Foxes at the Henhouse: Occupational Licensing Boards Up Close
The dark side of occupational licensing—its tendency to raise prices to consumers with dubious effects on service quality, its enormous payout to licensees, and its ability to shut many willing workers out of the workforce—has begun to receive significant attention. But little has been said about the legal institutions that create and administer this web of professional entry and practice rules. State-level licensing boards regulate nearly one-third of American workers, yet, until now, there has been no systematic attempt to understand who serves on these boards and how they operate. This Article undertakes an ambitious and comprehensive study of all 1,790 licensing boards in the U.S. and identifies their statutory membership. The results are clear: nearly all of them are controlled by professionals holding a license issued by the board itself.
This self-regulation is disturbing enough if one expects at least some governmental involvement in decisions that are known to redistribute income, block labor entry, and harm consumers. But now the practitioner-dominated licensing board is not just an urgent policy problem, but a legal one. A recent Supreme Court case has placed these boards and their members in the crosshairs of federal antitrust liability, precipitating a legal crisis for the states. This Article identifies the enormous scope of the Court’s opinion in North Carolina State Board of Dental Examiners v. FTC, opines on the meaning of its somewhat cryptic holding, and suggests steps that states can take to reform their boards with an eye to both antitrust immunity and more reasonable occupational regulation.