New Hampshire Repeals Licenses (And Criminal Penalties) For … – Forbes

Regulators are getting out of entrepreneurs’ hair—literally.

The past few weeks have seen states untangle hair care specialists from absurd licensing requirements. Earlier this month, New Hampshire Gov. Chris Sununu signed a bill to legalize natural or African-style hair braiding. The Granite State now joins Indiana and South Dakota, which both deregulated the trade. In Tennessee, lawmakers recently repealed the state’s license to shampoo hair. Incredibly, before these reforms were enacted, it was actually against the law to earn an honest living twisting or lathering hair without a government-issued license.

(AP Photo/Charlie Neibergall)

Although they may sound like niche issues, those reforms also act as a salvo against occupational licensing, which has surprisingly become of the biggest impediments in the nation’s labor markets. Today, one in four American workers needs a license to their jobs—a fourfold increase from the 1950s. To put that figure in perspective, less than three percent of hourly-paid workers earn at or below the minimum wage, while only 12 percent of America’s workforce belong to a union or are represented by one. In other words, licensing is now one of the biggest labor institutions in America.

Taken as a whole, licensing red tape raises prices and limits economic opportunity. One study by economists from Princeton University and the University of Minnesota even estimated that “licensing results in 2.8 million fewer jobs with an annual cost to consumers of $203 billion.”

Many license requirements impose substantial burdens, especially on low-income workers seeking upward mobility. The newly repealed licenses illustrate just how irrational many requirements have become.

Before they could legally work, aspiring shampooers in Tennessee had to finish a 300-hour course (which could cost upwards of $3,000) and pass two exams, including one on the “theory” of shampooing. Unlicensed shampooing could even risk up to 6 months in prison. Even though shampooing hair is something even kindergartners have mastered, the state’s stringent requirements severely restricted supply: In February, only 37 “shampoo technicians”  had active licenses. Fortunately, after the Beacon Center of Tennessee filed a lawsuit, lawmakers scrubbed the license.

New Hampshire’s regulations on braiding hair were even stricter. Braiders had to become licensed cosmetologists, which requires at least 1,500 hours of coursework. After accounting for tuition, kit and other course fees, those classes could cost nearly $20,000. Adding to the absurdity, many cosmetology schools do not teach African-style braiding techniques, while braiders would have to waste their time learning how to perform manicures, facials and other skills completely irrelevant to their line of work. In New Hampshire, braiding hair without a license was actually a crime, punishable by up to one year in jail.