Over-regulation hurts mid to lower-income workers, says the Institute for Justice

This week our very own Jim Waters, President of the Bluegrass Institute, hosted "The Afternoon Show" on Lexington's WLAP. During the broadcast, Waters had the opportunity to interview Dick Carpenter, co-author of the Institute for Justice's recently released report entitled "License to Work" - a study that compares occupational licensing burdens across the states.

Kentucky's occupational licensing regulations are 15th most burdensome in the nation.

During the interview, Carpenter shed light on the ways these sorts of regulations harm mid to lower-income professionals and how his organization "represents the interests and individuals who are interested in working in the occupation of their choice but find that they are shut out by onerous and needless government regulations."

He also shared the eye-opening story of Mississippi licensing regulations for hair-braiders. Yes, even hair-braiders must seek government licenses in some states, and in Mississippi these regulations were suppressing the supply of those services.

But as Carpenter explained, "Once they got rid of that law, almost immediately, 300 people registered as hair-braiders in Mississippi. What they did was they got rid of the cosmetology laws and they just had a simple registration … once they did that, 300 people entered the formal economy and started working as hair-braiders in Mississippi."

What a testament to the way government over-regulating can affect mid to lower-income workers.

So just how do state governments decide which occupations to burden and which to favor? Dick Carpenter had an answer:

 “It’s what Milton Friedman called the power of the concentrated interests. These groups of individuals go in. They lobby the legislature, and they are able to influence the legislature … when the diffused interests - that’s the rest of us who aren’t represented - we don’t have a voice. And so the only substantive voice being heard is those of the associations or groups that have banded together to go in and try to lobby for their particular license.”