Saturday, May 14, 2016

A solution of how to undo the Gordian knot of occupational licensing has been offered in Tennessee


A major breakthrough in civil rights and, believe it or not, in rendering boost and help to the U.S. sagging economy, as well as in attorney regulation, may have come from Tennessee.  

In Tennessee, an unusual lawsuit regarding monopoly in occupational licensing was filed several days ago.

The issue in the lawsuit is state monopoly in occupational licensing on the right to shampoo people's hair for pay.

The State of Tennessee requires a license and 300 hours of training in "theory and practice of shampooing" in a government-approved school.

Naturally, people who add to their income through shampooing other people's hair, do not have money to undergo this rigorous "training".

Of course, a child can shampoo her own, and her siblings' hair quite expertly without any license or training.

But, here the quirk is, and that is what the lawsuit alleges - that the Tennessee State Constitution, Article I Section 22, prohibits existence of monopolies, and protects its citizens from monopolies.

If that is true, occupational licensing, including attorney licensing, is unconstitutional in Tennessee under the State Constitution - which every judge is sworn to uphold.

Yet, every judge in the State of Tennessee is a licensed attorney and PART, the judiciary is the REGULATOR of the monopoly, and thus the PROMOTER of the monopoly, which, under the Tennessee Constitution, is a violation of Tennessee judges' constitutional oaths of office.

Since occupational licensing is stifling this country's economy by stifling mobility of this country's work force upwards (from low income to higher income) and across state borders (where state and even municipality-restricted licensing raise prices and prevent competition), and even President Obama recognized it recently in a report issued in the summer of 2015, the Tennessee "shampooing lawsuit" may prove as a major breakthrough.

But, don't expect help from the feds in this situation.

The recent decision in North Carolina Board of Dental Examiners v FTC stripping disciplinary boards consisting of market players of antitrust immunity, proved so far to be a toothless tiger and gave states a hint how to perpetuate the monopoly in occupational licensing that is stifling the U.S. economy (over 1/3 of the U.S. labor market is licensed, according to North Carolina Dental and the Obama Report of 2015).

Immediately after the North Carolina Board came out, there were articles hopeful that the North Carolina Board will actually help the situation and strip the bar of the monopoly in court representation.

I was part of those who held those hopes, and I still do think that the North Carolina Board case can be used to undermine the bar monopoly somewhat - but not completely, because, even if they were stripped of antitrust immunity, they will be asserting other immunities, sovereign immunity, quasi-judicial and prosecutorial immunities, and still win, despite engaging in anti-competitive activities.

The North Carolina Board is actually a dangerous precedent for freeing the U.S. labor market from the stifling grip of occupational licensing, as it created an alternative for the states as to how to comply with federal antitrust laws:

either 

1) active state supervision by a neutral body over market players overpowering the disciplinary boards - and thus acting in their anti-competitive interests rather than the interests of the consumers;

or

2) create statutes on state level that legitimize the monopoly as it is.

No state supervision was provided so far in any states for occupational licensing, but state legislatures are getting together to invent means of legalizing the monopolies.

For example, I was recently alerted by a reader to a presentation created by the National Conference of State Legislatures, discussing North Carolina Board in detail, and what the legislatures "can do about it".

The Tennessee lawsuit points out at the way of making the loophole of North Carolina Board unavailable to states who enhance their citizen's protection through a state referendum amending their state Constitutions - if protection from monopolies are not yet in those state Constitutions, as it obviously is in the Tennessee Constitution, Article I, Section 22.



So, for the entire time that the Tennessee state government regulated professions - as well as the legal profession, as a monopolist, it did it in violation of State Constitution.

Meaning that all state regulations and criminal statutes for unauthorized practice of - from shampooing to braiding to law - are unconstitutional under the State Constitution.

People and attorneys of the State of Tennessee, rejoice, you have a protection against the grip of occupational licensing in your own State Constitution, and whatever the court says, it cannot change that Constitution.

As to people whose State Constitutions do not have a prohibition on monopolies yet - that's the work in progress, we need to hold state referendums and amend state Constitutions to include such a prohibition.

If monopolies - any monopolies, including state-established monopolies - are all extinguished, the country's economy will benefit, we all will benefit.



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