Rebecca Allensworth, a Vanderbilt law professor and author of "The Licensing Racket," critiques the pervasive system of professional licensing in the U.S. She reveals how licensing began in medicine and law but now extends to diverse fields like hairstyling and auctioneering, often creating barriers for qualified workers. Allensworth explores the self-dealing nature of licensing boards, their failure to protect the public, and the hidden costs totaling $250 billion annually. Her insights challenge listeners to rethink the necessity and ethics of these regulations.
Professional licensing boards often prioritize the interests of active professionals over public safety, creating significant conflicts of interest.
The current licensing system imposes high barriers to entry that disproportionately affect marginalized groups, exacerbating social inequalities in the workforce.
Reforming professional licensing to involve independent regulators could enhance accountability and consumer protection, making the system more equitable and effective.
Deep dives
The Role of Professional Licensing Boards
Professional licensing boards are regulatory bodies that determine who can enter various professions, but they are often composed of active professionals in those fields. This setup creates a conflict of interest as board members may prioritize the interests of their profession over public safety and consumer protection. Rebecca Allensworth, a researcher on this topic, describes licensing boards as resembling professional associations more than governmental agencies, leading to a failure in accountability and oversight. The imbalance allows dangerous professionals to continue practicing while keeping qualified candidates out of certain professions due to stringent licensure requirements.
High Barriers to Entry and Inequality
Allensworth highlights that occupational licensing creates unnecessarily high barriers to entry, affecting approximately one in five workers in the U.S. This overregulation leads to limited access to professions, ultimately exacerbating economic and social inequalities. Individuals with disabilities or criminal histories often face the greatest challenges in obtaining licenses due to these high standards. As a result, the licensing system tends to favor those who are already privileged, effectively blocking talented individuals from pursuing work in licensed professions.
Failure of Disciplinary Actions
The podcast discusses how licensing boards frequently fail to impose adequate disciplinary actions against professionals who engage in misconduct. For instance, a troubling number of medical professionals have histories of major disciplinary issues yet remain in practice. Notably, when serious allegations arise, such as drug trafficking, boards often hesitate to act decisively, allowing unsafe practitioners to continue working with patients. This reluctance to impose strict penalties raises concerns about the true effectiveness of professional licensing as a means of ensuring public safety.
Effects on Consumer Protection and Public Health
The licensing system often fails to serve its intended purpose of protecting consumers, as boards prioritize self-regulation over public welfare. Allensworth cites examples where individuals in trusted roles, such as doctors and lawyers, were allowed to continue practicing despite serious allegations of misconduct. This not only jeopardizes consumer safety but also affects public health, as seen during the COVID-19 pandemic where the shortage of healthcare professionals was exacerbated by overregulation. The failure of boards to adequately monitor and regulate these professions ultimately compromises the welfare of consumers relying on licensed practitioners.
The Need for Reform in Professional Licensing
Allensworth advocates for significant reforms in how professional licensing is regulated, suggesting that oversight should be more governmental rather than profession-based. By involving independent regulators who do not have active ties to the field, the system could become more accountable and focused on consumer protection. She proposes either making boards advisory to independent decision-makers or altering board composition to include non-professionals who can represent consumer interests. Implementing these changes could lead to a more equitable, effective, and transparent licensing process that benefits both workers and consumers.
Licensing began with medicine and law; now it extends to 20 percent of the U.S. workforce, including hair stylists and auctioneers. In a new book, the legal scholar Rebecca Allensworth calls licensing boards “a thicket of self-dealing and ineptitude” and says they keep bad workers in their jobs and good ones out — while failing to protect the public.
