This article speaks to a lot of what we discussed in the last chapter about the lack of economic mobility in the United States. The main argument of this article is that many jobs require certain licenses that often have fees tied to them. This additional cost in the labor market crowds out lower income individuals from finding employment in certain fields and makes it harder for people to climb out of the poverty cycle. Obviously certain standards are in place to protect consumers but that is not always the case. Most of the time it isn't actually the consumer that benefits from licensing but rather the individuals that lobbied for that licensing. The article points out that in some states there is even licensing required to be a florist which was pretty surprising to me.
https://www.economist.com/news/leaders/21737032-too-many-states-have-let-rent-seekers-run-amok-america-should-get-rid-oppressive-job-licensing
7 comments:
I have never really thought about licensing as something that could prevent economic mobility, but this article raises a really good point. Perhaps there should be some government intervention that provides funding for job training and prohibits licensing in certain markets that it might not be necessary for. This could be a small step towards growing the United States economic mobility.
Ultimately with certain jobs I believe the market will figure out the best candidates. However, there are other costs that go along with a job including the actual license. To be a doctor you have to go to medical school. Many jobs require some type of training otherwise the individual will not be successful in that job. I think the market will figure it out without licenses but I think it also depends on the type of job.
I agree with Michael here. I feel that in many fields licensing is necessary to achieve a certain quality of work. Teachers/educators are in a job market with certifications, but it seems as if those certifications in the US are not as important as similar jobs in European countries. Also, in a way, a college degree is like a license for some jobs as well.
The increasing need for licensing in our nation's job market comes with an increase in ethical standards and overall corporate regulation. Licenses like the series 6 or 7 required for financial planners help protect the consumer and society's economic awareness.
Although licensing may stunt economic mobility it also ensures regulation from the government to prevent fraud and protect both businesses and consumers. However, some skills shouldn't require licensing such as a florist. It will only increase inequality as licensing is less affordable for the poor than the rich.
I think that job licensing has more advantages than disadvantages. Licensing increased the cost of doing one job, but actually, this benefits both the business and society. It ensures that one person has skills to do the job which promises the work quality and consumers would not be disappointed by the poor quality goods or services they purchased.
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