The Corner

Economy & Business

Today in Capital Matters: Free Trade and Occupational Licensing

Ryan Ellis of the Center for a Free Economy argues that neither party has approached trade policy the right way, and it needs an update:

Since Democrats are unlikely to settle their internal Big Labor-New Democrat struggle anytime soon, it falls to the Republicans to merge the neoconservative free-trade ideology of yesteryear with the unstrategic hostility of Trump’s trade views. The Covid plague and Russia’s menacing invasion of Ukraine provide such a north star: U.S. trade policy should be used to reward countries that align with U.S. interests, and should not be available to countries that choose to put themselves in either the Russian or Chinese spheres of influence.

To do so, the GOP must admit two large mistakes of its past presidents. President Trump was wrong to blow up the Trans-Pacific Partnership (TPP), which would have taken the nations in the Pacific Rim away from China’s sphere of influence and toward the West’s. For his part, President George W. Bush had too much of the doe-eyed 1990s free trader in him, which led to an overly liberal era of free-trade agreements, most notably his administration’s alliance with the business community to kill congressional efforts to end Chinese PNTR. . . .

Preston Cooper of the Foundation for Research on Equal Opportunity and Shoshana Weissmann of the R Street Institute write about how occupational licensing has contributed to our student-loan problems:

According to the Institute for Justice (IJ), every state requires aspiring cosmetologists to earn a license through at least 1,200 hours of training, and sometimes as many as 2,300 hours. Every year, colleges and trade schools grant nearly 100,000 certificates in cosmetology — almost one fourth of all professional certificates issued annually. Most of the schools that offer these training programs operate for profit. On average, they collect more than $10,000 in tuition from each student, even after accounting for taxpayer-funded financial aid such as Pell Grants. Graduates typically leave cosmetology programs with more than $12,000 in federal student-loan debt. The financial blow might be reduced if students could work for a wage while receiving their training, but IJ has documented that many beauty schools require students to serve paying customers for free — while they keep the profits.

A recent study conducted by the Foundation for Research on Equal Opportunity analyzed whether cosmetology programs increase graduate earnings enough to justify the cost of tuition and the time spent working for free.

The answer is a resounding no. . . .

Dominic Pino is the Thomas L. Rhodes Fellow at National Review Institute.
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