Jestina Clayton carved herself out a nice little niche specializing in African hair braiding, that is until the licensing police came calling and she was forced to shutdown her successful business:
After graduating from college, she considered getting an office job but decided instead to start her own hair-braiding operation and began advertising on a local Web site. “It’s not like it was bringing me millions,” she says, “but it was covering groceries.” At least until a stranger who saw the ad e-mailed her a demand to delete it. “It is illegal in the state of Utah to do any form of extensions without a valid cosmetology license,” the e-mail read. “Please delete your ad, or you will be reported.”
A cosmetology license required nearly two years of school and $16,000 in tuition.Unfortunately for many would-be entrepreneurs, Clayton's case isn't an isolated incident:
There are more than 1,000 licensed professions in the United States, partly a result of more than a century of legal work. As the country industrialized, state governments wanted to protect their citizens and create standards not just for lawyers and doctors but also for basic services. It didn’t take long for professional groups to find that they also stood to benefit from the regulations. Over the years, more and more started to lobby for licensing rules, often grandfathering in existing professionals while putting up high barriers to new competitors. In fact, businesses contorting regulation to their own benefit is so common that economists have a special name for it: regulatory capture.Not surprisingly when Clayton sought help in the Utah legislature, the lobbyists turned out in force to try and stop her:
[T]he cosmetologists [siq] have started grass-roots campaigns in several states to fight the loosening of license rules. They turned out in full force in Utah. “We encourage regulation,” says Brad Masterson, a spokesman for the Professional Beauty Association. “Why should everyone else who’s doing hair have to conform to requirements and not her?”A better question might be, why should anyone have to comply with requirements for braiding or cutting hair?