Why is Maryland imposing absurd regulations on entrepreneurs?
While most states are busy unleashing their entrepreneurs to create jobs and innovative services, Maryland is bucking the trend.
A new law, which went into effect last month, imposes a continuing-education requirement on cosmetologists. Barbers, hairstylists, makeup artists and others working in the trade must already undergo 1,500 hours of training or spend two years as an apprentice, pass an exam and pay a fee before they can receive a license to practice. Under HB 1600, they’re now required to take remedial classes just to renew the licenses they already hold.
Despite mounting evidence that licensing laws provide little benefit to the public, the General Assembly decided to impose these new regulations on entrepreneurs. In so doing, it perfectly exemplified why reform is necessary.
HB 1600 is estimated to cost the state an extra $70,600 in administrative expenses in 2018 alone. But the real costs are to the workers who cannot afford another government-made barrier to work and to the consumers who will pay higher prices and have fewer options as a result.
Supporters of the bill argued that licensees should be required to undergo more training because it’s better for the public. The problem is that there’s very little evidence to show that licensing actually results in better outcomes for consumers.
Most studies show exactly the opposite: Licensees perform about equally to their non-licensed counterparts yet charge higher prices. A study of dentists, for example, showed that licensure had no impact on patient outcomes. Another study showed that licensure of mortgage brokers did not lead to fewer foreclosures but did lead to higher prices.
To the extent that practitioners find it useful, they should be free to undergo more training — voluntarily. And to the extent that consumers find that training useful, they should be free to choose more experienced professionals. But it makes no sense to mandate more training and impose an additional expense on entrepreneurship when the benefits are speculative and the costs to entrepreneurs and consumers are demonstrable.