COVID-19 Is Showing Us That Some Regulations are Worth Cutting
Workers in many industries are struggling right now as a result of not enjoying "essential" status. As states weigh the president’s guidelines on reopening the economy in the coming weeks and months, they should incorporate some ideas that make it even easier to work than it was before the pandemic hit. Some people will need all the help they can get.
One cosmetologist took to Instagram to say, “Asking a hairstylist to do your hair right now, when it’s CLEARLY PROHIBITED, is like asking a doctor friend to write you a random prescription for narcotics.”
Some businesses like restaurants have had the flexibility to offer take out services or delivery. Auto repair shops can come to your door and pick up your car from your house. Many hairstylists would likely appreciate some degree of flexibility as the nation faces an unprecedented surge in unemployment and people across the country eagerly await relief payment checks and an uncertain future.
These are strange times, to be sure. But, putting aside questions about what we need to do during the pandemic, why do we regulate giving black-market haircuts almost like we do selling drugs? Revisiting that idea could do a lot of good for a lot of people.
In all 50 states, in order to practice barbering or cosmetology, you must first be licensed by the state. Licensing laws set requirements for training, education, and more in an effort to protect public safety and ensure quality. These laws also require that hairstylists be registered to do business at the place they style hair. So even if your cosmetologist friend wanted to give you a haircut in either of your homes, he or she legally can’t provide that service.
Of course, some elected officials are finding ways around these laws in order to get haircuts during the crisis.
While consumer protection is one of the reasons that licensing laws can be so specific, a driving force behind many of these regulations is protecting established professionals from competition from upstarts who might, for example, not have a lot of time or money to pay license fees, or who want to find a way to serve customers without buying brick-and-mortar locations.
Here’s another example: Until recently, most states required that natural hair braiders be licensed as cosmetologists and go through the education of how to safely handle the chemicals used in salons. None of that education is useful for natural hair braiding, but it is very effective at preventing more people from becoming hair braiders.
In this way, occupational licensing laws act as a barrier to entry for aspiring professionals. For many, the cost in time and money for the required education and training periods is enough to prevent them from entering the profession entirely. In fact, research has estimated that licensed occupations have about 20 percent fewer professionals than similar, unlicensed occupations. Because they are able to shield themselves from competition, professionals already in the hair styling industry are able to earn higher wages, which they pass on to consumers with higher prices.
In addition to reducing competition, occupational licensing also limits innovation and solutions to new or unique problems. In Iowa, William Burt had an idea to help underserved communities: He would operate a mobile barbershop, driving to homeless shelters, low-income neighborhoods, and veterans’ centers to offer his services. However, this ran afoul of Iowa licensing requirements, which required barbershops to have a fixed location. (Iowa has since passed a law allowing mobile barbershops.)
The threat of COVID-19 has policymakers temporarily waiving licensing requirements that pose barriers to entry across health care occupations, to help ensure that our health care system has enough capacity to withstand the coronavirus threat. Health care professionals are in great demand right now, but the dynamics of licensing are not unique to that industry. It hurts consumers and aspiring professionals by posing a barrier to entry in many other instances.
When the crisis subsides, policymakers should pause and take the opportunity to reconsider several regulations. Requiring a variety of services to be rendered in a physical location does not seem to be in the consumer's best interest. Here’s hoping that a careful analysis of whether it makes sense to restrict hairstyling and barbering to a fixed location makes the cut.
Conor Norris is a research analyst and Edward Timmons is director of the Knee Center for the Study of Occupational Regulation. Edward Timmons is also professor of economics at Saint Francis University in Loretto, Pa., and a senior affiliated scholar at the Mercatus Center at George Mason University.