| by Tyler Williamson Wed, 06 Jan 2021 Why must aspiring plumber contractors’ complete multiple years of education, multiple years of lower level work, and pay a hefty annual fee just to obtain a license? What justification does the state provide for these requirements? According to the Construction Industries Board (CIB), which oversees plumber contractor licensing, these requirements are in place to “protect life and property,” to “provide a fair and healthy market environment for the contractor business,” and to show Oklahomans that plumber contractors meet a “minimum standard of competency.” My recent addition to the 1889 Institute’s Occupational Licensing Directory discusses the 1955 Plumber License Law and the licensing regime that developed pursuant to it, finds it totally unnecessary, and recommends a simple solution. |  |
First, the services plumber contractors provide on a daily basis pose no real danger to life or property. Think about it: fixing sinks, faucets, toilets, sewer lines, etc. is relatively straightforward stuff. In addition, for large jobs or those that require more skill or expertise, inspection and permitting requirements of both the state and municipalities mitigate most of the risk. The real danger lies in a cloistered group of plumbers setting unreasonably high prices because they face limited competition, but I digress.
Second, the idea that the state needs to interfere in a market in order for it to be fair and healthy is laughable (nothing says “fair and healthy market” quite like getting fined $200 for offering to unclog someone’s toilet while unlicensed). Market distortion caused by state interference has artificially reduced the supply of contractors in a time when demand is high. In fact, such anti-competitive market interference (via licensing schemes) may actually be in violation of federal antitrust laws. Even if these licensing schemes are not in violation, it is because states’ rights have carried the day, not because the licensing boards are justified and do anything but limit competition.
Finally, obtaining information on the quality or competency of plumber contractors is relatively easy. You can search any number of plumbers on the internet and find plenty of helpful information from Yelp, Consumer Reports, Google Reviews, social media, or sights like Angie’s List. With such a plethora of information available, one would think that the need for the state to certify some arbitrarily determined “minimum standard of competency,” would be totally unnecessary, yet the law still exists. Indeed, Great Britain (which is no stranger to licensing) does not even have state mandated licensing requirements for plumbers, but instead relies on a system of private certification.
Private certification could be a more meaningful shorthand indicator of quality and also allow for greater transparency in occupations than traditional licensing. The 1889 Institute has previously discussed private certification as an alternative to occupational licensing in A Win-Win for Consumers and Professionals Alike: An Alternative to Occupational Licensing. This system of private certification would maintain a high standard of quality and competency, while also removing the market distortion caused by the monopolistic licensing regimes that are currently in place.
What’s not to like about that? Sounds like a win-win to me.
Tyler Williamson is a Research Associate at 1889 Institute and can be reached at twilliamson@1889institute.org.
Second, the idea that the state needs to interfere in a market in order for it to be fair and healthy is laughable (nothing says “fair and healthy market” quite like getting fined $200 for offering to unclog someone’s toilet while unlicensed). Market distortion caused by state interference has artificially reduced the supply of contractors in a time when demand is high. In fact, such anti-competitive market interference (via licensing schemes) may actually be in violation of federal antitrust laws. Even if these licensing schemes are not in violation, it is because states’ rights have carried the day, not because the licensing boards are justified and do anything but limit competition.
Finally, obtaining information on the quality or competency of plumber contractors is relatively easy. You can search any number of plumbers on the internet and find plenty of helpful information from Yelp, Consumer Reports, Google Reviews, social media, or sights like Angie’s List. With such a plethora of information available, one would think that the need for the state to certify some arbitrarily determined “minimum standard of competency,” would be totally unnecessary, yet the law still exists. Indeed, Great Britain (which is no stranger to licensing) does not even have state mandated licensing requirements for plumbers, but instead relies on a system of private certification.
Private certification could be a more meaningful shorthand indicator of quality and also allow for greater transparency in occupations than traditional licensing. The 1889 Institute has previously discussed private certification as an alternative to occupational licensing in A Win-Win for Consumers and Professionals Alike: An Alternative to Occupational Licensing. This system of private certification would maintain a high standard of quality and competency, while also removing the market distortion caused by the monopolistic licensing regimes that are currently in place.
What’s not to like about that? Sounds like a win-win to me.
Tyler Williamson is a Research Associate at 1889 Institute and can be reached at twilliamson@1889institute.org.
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