You Need the Government's Permission to Braid Hair? Licensing Gone Wild

Let me describe a dangerous criminal enterprise. A woman sits on a stool, takes a section of hair, divides it in three, and crosses the strands over one another until a pattern emerges. No chemicals. No blades. No heat. An hour or two later, a customer walks out happy and a bill has been paid. In a number of American states, at various points, that woman needed a license that took hundreds of hours of classroom training in techniques she would never use, covering products she would never touch, before the state would let her do what her grandmother did at the kitchen table.

If your first reaction is "surely that cannot be true," good. Hold that thought, because the truth is a little more complicated and a lot more interesting than the cartoon version, and the complicated part is where the argument gets won.

How licensing began, and why it was reasonable

Let me start by being fair to the other side, because licensing did not begin as a scam. When a surgeon operates on you, you cannot judge his work until it is too late. When a lawyer handles your case, you cannot read the law yourself. When an electrician wires your house, a mistake does not announce itself. It waits in the wall for years and then burns the house down at three in the morning.

That asymmetry, where the buyer cannot judge the quality of the thing he is buying and the cost of a mistake is severe, is the classic argument for licensing. States have used their general "police power" to protect public health and safety since the founding, and the Supreme Court recognized it in a famous case in 1889. In Dent v. West Virginia, the Court upheld a state's right to require a physician to hold a license and to set the standards for that license. The reasoning was plain: the public has a right to know that the person holding himself out as a doctor is qualified.

So here is the baseline. If someone is cutting into your chest, you want a license. You want someone to have checked. Nobody serious disputes that.

How it drifted

Now the drift. Over the twentieth century the list of licensed jobs grew and grew. In state after state the legislature added occupations: barbers, cosmetologists, interior designers, funeral directors, auctioneers, shampooers, tour guides, and on and on. I won't throw out figures, because the counts depend on whom you ask and when, but the direction is not in dispute. A job that once needed nothing but skill and a willingness to work now frequently needs a state-issued credential.

Why? Think about who goes to a legislature to ask for a licensing law. It is almost never the customer. The customer is busy and does not know there is a hearing. It is the people already working in the trade. They arrive with a polite request: protect the public by requiring training, an exam and a fee. The practical effect is to raise the cost of entry for newcomers and thin out competitors, and the incumbents are the ones who benefit.

Economists have a name for it. They call it rent-seeking, a fancy way of saying a group using the political process to protect its own income. I call it the oldest trick in the book. In the Middle Ages it was called the guild. We replaced the guild with the licensing board and gave it a state seal.

Now notice what that does to the people at the bottom. If you are a single mother with a gift for braiding hair, a fee of a few hundred dollars and a thousand hours of unpaid classes are not a speed bump. They are a wall. The rich can afford the wall. They have already climbed it. The poor get a lecture about "professionalism." This is the part that should bother a liberal as much as it bothers me, and some honest liberals say so. I've written a companion piece on the economics, which you can find at the license you need to braid hair and the jobs it quietly kills.

The board that licenses itself

The deeper problem is who runs the show. In many states, the licensing board for a trade is made up mostly of working members of that trade. Think about that structure for a moment. We have created a body, with the power of the state behind it, in which the competitors decide who gets to compete.

Here is the thing: that is exactly the situation the Supreme Court looked at in 2015 in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The facts are almost comic. The North Carolina dental board, a majority of whose members were practicing dentists elected by other dentists, learned that non-dentists were offering teeth whitening, at kiosks and spas, for less than dentists charged. The board sent cease-and-desist letters to the whiteners, and to the mall owners who hosted them, telling them that the practice was the unlicensed practice of dentistry. The Federal Trade Commission said that was an unlawful restraint on competition.

The question was whether the board enjoyed antitrust immunity as an arm of the state. Justice Kennedy, writing for the Court, said no: when a state board is controlled by active participants in the very market it regulates, it gets immunity from the antitrust laws only if the state actively supervises what the board does. Without supervision, the board is a cartel with a letterhead.

I think that decision is one of the underappreciated cases of the last generation, and I'd say it for two reasons. First, it tells us what a court saw when it looked at licensing without the usual deference: it saw competitors using public power against competitors. Second, it points to the reform. If a board is run by incumbents, someone elected has to be watching it. Without that, nobody is.

The hair braiding hall of fame

Back to the braid. Hair braiding is the textbook case because the safety rationale is so thin. Traditional braiding does not involve dyes, relaxers, chemicals or cutting. A cosmetology license, in the states that demanded one, covered a curriculum designed for a salon: chemical treatments, cutting, styling with heat, skin and nail care. A braider who wanted to work needed to complete that program, even though braiding is a different skill from most of what such a curriculum teaches.

Public-interest lawyers sued, and a number of states responded by exempting braiding from cosmetology rules or creating a much lighter registration. This is the best evidence for the point: when the legislature actually looked at whether braiding is dangerous, it found it was not, and the burden dissolved. That is a pattern, not a fluke. The jobs that lawmakers have been willing to release from licensing tend to be the ones where the supposed harm cannot be named.

So I'd propose a test, and I'll call it the three questions. One: what is the specific harm the license prevents? Two: has anyone shown that the harm happens at a rate that justifies the cost? Three: is there a lighter tool, like disclosure, a bond, a title registry, insurance or an inspection, that would do the job? If a licensing rule cannot answer the first question without using the word "professionalism," it is a barrier and not a safeguard.

The best counterargument, stated fairly

Here is the strongest version of the case for licensing, and I think it is a good one.

One, many services involve harm that customers cannot see until it is too late. Two, a customer cannot be expected to research the training of every provider. Three, bad actors who hurt people can vanish and reappear, and a lawsuit after the fact is cold comfort to the injured. Four, a license gives the state a handle: if a provider hurts someone, the license can be taken away. Five, if you repeal licensing, the costs fall on the people least able to protect themselves, the elderly, the poor and the uninformed, who will be sold unsafe work by fly-by-night operators.

That is a respectable position, and in some fields I accept it. Nobody should be allowed to practice surgery, pilot an airliner or certify a bridge by announcing that he is good at it. For those jobs, the harm is severe and irreversible and the customer has no way to judge.

But the argument proves less than its defenders think. It supports licensing where the harm is serious and the customer cannot judge. It does not support licensing every job a lobbyist has ever asked for. A license for the job of flower arranging is not defended by the harm from a bad bouquet. And note the logic of the fifth point. If the argument is that the poor are protected by licensing, why do licensing rules fall hardest on the poor, who pay in time and fees to enter, and who then charge the very customers licensing was supposed to protect more for the privilege?

There is also the middle ground between licensing and nothing, and the middle ground is where the policy action is. Certification lets a person earn a title without locking everyone else out of the work. Registration requires only that a worker's name be on file. Bonding and insurance requirements protect the customer without a training wall. Inspections check the work and not the worker. A reasonable state uses the full toolbox and saves the heavy hammer for the cases that need it.

Universal recognition: let the license travel

There's a second problem with licensing that gets less attention: it does not travel. A nurse, a cosmetologist or an electrician licensed in one state who moves to another often has to start over, with new fees, new exams and sometimes new classroom hours. Think of the military families who move on orders, every couple of years, and a spouse who must requalify each time. It is a burden, and a silly one, since a dental hygienist does not become more dangerous by crossing a state line.

The reform that has caught on is called universal recognition or universal licensing recognition. The idea is simple: if you hold a license in good standing in one state and you move, the new state recognizes it, subject to a check on your record and some basic conditions. Arizona was the first state to pass such a law, in 2019, and others have followed with their own versions. Terms vary, and I won't tell you how many states have acted, because the list changes. Check your own legislature's website for the current law.

This is federalism doing what it is supposed to do, the way Brandeis Called the States Laboratories and Conservatives Took Him at His Word says it should. One state tried something, the others watched, and the good ideas spread. It's also the competition among states that I describe in Interstate Competition Is Why States Cannot Afford to Be Lazy. A state that makes it easy for workers to move in will get workers. A state that makes them re-take a test will get a shortage and a letter to the editor.

What a sensible reform looks like

Here is the agenda, in order of ease.

1. Sunset review. Every licensing board and every licensed occupation comes up for review on a schedule, and the burden is on the board to show the harm and the benefit.
2. Active supervision. After the North Carolina decision, states have to decide whether their boards are supervised by someone who is not a competitor. If the answer is no, the board needs a fix, and the fix may be a majority of public members.
3. Least restrictive means. If a lighter tool will do the job, the law should use it.
4. Universal recognition. A license earned elsewhere counts here.
5. A check on the fee and hour requirements. The hours of training required should bear some relation to the risk of the job.

None of this requires hating licensing. It requires treating a license as what it is: a tax on entry, paid by the person who wants to work, that has to earn its keep.

The bottom line

• Licensing is legitimate when it prevents serious harm that customers cannot judge for themselves, which is why doctors, pilots and structural engineers should hold licenses. It is not legitimate when its main effect is to shield members of a trade from new competitors.
• Since the 2015 decision in North Carolina State Board of Dental Examiners v. FTC, a board controlled by working members of the trade needs real state supervision to claim antitrust immunity. Ask your legislator who is supervising the boards in your state.
• Push for the three-question test, sunset reviews and lighter tools like certification, bonding and inspections before a new license is created.
• If you or a family member moved across state lines for work or on military orders, ask your state legislator whether your state recognizes licenses earned elsewhere. Read the current law on your legislature's website.
• The family trying to start a business with a pair of hands and a good reputation is the one who pays for every unnecessary hour in a classroom. Take their side.