The Licensing Racket

A bottom-up investigation of the broken system of professional licensing, affecting everyone from hairdressers and morticians to doctors, lawyers, real estate agents, and those who rely on their services.

Tens of millions of US workers are required by law to have a license to do their jobs—about twice as many as are in unions. The requirements are set by over 1,500 industry-specific licensing boards, staffed mainly by volunteers from the industries they regulate. These boards have enormous power to shape the economy and the lives of individuals. As consumers, we rely on licensing boards to maintain standards of hygiene, skill, and ethics. But their decisions can be maddeningly arbitrary, creating unnecessary barriers to work. And where boards could be useful, curbing harms and ensuring professionalism, their performance is profoundly disappointing.

When Rebecca Haw Allensworth began attending board meetings, she discovered a thicket of self-dealing and ineptitude. Drawing on hundreds of hours of interviews with board members and applicants, The Licensing Racket goes behind the scenes to show how boards protect insiders from competition and turn a blind eye to unethical behaviour. Even where there is the will to discipline bad actors, boards lack the resources needed to investigate serious cases. The consequences range from the infuriatingly banal—a hairdresser prevented from working—to the deeply shocking, with medical licensing boards bearing considerable blame for the opioid crisis and for staffing shortages during the COVID epidemic. Meanwhile, unethical lawyers who are allowed to keep their licenses are overrepresented among advocates working with the most vulnerable groups in society.

If licensing is in many arenas a pointless obstacle to employment, in others it is as important as it is ineffective. Allensworth argues for abolition where appropriate and outlines an agenda for reform where it is most needed.