There’s no shortage of research on the barriers to entry that occupational licensing laws create. Even workers in relatively low-skilled professions face application and renewal fees, long hours of training that often have little to do with the requirements of the profession, and the capriciousness of licensing boards ultimately responsible for their entry into the profession.
But what happens to firms and employees who decide to set up shop without going through the “proper” channels? Twenty-nine moving companies in New Jersey found out the hard way, writes Christian Hetrick in The Philadelphia Inquirer:
New Jersey fined 29 unlicensed moving companies that were caught during an undercover sting operation last spring, the state attorney general’s office announced Monday.
The movers were snagged during four days in April as part of “Operation Mother’s Attic,” in which state investigators posed as people hiring the companies to move from a luxury home in Montville, Morris County. The unlicensed movers, who had advertised online, were met by investigators who issued notices of violation and $2,500 fines, authorities said.
As far as penalties go, these are relatively modest (and movers found in violation can cut their fine in half if they apply for a license within 30 days). But New Jersey Attorney General Gurbir Grewal’s justification for the sting is a case for consumer protection more broadly, not licensing specifically.
“An unlicensed moving company can be a homeowner’s worst nightmare,” Attorney General Gurbir Grewal said in a statement. “They’ve been known to hold truckloads of property hostage until the customer pays an extortionate fee. And these unlicensed movers often don’t carry adequate insurance, creating the risk that homeowners will be left high and dry if their property is seriously damaged during the move. That’s why we regulate the industry — and why we crack down on rogue operators.”
Holding someone’s belongings “hostage” is reprehensible and almost certainly should come with criminal penalties. And requiring moving companies to carry insurance is a less restrictive (and more market-friendly) way to protect consumers against damage to their property. Using the $400 application and annual renewal fees (plus an additional $35 for each copy of the license) to cover insurance premiums instead would be a more efficient alternative to the current regime.
Additionally, the New Jersey Warehousemen and Movers Association’s membership standards provide a voluntary alternative to certify the trustworthiness of a moving company.
Consumer protection is important, but licensing and elaborate sting operations are far from the only way to achieve this outcome.