Thursday, April 28, 2011

(Local) Government Run Amok: Home Gardens (Practically) Illegal in California, Perhaps Elsewhere

From the San Francisco Chronicle, via Reason, we have a story about local government permitting run amok.

I won't quote much of the story here, since you can read it via the links if you want the details, but essentially, the city is requiring a small-scale ($2,500/year in revenue) farmer to pay several thousand dollars for a permit or be shut down, all because she sells a small amount of her excess produce for this substance called "money," rather than giving away her excess produce. The city said that the same would apply to any gardener that sold any produce, period.

Now, I am a staunch supporter of government efforts to protect consumers from harm - for example, requiring government regulation and oversight of food processing plants that produce food for hundreds of thousands or millions of people, since a single contamination in one of these plants can cause major public health problems in the form of thousands of sick people.

However, a small-scale urban farmer poses practically no risk to public health - their scale is too small, and dangerous contamination of food is far likelier to happen during food processing rather than food growing.

I see this as just another part of a larger trend that started in the 1950s - a steady increase in the percentage of workers who need a state license to have permission to perform their job:

From the WSJ.

The WSJ has an amusing piece on the increase in state and local licensing requirements, with some excellent anecdotes:
Texas, for instance, requires hair-salon "shampoo specialists" to take 150 hours of classes, 100 of them on the "theory and practice" of shampooing, before they can sit for a licensing exam. That consists of a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner. Glass installers, or glaziers, in Connecticut—the only state that requires such workers to be licensed—take two exams, at $52 apiece, pay $300 in initial fees and $150 annually thereafter.
California requires barbers to study full-time for nearly a year, a curriculum that costs $12,000 at Arthur Borner's Barber College in Los Angeles. Mr. Borner says his graduates earn more than enough to recoup their tuition, though he questions the need for such a lengthy program. "Barbering is not rocket science," he said. "I don't think it takes 1,500 hours to learn. But that's what the state says."
It's harder to measure quality in more subjective fields such as interior design or hair styling. But a look at consumer complaints about manicurists suggests licensing doesn't necessarily correlate with quality.
Alabama has perhaps the strictest licensing requirements in the nation: 750 hours of schooling and a written and practical exam. The state gets, on average, four public complaints a year about poor service, according to the Alabama Board of Cosmetology.
Connecticut, which doesn't require manicurists to get licenses, has averaged just six complaints a year to the state over the past five years. Two-thirds of those complaints are about gift certificates that aren't honored, according to data from the consumer protection division of the state attorney general's office.
Licensing is surely important in a number of professions, since inept or unqualified electricians, plumbers, doctors, etc. could put consumers at serious risk. However, I think it's relatively difficult to justify requiring 750 hours of study and a license for manicurists - I'm pretty sure the free market regulates the quality of manicurists just fine, with word getting around pretty quickly as to who is a good manicurist and who isn't. The same goes with small-scale farmers - it's hard to justify requiring hobbyists to pay $1,000s in licensing fees just to sell their extra tomatoes, cucumbers, and chard.

In my government agency, we have to do a rigorous cost-benefit analysis of any regulation or rule we think about implementing; do states have to do the same with their licensing laws?

For a thoughtful analysis on the economic impacts of poorly conceived licensing laws, from an increase in inequality to encouragement of black markets, see this great post from Modeled Behavior.

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