Occupational licensing boards are a hazard

By David Colborne

What is the difference between being a homeopathic medical examiner in Nevada or Utah? 

Utah doesn’t license homeopathic medical examiners, nor should they since homeopathy is a long-debunked pseudoscience. A “homeopathic medical examiner” is every bit the fraud that a “creationist archeologist” or a “flat Earth astronomer” would be. Nevada, on the other hand, does license homeopathic medical examiners, which is utterly disgraceful as it legitimizes fraud via government license and statute. 

That occupational licensing sometimes protects fraudulent occupations via government statute (like, for example, so-called “oriental medicine,” a field of quackery originally invented by Maoist China, which of course Nevada also happens to license because why wouldn’t we?) is one among several reasons why state-run occupational licensing should definitely be rethought, if not abolished outright. Luckily, Nevada’s Dental Board and Board of Pharmacy were kind enough to recently remind us all of another great reason — they’re also funnels for incompetence and graft. 

The theory behind occupational licensing goes something like this: Some occupations are downright hazardous to our health when done improperly. To protect ourselves from, say, malicious interior designers, it’s a good idea for there to be some sort of certification organization, agency, or board that confirms a provider for a particular service is qualified to provide the service. Additionally, this organization should also be able to receive complaints and revoke certifications for incompetent or fraudulent providers of these potentially hazardous services. 

I agree with all of that, by the way. I like my doctors, plumbers, barbers and electricians to know what they’re doing.

None of that, however, justifies requiring Nevada’s dentists through force of law to pay $1200, plus an additional $600 every two years, to the GOP Chair Michael McDonald Welfare Fund. It also doesn’t justify paying the executive director of the Board of Pharmacy, a board that failed to complete mandatory background checks for a decade, more than $150,000 per year. And it certainly doesn’t justify requiring more than a quarter of Nevada’s workforce to pay state-mandated license fees to more than thirty chronically unaccountable occupational licensing boards. 

How unaccountable are our state occupational licensing boards? Like most of Nevada’s problems, as the state’s latest audit report notes, that’s a question that’s been wrestled with for decades. Ironically, while Nevada’s occupational licensing boards are directed to ensure that those working in regulated occupations perform their work according to best practices, Nevada’s occupational licensing boards are barely regulated at all. Consequently, each occupational licensing board tends to make up its own rules as it goes along, frequently at considerable cost to those they regulate. For example, state boards spent more than $500,000 on outside contract lobbyists (that’s even if you subtract the $72,000 Michael McDonald charged the Dental Board for metabolizing oxygen, carbon and water into carbon dioxide, heat and bodily waste). 

Worse yet, some boards use disciplinary fines to fund operating expenses. This is a phenomenally bad idea. As Ferguson and Waldo have conclusively demonstrated, letting agencies keep fees for revenue encourages agencies to seek out fine-generating activity, no matter how dangerous each activity might or might not be to anyone. Nevada’s drivers are already well acquainted with this dynamic if they’ve driven through Esmeralda County, where more than 10 percent of the county budget comes from traffic fines. Similarly, it’s probably not a coincidence that the State Board of Cosmetology, whose fines remain with the Board per statute, issued over 900 fines (more than every other occupational licensing board combined) totaling nearly $200,000 just between July and September. 

What should we do to hold Nevada’s occupational licensing boards accountable?

The state’s Division of Internal Audits recommends that the various occupational licensing boards should be administered under the Department of Business & Industry. Honestly, that’s not a bad idea. The Governor’s Office has struggled to administer Nevada’s overly numerous occupational licensing boards for several administrations now. Putting them under a department with administrative expertise, a pool of pre-existing office staff and a bit more focus might help at least prevent the sort of issues we saw from the pharmacy and dental boards. 

There is, however, a somewhat more obvious solution to this problem than moving some boxes in a bureaucratic org chart: Eliminate some (if not all) of Nevada’s occupational licensing boards. 

Nevada licenses more of its workers through state-run occupational licensing boards than any other state in the country. We license more of our workers than California (which, licensing 17.2 percent of its workers, ranks 46th). We also license more of our workers than Idaho and Wyoming (which rank 4th and 5th — anybody who tells you Republicans support “smaller government” is trying to commit fraud and should be treated accordingly). Despite this, Nevada is no safer for employees or the public than any other state. Put another way, we certainly don’t have a “first in the nation” reputation for employee or public safety. 

The reason for this is simple: Occupational licensing boards don’t exist to serve the public. They initially exist to serve the occupations they license by artificially restricting the number of people who work in each licensed occupation. This, however, only lasts until the Iron Law of Bureaucracy takes hold and each board begins to function to serve itself at the expense of its members. This scenario has clearly happened to the Dental Board and, if the excessive fines issued by the Cosmetology Board are any indication, is probably happening there as well. Once that happens, laborers in each licensed occupation labor to pay the high salaries of board members and their staffs, whose sinecures are protected through statute.

Thankfully, occupational licenses aren’t the only way we can hold industries and employers accountable; arguably, they’re perhaps the least effective. The Institute for Justice lays out several options which are far more effective at protecting the public and don’t require the creation of punitive boards full of bureaucrats with six-figure salaries. These include market competition (not everyone’s favorite tool, I know, but one I’m fond of), voluntary third-party certification, bonding and insurance (voluntary and mandatory), deceptive trade practice acts and even state certification. 

Granted, none of these options will pick the pockets of Nevada’s dentists to pay Michael McDonald’s lobbying fees, nor will they keep workers from other states from easily bringing their skills to Nevada (remember, rural Nevada has a serious dentist shortage) without filling out forms and paying various licensing fees before they get to work. Even so, these are arguably small prices to pay for greater, more affordable access to better, safer services for every Nevadan.

David Colborne has been active in the Libertarian Party for two decades. During that time, he has blogged intermittently on his personal blog, as well as the Libertarian Party of Nevada blog, and ran for office twice as a Libertarian candidate. He serves on the Executive Committee for both his state and county Libertarian Party chapters. He is the father of two sons and an IT professional. You can follow him on Twitter @DavidColborne or email him at david.colborne@lpnevada.org