FEE- ccupational licensing is crippling the labor market. One of the worst examples I’ve seen comes from Gardendale, Alabama. Local news station ABC3340 reports that a lawn service threatened to report a teenager to the city because a city ordinance requires everyone who wants to do business in Gardendale to have a business license. As the ordinance is written, this apparently includes lawn-mowing teenagers.
Now, Gardendale is my wife’s hometown, where my grandmother and in-laws live, and where I can be found at the Cracker Barrel just off Fieldstown Road on the occasional Saturday. So this story got my attention immediately.
But stories like these can show everyone the serious problems with occupational licensing in general.
First, and most obviously, occupational licensing is a barrier to entry – it enriches some people at the expense of others.
People with licenses can raise their prices, produce less, and thereby earn higher profits because licensing requirements shield them from competition from people without licenses. So customers pay more and get less.
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