed occupation without a license. To ensure that overeager cartel bosses don’t encroach, the law should indicate that the definition is to be construed broadly, so that that only someone operating well outside that definition might be violating the protectionist regime of the still-licensed occupation. 

Of course, none of this protection would be necessary if the legislature would adopt wholesale occupational licensing reform. 1889 has proposed a private certification law that would allow competing groups (competing is a key word here) to certify a given industry. Anyone who is certified by such a group is exempted from state licensure laws.

In the mean time, safeguarding newly-unlicensed practitioners will allow Oklahoma consumers to realize the benefits of the deregulated profession: a significant discount on valuable services.

Mike Davis is Research Fellow at 1889 Institute. He can be reached at mdavis@1889institute.org

The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.

Popular posts from this blog

The Truth About COVID-19: Better Than You Think

As the media turns its attention back to COVID-19, there is a renewed push to shut down the economy. Some states have even begun to scale back reopening plans for their economies; others continue to delay opening. It is essential to look past their catastrophizing and focus on the facts of COVID-19. One fact to consider: while testing has risen 23%, the rate of positive results has only risen 1.3 percentage points to 6.2%. Even as alarmists point to the rise in cases, they still admit that the boost in testing has played a role in the rise in the total number of known cases. Therefore, the total number of positive cases is not of much use in this case, as it only paints a partial picture. The rate of increase in total positive cases is a more meaningful measure, and it has barely increased. Even more important is who is getting infected. The data show that recent cases are primarily younger people. But that’s a good thing; these are precisely the people that are key to building herd ...

Official Statement of 1889 Institute: Open Oklahoma’s Schools

Byron Schlomach, director of the 1889 Institute, issued the following statement today regarding the ongoing school closures throughout Oklahoma as a result of the Oklahoma State Board of Education’s response to the COVID-19 virus: Way back in March, the 1889 Institute first protested school closings based on then-existing evidence that school-age children are not prone to the disease, evidence confirmed in intervening months. This evidence, combined with the failure of school districts to provide a rigorous online education and the hardship on two-earner families created by distance learning, makes it clear that closing the schools has, indeed, been a policy error of epic proportions. To that end, 1889 Institute is calling on the Board of Education to rescind its current guidance that recommends such closures and reopen traditional brick and mortar schools immediately following the upcoming Christmas break. Not doing so is a disservice to both students and parents and will have a last...

Present Reforms to Keep the Ghost of State Questions Past from Creating Future Headaches

Oklahoma, like many western states, allows its citizens to directly participate in the democratic process through citizen initiatives and referendums. In a referendum, the legislature directs a question to the people — usually to modify the state constitution, since the legislature can change statutes itself. An initiative requires no legislative involvement, but is initiated by the people via signature gathering, and can be used to modify statute or amend the constitution. Collectively, the initiatives and referendums that make it onto the ballot are known as State Questions.   Recently, there have been calls to make it more difficult to amend the constitution. At least two proposals are being discussed. One would diversify the signature requirement by demanding that a proportional amount of signatures come from each region of the state. The other would require a sixty percent majority to adopt a constitutional amendment rather than the fifty percent plus one currently in place. ...

I Abstain: Why I Refuse to Vote in Judicial Retention Elections

Over a million Oklahomans voted in the recent November 3rd election. For most, the presidential race between Joe Biden and Donald Trump is what drove them to the polls. However, some were likely confused when they reached the bottom portion of their ballot marked “Judicial Retention Elections.” What are judicial retention elections? Every two years, certain judges are placed on the ballot for a simple yes/no retention vote. These elections stem from Oklahoma’s   judicial selection method , and ask voters whether they want to keep, or retain, certain judges. Elections are staggered so judges only face retention every six years. Many claim that the merit selection method is a more sophisticated, apolitical judicial selection method than the federal model or the partisan election model, but in reality it is   much worse   than either of the two. In essence, the retention vote was a patronizing attempt to make “merit” selection more palatable to   voters back in the...