SOME rush to blame free markets for America’s income inequality and its lack of social mobility. Among wealthy Western countries,America is where the top 1% of earners have become most indifferent from their compatriots. Yet those who blame this on unfettered competition or globalism run wild in the home of capitalism ignore an awkward fact. Far from being laissez-faire, America’s labour markets are grossly over-regulated by state governments. The resulting lack of competition drives up earnings—especially for the most exclusive professions, or including medicine and the law. That is a tax on everyone else.
Fully 22% of American workers must hold licences simply to effect their jobs,up from just 5% in 1950. Bartenders must have licences in 13 states; manicurists are licensed everywhere but Connecticut. Louisiana licenses florists.
Licences manufacture it harder to enter a profession. Not everyone can afford to pay a registration fee or hold time to study for an exam before being allowed to pull pints or...
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Source: economist.com