Professional license

Criticism

Restricting entry by licensing arguably maintains higher standards of service within a profession as well as acting to eliminate competition from those who provide a cheaper but (allegedly) sub-standard service. Organizations such as the American Medical Association were explicitly set up to restrict the number of practitioners. However, libertarians like Milton Friedman have argued that this process is counterproductive as it seriously restricts the number of active professionals working in society and thus unnecessarily inhibits the working of a free enterprise economy. A 2011 U.S. study estimated that occupational licenses result in 2.8 million fewer jobs, and cost the economy $203 billion per year. The number of jobs requiring a professional licensed represents an increasing fraction of the workforce, from 5% in 1950 to 22% in 2010s. Critics say that low-income consumers, who pay higher prices than required for the level of quality they might require, and low-income job seekers, are disproportionately affected.