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Home | Blog | Occupational Licensing = Protectionism, part 4552

Occupational Licensing = Protectionism, part 4552

December 27, 2007
In my work as an engineering manager, I recently received a very nice letter from an instrumentation and electrical contractor that has several offices from Bakersfield, CA to Pascagoula, MS. Responding to an inquiry we had about mobilizing instrumentation and electrical craft workers to a site in the panhandle of Texas for a major revamp, he noted the following:
In September of 2004 the advent of Texas state licensing of electricians created new operating challenges in regard to trade licensing and license authentication. While this regulation was unwelcome administratively, it was not unfamiliar to [company]. As a contractor operating from Florida to California, [company] has experience maintaining and monitoring license requirements in regulated environments. We operate in multiple states requiring craft licensing and in multiple cities requiring craft licenses. The stated goals of most such regulation, safety and skills validation, are legitimate and desirable. The practical and political motivation for introducing such regulation, however, is typically fees (licensing tax collection) and trade protectionism (the establishment of technical barriers to the free migration of trade labor resources across state and municipal boundaries).
Never let it be said that businessmen don't know what's going on. I'd say about 80% see regulations for what they are: taxes and special-interest politicking. On a related note, my estimator informs me that our project, because it will be employing non-unionized labor, will have 11.9% greater productivity compared to union labor, based on a very large database of completed petrochemical projects. It's the little things that warm my heart.

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