At the beginning of January, Indiana House of Representatives member Timothy Wesco introduced a bill that would have allowed cosmetologists to provide services without a license. Unfortunately, an outpouring of opposition via a Change.org petition with 26,000 signatures forced Rep. Wesco to withdraw the legislation weeks later. That’s a shame. He was on to something.
Occupational licensing regulations govern who can work in certain jobs and provide certain services. The scope of occupational licensing has expanded dramatically since the 1950s, when only 5 percent of the workforce was licensed. Back then, such professionals were almost exclusively lawyers and healthcare practitioners. Presently, roughly a quarter of the U.S. population needs a license to work— that includes interior designers and florists in certain states, and of course, Indiana cosmetologists.
In Indiana, cosmetologists must complete 1,500 hours of training, pass an exam, and pay a $92 fee before they can practice independently. While training programs seem like a fine idea (who could object?), they’ve come under scrutiny in recent years. A New York Times report from 2018 examined Iowa’s licensing system for cosmetologists, and found the investment of time and money into years of education and training, while it did enrich school owners, didn’t pay off for prospective workers. And while there’s no proof that cosmetology licensing regulation improves consumer or worker safety, licensing certainly contributes to student debt, not to mention keeping people out of the workforce.
There have already been some successful reforms in the Hoosier State. For example, in 2017, Indiana became one of many states to exempt natural hair braiders from cosmetology licensing. This came after the Institute for Justice, a public interest law firm, found licensing for natural hair braiders did not change customer complaint frequency. That makes sense given that techniques taught in cosmetology courses are often unrelated to hair braiding. If the goal is getting more Hoosiers back to work, then eliminating this kind of regulatory inefficiency is just the ticket.
It may sound confusing, and it’s this confusion that likely drove many of the signatories to the Change.org petition, but unlicensed does not mean unregulated. There are a series of government measures, from health inspections to registration, that already help manage customer safety and welfare. Plus private sector actors also make customers better-informed about health and safety. As a study from economists at Harvard, Stanford, Boston University, and MIT found, online reviews are more useful for consumers looking for service providers than licensing status is. Thus, in most cases, occupational licensing is redundant and an unnecessary barrier to entry.
The state should make licensing voluntary rather than mandatory. That would provide the same assurance to customers without criminalizing skilled, but not officially credentialed, service providers. Licensing isn’t an effective way to improve service quality. It just prevents people from entering the workforce.
This comes with real economic costs for people of the state of Indiana, especially those looking for work. According to economists Morris Kleiner and Evgeny Vorotnikov, occupational licensing laws cost the state of Indiana around 30,000 jobs. As unemployment remains well above its pre-pandemic low, not to mention worsening long-term declines in labor force participation, removing barriers to certain careers is an inexpensive way for governments to reverse those trends.
Here’s hoping licensing reform gets another look in Indiana later this year.
Alex Muresianu is an Opportunity Fellow at Young Voices. He can be found on Twitter @ahardtospell.