Ben Casselman of FiveThirtyEight reports the practice of taking more than you’ve earned through “rent seeking” is spreading.
A White House report last summer found that occupational licensing requirements have increased fivefold since the 1950s, covering more than a quarter of all workers in 2008. Cosmetologists, tree trimmers and even interior designers need licenses in some states.
… I want the people filling my cavities to know what they’re doing. But it’s hard not to suspect that in many cases, these rules serve another purpose: to make it harder for new competitors to enter the marketplace. …
Economists call this kind of behavior “rent-seeking,” which is another way of saying “gaming the system to make more money than you’ve earned.” (A company that wins a no-bid contract through political connections is a rent-seeker. So is a CEO who gets a raise by stacking the board of directors with friends.) …
Research has found that occupational licenses inhibit entrepreneurship, especially among low-income workers. They also raise prices, lower productivity and limit workers’ ability to change careers or cities. One recent study estimated that licensing laws cost the U.S. as many as 2.85 million jobs.
Is greed ever good for the economy? Should “rent-seeking” policies and practices be stopped?