After a year of debate in the New Jersey state legislature, young entrepreneurs in the state finally have the right to shovel snow without fear of legal consequences.
Right before the historic blizzard of 2016, Gov. Chris Christie signed a bill into law removing the need for, of all things, a license to shovel snow.
These permits cost would-be shovelers anywhere from $200 to $450 in order to go door to door offering their services.
Prior to the recent relaxing of licensing laws, various New Jersey municipalities had regulations that required individuals to purchase permits to offer snow shoveling services. These permits cost would-be shovelers anywhere from $200 to $450 in order to go door to door offering their services. The permits expired after 180 days, requiring yearly renewals for additional fees. These permits affect young people looking to make a small profit during snow days by shoveling their neighbor’s driveways and sidewalks.
The controversy over snow shoveling in New Jersey began in January 2015, when two high school students from the town of Bound Brook were stopped by police after going door to door offering to shovel their neighbors’ sidewalks for a small fee. The officers politely told the teenagers that a local ordinance required them to obtain a permit at least 24 hours in advance of a predicted snowstorm.
Residents were outraged. State Senator Michael Doherty introduced a bill that stated, “no ordinance regulating solicitation for services shall be applicable to solicitations, whether written or oral, for snow shoveling services made within 24 hours of a snowstorm that has been predicted by a commonly recognized commercial or governmental weather reporting entity.”
The absurdity of requiring a license to shovel snow is an example of the overuse of occupational licensing schemes in the modern economy. Occupational licensing is most commonly justified by the state’s desire to promote societal health and safety. Consumers frequently lack the expertise or the time necessary to become an expert on every product or service, so the government sets minimum quality standards and bars anyone from entering the market unless he meets those standards.
In some professions, this makes complete sense. The cost of a botched surgery or a blown legal defense is, after all, high. Yet the Bound Brook shoveling regulation is a perfect example of how governments frequently take licensure requirements too far.
In fairness, New Jersey is not alone in this. Various states require licenses in such mundane fields as barbering, interior decorating, and cosmetology. In fact, nearly one in three Americans is employed in a licensed profession, a dramatic—and alarming—expansion from the 1950s, when only five percent labored in a licensed field.
The fact is, occupational licensing today frequently has little to do with the health and safety of the general public. Instead, it is often about entrenched interests getting the government to do what they otherwise could not: Keep competitors out of markets, so they can charge higher prices than open competition would allow.
For example, last year in the District of Columbia, an obscure Board of Physical Therapy, composed mainly of—you guessed it—physical therapists, pushed to begin licensing personal trainers, ostensibly to prevent “unprofessional” workout fanatics from taking advantage of gym-goers. It turns out that personal trainers are often in direct competition with physical therapists.
So while the boom in personal training may be good for Washingtonians, it is not so good for established physical therapists, giving them every incentive to use regulatory power to restrict entry into the field and save their own client base. Consumers rebelled, recognizing their ulterior motivations, and the mayor dismissed the Board’s chairwoman.
Another example of needless regulations is in Charleston, S.C., where the city board requires tour guides to obtain licenses to give guided tours. (The regulation is currently being challenged by the Institute for Justice.)
A similar tour guide licensing scheme in Washington, D.C., was struck down by the Court of Appeals for the D.C. Circuit. And then there are the perennial clashes between ridesharing companies, like Uber and Lyft, and taxi regulators and politicians bound and determined to prevent them from undermining the favored cab industry.
Occupational licensing clearly needs to be reformed. Its excessive application hurts young entrepreneurs, small businesses, and consumers alike, and its regulatory reach is only increasing. The problem is so pronounced that political leaders as ideologically diverse as Speaker of the House Paul Ryan, R-Wis., and the Obama administration have each released reports that are highly critical of the status quo.
In fact, the White House study provided various best practices to achieve the benefits of licensure without “placing unnecessary restrictions on employment, innovation or access to important goods and services.” One such alternative: certification, which allows the public to distinguish between higher- and lower-caliber service providers while not barring anyone from entering the field.
Preventing young people from helping members of their community remove snow is an excellent example of an unnecessary occupational license.
As Doherty stated in his bill, “shoveling snow has been a time-honored activity for children when schools are closed, and it is not appropriate for municipal solicitation regulations to be interpreted so broadly as to prohibit children from offering to perform this necessary service within their communities.”
Hopefully other communities will follow suit.
