About 10 days ago, police officers in [...]]]>

I am not a prophet, seer, or tarot card reader. I do not possess any kind of psychic ability. But I can predict the future, for I possess the power of principles. Principles allow us to project the consequences of our actions, and predict the actions of others.

About 10 days ago, police officers in Houston were called to a group home. They shot and killed a mentally ill man who threatened them with a pen. Community activists are up in arms over the incident, demanding an investigation and otherwise engaging in their normal publicity stunts. At the same time, the local media is starting, what I predict will be, a campaign to regulate the city’s group homes.

The campaign started over the weekend, with one newspaper columnist pointing out that these group homes are operating under the “government radar.” Without saying it, the columnist implies that individuals should not be allowed to do anything without government scrutiny.

Campaigns of this sort usually involve a number of reports regarding an alleged problem. In this case, we’ll likely hear many stories about violence at group homes. I suspect that the local paper will do an investigative report, dragging out stories of deviancy and abuse. We’ll be subjected to ambiguous and meaningless statistics. And through it all, we’ll be told that government must do something.

For the most part, the public won’t pay any attention to this. But the activists and the group home owners who think they can profit will push for government controls. The squeaky slime will get the government grease. And then, the problems will really begin, though few will trace it to this particular government intervention.

As is the case with all government regulations, the innocent will be punished. Operators who do not abuse or violate the rights of their clients will be forced to jump through hoops, and those hoops will grow smaller and smaller in time. Many will be forced out of business, and those that remain will have additional costs and paperwork. Those would have lived in group homes will find themselves on the streets, and a new group of activists will demand that  government do something.

Instead of imposing regulations on the entire industry, the city should prosecute those who actually violate the rights of other individuals. Until an individual violates the rights of another, their actions are not the government’s business.

A person may not require an individual to:

(1) become or remain a member of a labor organization; (2) pay dues, fees, assessments, or other charges of any kind… as [...]]]>

In February, Indiana became the twenty-third state, and the first in the “Rust Belt,” to enact a “right to work” law. The Indiana law states:

A person may not require an individual to:

(1) become or remain a member of a labor organization;
(2) pay dues, fees, assessments, or other charges of any kind…
as a condition of employment or continuation of employment.

While conservatives hail “right to work” laws as a victory for workers, such laws are an attack on the rights of employers. While conservatives hail “right to work” laws as a means to curtail the power and influence of labor unions, those laws are founded on the very same premises as the laws that have given unions so much power and influence.

For example, the Clayton Act in 1914 exempted labor unions from anti-trust laws, which would have otherwise made unions illegal. In 1932, the Norris-LaGuardia Act gave unions further protections, such as prohibiting “yellow-dog contracts.” (A “yellow-dog contract” is an employment contract in which a worker promises not to join a Labor Union or promises to resign from a union if he or she is already a member.) The National Labor Relations Act of 1935 made it illegal for employers “to refuse to bargain collectively with the representatives of his employees.” These laws, and others like them, grant increasing power to union leaders, compel employers to negotiate with those leaders, and effectively prevent employees from contracting their labor as they judge best. “Right to work” laws are intended to counter the laws giving such power to unions.

Where the pro-union legislation forces the employer to negotiate with union leaders, regardless of his own judgment, “right to work” laws prohibit the employer from making union membership a condition of employment, regardless of his own judgment. In both instances, the law prohibits the employer from acting on his own independent judgment.

Morally, a business owner has a right to set whatever terms of employment he desires, including union membership, and employees have an equal right to accept or reject those terms. These are choices that should be left to each individual. Each individual has a right to act on his own judgment, so long as he respects the mutual rights of others.

Unions per se are not the problem. The problem is unions backed with the coercive power of government. Current labor legislation forces businesses to “negotiate” with the unions or be prosecuted for violating labor laws. This is akin to “negotiations” between a banker and a robber—one side can issue ultimatums punctuated with “or else.” And “or else” means the threat of force. America’s labor laws effectively prohibit business owners with unionized labor from operating as they judge best. Right to work laws are based on the same premise.

The power granted to unions by government intervention in the employer/employee relationship cannot be solved by more government intervention in the employer/employee relationship. The solution is to repeal all laws that interfere in the voluntary and consensual relationships between employers and employees.

If employees choose to bargain collectively, that is their right as individuals. Simultaneously, the employer has a right to refuse to bargain with a union or any other group of employees. Employees have a right to act on their own judgment. So do employers. Neither party can morally use government coercion to make the other act differently than he thinks is best. Government has no prerogative in the relationship between employer and employee, other than enforcing the contracts that are freely entered.

So what would happen if unions were stripped of the power granted to them by government? Wouldn’t employers take advantage of their workers? While this is a myth believed by many, history demonstrates otherwise.

In 1914, Henry Ford voluntarily raised the wages of his employees to the rate of five dollars per day—nearly doubling the prevailing wage. At the same time, he cut the work day from nine hours to eight hours. In 1914, there was no union nor were there laws governing the relationship between Ford and his employees. Ford was not motivated by altruism, but by what he called “enlightened self-interest.” What was the result? Years later, he explained what occurred after he raised wages and reduced the work day:

In 1914, when the first plan went into effect, we had 14,000 employees and it had been necessary to hire at the rate of about 53,000 a year in order to keep a constant force of 14,000. In 1915 we had to hire only 6,508 men and the majority of these new men were taken on because of the growth of the business.

Ford recognized that by paying employees a wage that was considerably higher than his competitors, he was able to attract better workers and dramatically reduce turnover. He created a win-win, as do all rational employers.

Similarly, George Westinghouse also provided superior working conditions for his employees:

Working conditions at the Westinghouse Air Brake Company (WA&B) were more than proficient and the company had many new developments in effect for its employees. In 1869 it was one of the first companies to institute a 9-hour work day and a 55-hour work week. [A ten-hour work day and six-day work week was common in most industries as late as 1900.] WA&B also got the reputation for being the first industry in America to adopt half holidays on Saturday afternoons. A series of welfare options were also instituted to better the working and living conditions of its employees.

As with Henry Ford, Westinghouse recognized that better conditions for his employees resulted in greater productivity, and therefore, improved profits.

Industrialists are not the only businessmen to recognize the benefits of “enlightened self-interest.” In 1842, a French house painter—Edme Jean LeClaire—instituted a profit-sharing program for his employees. Recognized as the “father” of modern profit sharing, LeClaire “was determined to challenge the assumption that profit sharing would not increase efficiency and productivity enough to justify the payments made. He was proved right. His business prospered.”

Will every business owner recognize these truths? Will every business owner pay his employees above-market wages and offer greater benefits than competitors? Obviously not. But when employees are free to contract their labor, they can seek better jobs. A rational business owner will seek the best and brightest employees he can find. Such employees are the means by which he will achieve greater profits. When the market is free of government intervention, a less rational business owner will suffer economically.

Both leftists and conservatives would have us believe that government must protect the rights of workers. But there is no such thing as “worker’s rights.” There are only individual rights, and they apply to all individuals, employers and employees alike.

New Jersey resident Ernie [...]]]>

Across the nation, millions of entrepreneurial Americans seek to create jobs, pursue their passion, or simply make a few extra dollars by starting their own business. But often, they are forced to abandon their dreams, not because they lack talent or capital, but because they do not have the government’s permission.

New Jersey resident Ernie Arias is one example. His business installs home entertainment equipment and he decided to add security systems to his list of services. However, the state of New Jersey requires more than three years of classes and experience before it will grant an occupational license to locksmiths and security installers. Arias abandoned the idea, saying, “There’s no way I could put in all that time and spend probably $2,000 on classes. You can build a house in New Jersey quicker and easier than it takes to get the license you need to put locks on the house.”

Benta Diaw, a native of Senegal, learned the art of African hairbraiding from her grandmother. After building a successful business in Seattle, the state of Washington demanded that she take 1,600 hours of courses on such services as pedicures and nose-hair trimming, but none on hairbraiding, in order to receive a state license.

Mercedes Clemens dreamed of opening a service offering horse massages (a therapy used to increase range of motion and to promote healing from injury). But Clemens—who is a licensed human-massage therapist and certified in equine massage—lives in Maryland. And Maryland law mandates four years of veterinary school for anyone who wishes to massage horses, despite the fact that veterinary schools do not teach how to massage horses.

These individuals, and many more like them, saw a need in the market and decided to meet it. However, their respective states prohibited them from doing so. They did not want to peddle child pornography, or sell counterfeit goods, or engage in some other rights-violating activity, but rather, they wanted to offer legitimate services to willing customers.

This may seem like some kind of Orwellian nightmare, but it is a situation faced by millions of Americans. Across the nation, more than eight hundred different occupations require some form of government licensing. Consider some of the professions that require a license: manure applicators in Iowa, upholsterers in Utah, and rainmakers in Arizona. If you want to put new fabric on a chair in Salt Lake City or spread cow dung in Des Moines, you have to take approved courses and pay the state the appropriate fees, or you will be a criminal. So, how did these bizarre laws come about?

Occupational licensing laws are enacted with the stated intention of protecting consumers from incompetent practitioners. But study after study has found that licensing boards do little to discipline incompetents. For example, Public Citizen, a consumer advocacy organization, reports:

Of 10,672 physicians listed in the NPDB [National Practitioner Data Bank] for having clinical privileges revoked or restricted by hospitals, just 45 percent of them also had one or more licensing actions taken against them by state medical boards. That means 55 percent of them – 5,887 doctors – escaped any licensing action by the state.

In these cases, the hospitals found it necessary to protect patients from incompetent or negligent doctors, but the licensing board did not. If operating on the wrong knee won’t necessarily cause action by the licensing board, what will? Young states that the most common reason for discipline against licensed professionals is activity that violates rules intended to limit competition, such as advertising restrictions. Being a bad doctor is not necessarily a cause for disciplinary action by the medical board; being a good marketer is.

If licensing is not protecting consumers, why do many professions require a license? Jack McHugh, of the Mackinac Center for Public Policy, writes: “The dirty little secret about state licensure is that the people who lobby for it are usually the stronger competitors of those who would be licensed. Their goal is not to protect the public, but instead to raise barriers to new competitors who might cut prices and lower profits.” By erecting barriers to new practitioners, licensing limits competition and increases the wages of those who have managed to jump through the government’s hoops.

In the process, occupational licensing increases the prices that consumers must pay. Licensing tends to create a high quality, high price service that may not fit the needs of all consumers. Because of licensing, highly skilled practitioners are often required to perform routine services that could be performed effectively, safely, and at a lower cost by less skilled individuals. For example, a light fixture can be replaced by a competent handyman, but licensing may require that the task be performed by a licensed electrician. The results of the restrictions imposed by licensing are fewer choices for consumers and higher prices. Many choose to do without the service, or do it themselves, and often with deadly results. Professor S. David Young writes:

The incidence of rabies is higher, for example, where there are strict limits on veterinary practice, and as Sidney Carroll and Robert Gaston documented, rates of electrocution are higher in states with the most restrictive licensing laws for electricians. Apparently, consumers often do their own electrical work in highly restrictive states rather than pay artificially high rates for professionals, with predictably tragic results.

Through higher prices and limited choices, consumers—the alleged beneficiaries of licensing—are also victims of this injustice.

In a free market, individuals can offer the products and services of their choosing, and consumers can accept or reject that offer. Each is free to act on his own judgment in the pursuit of his own values and happiness. The only proper purpose of government is the protection of this right.

Long ago, James Madison recognized the injustice of prohibiting individuals from working as they choose: “That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations…”

Isn’t this a description of occupational licensing? Licensing creates “arbitrary restrictions, exemptions, and monopolies” within a profession; it denies individuals the freedom to earn a living as they choose. Occupational licensing should be abolished.

Does this mean that consumers would be at the mercy of unscrupulous hacks? Hardly. First, nobody has a right to engage in fraud, that is, intentionally misrepresent his skills, training, or qualifications. Second, in a free market, individuals must take responsibility for their hiring decisions, rather than relying on the false security of licensing. Even with the “protection” afforded by licensing, consumers frequently turn to third parties for information regarding products and service providers. Examples of highly popular third parties include: Good Housekeeping, Consumers Reports, the Better Business Bureau, Angie’s List, and trade associations.

Another alternative to licensing is certification programs, which are offered by trade associations, product manufacturers, and other third parties. These differ from licensing in that they are voluntary. Practitioners are free to obtain certification and the benefits that come with it, such as verification of competency and potentially higher wages, or forgo certification and lessen the chances of obtaining higher wages. Consumers are also free to choose certified professionals and pay higher prices, or employ uncertified, lower priced practitioners. Both producers and consumers are free to act on their judgment—to contract as they choose—according to their needs and values.

If some street thug demanded protection money so that you could operate your shop, you would recognize his demands for what they are—extortion. The principle does not change merely because those making the demands wear a tie and have the backing of government.

On April 22, 2010 an EPA regulation governing renovation, repair, and painting (RRP) took effect. The regulation governs any activity that will disturb paint containing lead and applies to all homes built before 1978 and “child-occupied facilities”. On Wednesday I took the certification course mandated by [...]]]>

I wrote this in May 2010. It remains relevant.

On April 22, 2010 an EPA regulation governing renovation, repair, and painting (RRP) took effect. The regulation governs any activity that will disturb paint containing lead and applies to all homes built before 1978 and “child-occupied facilities”. On Wednesday I took the certification course mandated by the EPA to perform this type of work.

I expected the material in the course to be disgusting, and in that regard it greatly exceeded my expectations. (Exceeded in the sense that it was far more disgusting than I imagined.)

The instructor described RRP as a “program” designed to benefit children, who are the primary victims of lead poisoning from the dust of paint containing lead. The consequences of lead poisoning in children are indeed tragic–learning disabilities and brain damage being the most prominent. But combating lead poisoning is not a proper function of government. And RRP is going to do little, if anything, to combat it. It will however, grant the government greater control over the lives of contractors and cost consumers a lot of money.

For example, RRP stipulates the procedures that a contractor must follow to contain paint chips and dust, as well as clean up procedures. After clean up, the contractor must conduct a test to determine if lead dust is still present. This test consists of using an electrostatic rag to wipe a surface and visually comparing it to a card. If the surface does not “pass” you must repeat the procedure. If it fails again, you simply wipe the surface a third time and walk away without any further testing. In other words, it really doesn’t matter if lead dust is present or not. We must simply take the time to clean the surface up to 3 times. This time of course, translates to higher prices for the consumer. I estimate that a typical job that my company does will cost 15% to 20% more because of RRP, and some jobs could double in price.

Consumers will not be eager to pay these additional costs, and many won’t. Which means, contractors who attempt to play by these “rules” will lose work to contractors are willing to risk fines from the EPA.

The containment requires the use of disposable plastic, and far more than we would typically use. This plastic must be placed in a garbage bag of at least 4 mils thickness, and the bag must be secured in a particular fashion. The bag can then be tossed in the trash.

For those of us in Houston this is particularly ironic. The city has mandated the use of disposable lawn bags in an effort to keep petroleum based bags out of the landfill. The EPA is now mandating that we use more plastic, which will find its way into those very same landfills.

If all of this seems completely arbitrary, you would be right. And the instructor essentially said so. For example, on exterior work, the instructor admitted that containing lead dust is impossible. We are simply to “do our best”. But what does this mean? I could make every reasonable effort to do “my best”, and if some EPA bureaucrat disagrees, I am subject to a fine of $37,500 per incident, as well as jail time. And I won’t know that I didn’t do “my best” until after the fact. My life literally rests in the hands of some faceless bureaucrat, who will make his decisions based on his own subjective feelings at the moment.

The arbitrary nature of these regulations was driven home in the opening minutes of the course when the instructor announced that the EPA didn’t have everything figured out and was “making things up as we go along”. Somehow contractors are supposed to operate under these shifting rules. And based on the comments that I heard, they are more than willing to do so.

While jokes about the absurdity of the regulations were common, the general attitude seemed to be an apathetic acceptance. “What do you expect from the government?” was said more than once. In other words, we have no choice but to accept the fact that our lives and livelihood depend on our ability to satisfy the arbitrary, shifting demands of Washington.

I have long been aware of such injustices, but this one really hit home. I run a small business, offering quality, conscientious service to my customers. My life just got immensely more difficult, not because of some error or transgression on my part, but simply because some bureaucrats decided to save “the children”. And in the process, they are going to destroy the lives of a lot of adults, not to mention the children who depend on them.