Six years ago, when Michael LaPointe of Tolland walked into the state’s Smart Start Center in Rocky Hill, he wanted help starting a dog-training business. Although trained in obedience-teaching, Connecticut requires no experience for LaPointe to be a dog trainer.
But it wants $100 for him to run his shop.
Occupational licensing has become a major force of the Nutmeg State’s labor landscape. Twenty separate state agencies require some sort of licensing for Connecticut workers. More than 30 percent of the state’s workforce is covered by at least one license, be it a barber, doctor, or insurance salesperson. That makes Connecticut the second most-regulated labor pool in the country behind only California.
And increasingly, countless more entrepreneurs like LaPointe cannot open their businesses without one.
Both the state and workers benefit from the trend toward licensing, said Morris Kleiner, an economist at the University of Minnesota. The state profits from licensing fees, and workers can benefit when the labor pool for their occupation shrinks. But it has little benefit to consumers, he said.
“The difference between a good haircut and a bad haircut is two days,” Kleiner said, suggesting that the benefit to consumer of licensed barber — a regulated profession in all 50 states — is very small. “Occupational licensing can give some sense to consumers that quality is being maintained, but there’s not much evidence that quality is improved.”
Circumventing The Courts
The state Department of Consumer Protection, one of the Connecticut’s largest licensers, issued licenses to 217,281 individuals or businesses last year in roughly 180 different categories. Occupational licenses range from simple registration forms to complicated applications with special requirements for education and training. Home improvement contractors, for example, complete only a registration form and legally need no training. But a pharmacist, for example, must meet many special requirements to earn his license.
The benefit to consumers: The ability to circumvent the legal system, said DCP Commissioner Jerry Farrell. “The fact that we can take a variety of disciplinary actions against a licensee if he or she performs incompetent work or puts their license always at stake. That can be helpful to making the consumer made whole.”
Without the DCP, consumers would have to sue a shoddy worker in civil court, which can be a lengthy process, Farrell said. The commissioner himself has broad authority to either address consumer complaints on an ad-hoc basis, or refer a matter to one of the 16 different licensing boards attached to the department.
DCP handles about 8,000 written complaints against licensees each year and takes some type of action against roughly 1,200 of them.
To help those entrepreneurs better navigate the bureaucracy, the state launched the Smart Start program back in 1998. Run by the Connecticut Economic Resource Center, it is designed to be a one-stop shop where would-be business people can find all information needed to apply for licensing needed for a business.
“We try to relieve that burden, and make the state a little more user-friendly,” said Elizabeth Wallace, Smart Start’s director in Rocky Hill.
Since its introduction nine years ago, more than 36,000 people have sought the advice of Smart Start, although it’s unknown how many actually followed through and launched their businesses.
