How Professional Licensing Groups Distort The Market

from the the-new-unions dept

Nearly a year ago we wrote about how "professional" groups and organizations where professionals are required to obtain a license and abide by certain rules are really a new type of anti-competitive union, hidden beneath the veneer of public interest. I should be clear up front, as someone who actually has a degree in this stuff, and spent plenty of time with unions that I have no problem with the concept of collective bargaining. The problem is that many union activities are less about collective bargaining and more about anti-competitiveness. It appears that Forbes has now stepped up to the plate with a very similar article to ours, noting that professional organizations are the new unions, not only hiding behind bogus claims of public interest, but also doing a lot more harm than good in many cases. As the article notes, these professional licensing organizations raise fees, shrink the labor pool and often make things less safe -- by encouraging people to do dangerous things they might otherwise hire a professional to do, if that professional weren't kept artificially expensive. In effect, the arguments in favor of these types of licenses are similar to the arguments in favor of DRM or other limitations on a market. While they may sound good upfront to those in a position to leverage the monopoly power granted by them, the unintended consequences over the long term harm everyone.

Filed Under: anti-competitive behavior, guilds, professional organizations, unions