Does California require too many occupational licenses?

It does, according to an interesting op-ed we published last week by Adam B. Summers of the Reason Foundation. He wrote that the state requires 177 occupations be done by licensed practitioners more than any other state and twice the national average.

At a base level, that means it is harder for industrious people to start work as, say, tree trimmers or cabinetmakers because they have to get a license from the state.

At an economic level, it means prices are higher and competition is less. That’s because licenses hold down the number of people and companies that can do any given job.

The argument in favor of licenses is that they presumably assure the public that the license holder has a kind of minimum competency and is knowledgeable about laws, local codes and the like. You don’t want you fence builder to put up a fence that’s a foot too tall because he didn’t know local codes.

But there’s a way around that problem. It’s voluntary certification. A cabinetmaker, for example, can take a test that shows he understands the basics of his vocation and knows the local codes. So long as the certification process doesn’t cap the number of people who can become cabinetmakers, it opens up the vocation to more competitors and lower prices. And it gives the public some assurances.

Beyond that, I believe certification would raise the bar on competency. The reason: Consumers tend to hire any practitioner so long as he’s licensed. But consumers tend to shop around more, checking prices and references, for those who aren’t licensed. The practitioners must live or die on their reputations, the quality of their work and their prices.

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Last week the Business Journal published the first “Best Places to Work in L.A.” edition. The articles included short profiles of the local companies that were singled out as the top local work places, and the articles were accompanied by lists of the top-ranked companies. However, those articles ran side by side with advertisements from some of the companies that appeared on the lists and even some of the companies profiled in articles. Many of the ads pointed out that the advertisers appeared on the list as a best place to work.

That could create the impression the wrong impression that a company could buy its way onto the list or somehow benefit by paying to advertise.

I can assure you the editorial product was not compromised. The articles were planned and executed before we had any idea which companies may advertise. In other words, advertisers did not influence the handling of the articles.

Likewise, the ranking of best places to work was done independently before the companies on the list were asked to advertise. In other words, the ads did not influence which companies made it on the lists.

But the issue is perception, not reality. Nothing unethical occurred, but it doesn’t look good.

As a result, future “Best Places” sections will be advertorials. That way, the companies can still be ranked independently and they can advertise in that section if they choose. But the stories will be done outside of the newsroom.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].