Beauty schools and salons sent lobbyists to Hartford to push for new occupational licensing in 2019. So did the Nail and Spa Association of Connecticut. Actual customers—the people who pay for manicures —went to Yelp.
Their online reviews tell an interesting story. Salon visitors in Connecticut, where no occupational license was required for nail technicians prior to recent changes, rated their experiences about the same as salon visitors in New York and Massachusetts, where occupational licenses are required. Some customers from across state lines preferred the service they received in Connecticut.
“I’m not local so idk if I can go anytime soon again but it might be worth the 35min ride,” one New Yorker wrote about a Stamford salon.
Most online reviewers were happy regardless of the location of their salon. “Raising Barriers, Not Quality,” a new report from our public interest law firm, the Institute for Justice, crunches the numbers at nail salons and finds no statistically significant difference during the 15-year period from 2004 to 2019.
Cosmetology reviews in the Tri-state area tell a similar story, but in reverse. Connecticut demands more education and experience for cosmetologists than New York and New Jersey, yet cosmetologist reviews were similar in all three jurisdictions during the study period.
The same pattern occurs in other locations and occupations. The report compares Yelp ratings for manicurists, cosmetologists, barbers, locksmiths, interior designers and tree trimmers in neighboring states with vastly different licensing laws. To control for as many variables as possible, we focused on similarly situated communities in close proximity on either side of state lines.
Results were consistent: Occupational licensing does not improve quality. It might even do harm. Tree trimmers in Virginia, where no occupational license is required, outscored licensed tree trimmers in Maryland by a statistically significant margin.
Tara Swagger, a Connecticut salon owner who has worked in the beauty industry for more than 20 years, understands the limits of licensing regimes. “Licensed trades have plenty of lousy technicians and improper work resulting in bad experiences,” she testified at the state Capitol in 2019. “Many people have stories for just about any industry and beauty is no exception.”
Despite the evidence, Connecticut brought back licensing for manicurists following a 40-year reprieve that started in 1980. During this deregulation period, Connecticut was the only state in the nation without government barriers to the occupation. That ended on Jan. 1, 2021, when the new law took effect.
Essentially, the state fixed a problem that did not exist, while raising barriers for aspiring nail technicians, many of whom are immigrant or lower-income workers. Connecticut also introduced licensing requirements for estheticians and eyelash technicians. In all three cases, consumers did not ask for licensing; industry insiders did.
They love the protectionism. Licensing benefits existing workers by raising barriers to market entry and reducing competition. It also pumps up beauty school budgets by forcing more people to attend classes, creating new sources of tuition revenue at a time when student debt already is out of control.
Industry insiders justify the licensing by saying it is critical to protect consumers. But for 40 years, the Connecticut Department of Public Health effectively regulated the industry with a system of inspections rather than licensing. The deregulation period was hardly a free-for-all with no government oversight.
Market forces provide additional safeguards for unlicensed occupations, helping explain the Yelp parity. Competitive pressure, third-party certification, the threat of litigation and online reviews, among other things, all keep unlicensed occupations accountable.
People who provide inferior service cannot last long in this environment, especially when customers have access to social media platforms and review sites. Instead of sharing their experiences with just family and friends, customers can reach audiences of millions—something that would have been impossible in prior decades.
Crowdsourcing has made many licenses obsolete. Connecticut prides itself on having a progressive mindset, yet the state did not step forward in 2019 with its new restrictions on marginalized service providers.
Connecticut stepped backward, reviving old thinking that already failed once.
Dick M. Carpenter II is co-author of “Raising Barriers, Not Quality” and senior director of strategic research at the Institute for Justice in Arlington, Va. Daryl James is an Institute for Justice writer.