1500 Hours: Haircuts, Pilots, and Regulatory Capture

By Paul Schwennesen of AEIR.

"I don’t like to brag, but I got a decent haircut last week from a competent barber. Not bad eh? That very same week I was also landed safely in a $375 million jetliner by a competent pilot. From a basic common-sense standpoint, the two services could hardly be more different, but from a regulatory and licensing standpoint they are oddly, ridiculously similar.

The minimum number of pilot-in-command (PIC) hours required to gain a commercial pilot rating as an Airline Transport Pilot is 1,500 hours — this includes things like cross-country flight hours, night flying, instrument ratings, multi-engine time and so forth. This all seems sensible enough — most of us would hardly object if the people entrusted with our lives had some minimum qualifications.

Curiously enough, however, the other profession that requires 1,500 hours of rigorous training time is hairdresser. And no, I am not making this up. 

The Institute for Justice has been highlighting the nation’s comically onerous license environment for years, pointing out that cosmetologists, for example, have to undergo approximately ten times the training time that Emergency Medical Technicians must undertake. They point out that, “given that there is no reason to believe EMTs are underregulated, this suggests these other occupations are overregulated.” Indeed.

But why? Who exactly stands to gain from such a patently hyper-regulated system? Is it government bureaucracy, bent on protecting fat licensing fees and the staffed departments that come with them? Possibly that’s some of it, but it seems to be more invidious than that. In this instance, it is the industry itself which provides the basic impetus for this kind of absurdity. According to an industry mouthpiece in Missouri (a perfectly middle-of-the-pack state in terms of licensing requirements), it is practitioners themselves who are the most motivated to maintain these extreme licensing requirements. Last year they crowed of their success at the state capitol:

“Legislators proposed House Bill 590, which would eliminate the license requirement for cosmetologists in Missouri. Professionals fought back, stating that cosmetology is a science and its practitioners need specialized training in the use of chemicals and sanitation. The public hearing on the bill was held in 2013 and no more hearings are scheduled at this time.”

Needless to say, the legislation did not pass, and Missouri’s licensing requirements remain rigidly enforced. Artificially erected barriers to entry, especially within relatively low-wage professions, are common. Their primary purpose is to keep out competitors from industries which are relatively broad and which require relatively low technical skill. Excessive licensing requirements are an attempt to put a veneer of difficulty on an otherwise easily-done profession in a rather naked effort to minimize competition. Preschool teachers, for example, are even more heavily licensed than hairdressers: a prospective candidate must undergo 2, 927 days (more than eight years) before they can purchase their license and be unleashed upon the state’s youngsters. If you care to be a gaming inspector (presumably checking slot machines), you don’t need many training hours but need to cough up the cool grand needed for a license. And so on. Excessive licensing requirements are everywhere and tend to cluster around the lowest-paid professions. It’s not a coincidence.

Schools and licensing programs, it turns out, are often the primary beneficiaries of this kind of market manipulation. “Z” Hair Academy, for instance, charges their students over $18,000 in tuition to earn certification through their training programs. Never fear, they assure prospective students, there are “scholarships” and Federal Financial Aid packages available. According to the Institute for Justice, the average student takes out $7,793 in federal student loans, and since most Missouri cosmetologists make less than $24,000 a year, it would require another three years of semi-indentured servitude just to pay back the tuition loans.

As if it weren’t bad enough, some of these academies open their services to the public, allowing their unlicensed students to practice their trade at discount rates. I got my perfectly good haircut from a trainee for $12 — about a third of the going rate. These academies therefore manage a double trick: two revenue streams under the convenient protection of government licensing requirements. All told, according to the Institute for Justice, Missouri’s licensing requirements cost the state’s economy $3.55 billion and lead to 38,500 fewer jobs each year by artificially stifling the supply of ready applicants to the field. It’s a racket.

While it’s tempting to place the blame on the coiffure-industrial complex, it’s important to remember that they can only operate this way by the effective manipulation of state control. It is a perfect case study for the phenomenon of regulatory capture: regulatory agencies created to protect the interests of consumers work instead to safeguard the commercial interests of the industries they are expected to be regulating. 

Hairdressers are clearly not alone in this, and many a trade has circled its wagons against efforts to deregulate highly entrenched, disproportionally advantageous licensing schemes. In the end, however, these kinds of artificial barriers to the free market-directed flow of supplies and demands only tend to waste resources and diminish the public’s benefits. One thousand five hundred hours squandered in the repeated performance of a basic task like hair care doesn’t only waste the learner’s time, but also promotes a dependency mindset — a perception that the state is best positioned to authorize entrepreneurial activities.

The next time you step off a commercial airliner, take a look at the pilot’s hair — chances are, the hairdresser underwent more training. It’s a ridiculous waste and licensing requirements need to be thoroughly cleaned up."