Sunday, NPR’s Planet Money podcast revisited a still-relevant 2012 story about the problems of licensing regulations — or, rather, the problems for the practitioner and benefits for the business proper.
Episode 381: When Business Loves Regulation
A few years ago, Jestina Clayton started a hair braiding business in her home in Centerville, Utah. The business let her stay home with her kids, and in good months, she made enough to pay for groceries. She even put an ad on a local website.
Licensing in non-medical and legal professions remains a public good in matters of health and hygiene, where such matters are at issue; education and inspection are basic ways to, say, greatly diminish the risk of infection at a nail salon (not an imagined concern). But as demonstrated in NPR’s coverage, it’s also quite frequently a means of diminishing competition, with the effect of barring many from the workforce, primarily within the service industry.
Per 2016 data from the Bureau of Labor Statistics, the service industry accounts for 21% of occupations among workers in the 20-34 age range — what we’ll call the broad millennial cohort — skewing more heavily among those 20-24 at 28.6%. Under that umbrella, personal care work, where licensing issues are most pertinent, comprises only a little over 4% of occupations for the cohort. But these millennials make up a far more significant 37.6% of the service industry’s workforce — the greatest of any of the age-based demographic segments — including 35% of those in personal care positions and even 36.5% of those employed as hairdressers and cosmetologists, marginally outnumbered in those cases only by the combined 35-44 and 45-54 cohorts.
*According to the U.S. Bureau of Labor Statistics, “Household Data Annual Averages, 11b. Employed persons by detailed occupation and age,” 2016 (numbers given in thousands)
Among all ten-year segments, in fact, those aged 25-34 make up the largest slice of the pie chart in each of these categories — but, by the records, they are, of course, also the largest age-based group in the workforce.
As of the BLS’s most recent data (2015) on educational attainment and occupation among those 25 and older, the combined trio of barber, hairdressing/cosmetology and manicure/pedicure sectors — not even including shampooers, skincare specialists, and other similarly adjacent occupations (for some idea of the level of detail with which the federal government approaches these matters) — are overrepresented by those with a high school diploma or equivalent, or less. However, it’s worth noting that a fair percentage across the groups also record some college experience; what’s not clear is if this education excludes that necessary to obtain a professional license. But 48.4% of hairdressers and cosmetologists by the data lay claim to a college education, ranging from some credits (33%) to possession of a bachelor’s (5.1%); a not insignificant 9.6% of manicure and pedicurists cite a four-year degree.
*According to the U.S. Bureau of Labor Statistics, “Educational attainment for workers 25 years and older by detailed occupation, 2014-15” (given in percentages)
So, taken altogether, and recognizing the many gaps in our data — for example, detailed age breakdowns across educational attainment — it’s still worth considering that for those 20- and young 30-somethings in the service industry, we’re also approaching a group for whom one of two things is quite recently true:
1. Workers have chosen to pay the lesser cost of licensing and career-based study in lieu of traditional academic study;
2. Workers have paid, or currently are paying, twice over for educational and professional opportunity.