Of the many schemes perpetrated by government, one of the most insidious is occupational licensing. Occupational licensing requires individuals to obtain the government’s permission to produce and earn a living. Defenders of occupational licensing claim that it protects “the public” from incompetent and unscrupulous professionals. The truth is, occupational licensing does nothing to protect the public. The case of Bob Smith is one example.
Smith owns a vocational school called Pacific Coast Horseshoeing School (PCHS) in California. Since 1991, Smith has taught more than 2,000 students how to shoe a horse. Some students just wanted to know how to shoe their own horses, but others go to the school to become professional farriers.
In 2017, after twenty-six years in business, Smith was informed that he was breaking the law. Some of his students didn’t have a high school diploma or GED. Under California law, individuals without a high school diploma or GED must take the government’s “ability-to-benefit” exam. In other words, the students needed the government’s permission to attend the school. Smith notes that no particular educational background is necessary to shoe a horse.
Horses don’t read books or do math; you just have to be able to get under the horse and work the tools.
Smith and the Institute for Justice challenged the law, and in 2021, the California legislature repealed the “ability-to-benefit” requirement.
Across the country, nearly 800 professions are licensed in one or more states. Advocates of occupational licensing argue that it protects the public. Yet, it is always those already in a profession who demand licensing. Licensing allows the incumbents to limit competition by imposing arbitrary barriers to entry. Occupational licensing is a legalized protection racket.