Arnold Kling  

Tales from the Job Market

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This WSJ Story (you may have to News-Google it) is mostly about workers with the wrong skills for the current market. But I note this:

BestCare Home Health Agency, a Fresno, Calif., nonprofit that provides nursing and other in-home health services, has yet to hire an occupational therapist--in a field where competition for talent is keen. The agency is offering $55 to $65 an hour, a $15,000 signing bonus and help paying off student loans. Assistant director Matt Sempre has even taken to cold-calling potential employees.

That strikes me as a licensing/credentialing problem, as opposed to a skills mismatch problem. Get government regulation out of the way and the shortage of OT's will disappear. There may be some high-skill components to the job, but there are plenty of components that you could train a high school graduate to do in six months or less.

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CATEGORIES: Labor Market

COMMENTS (11 to date)
ThomasL writes:

Something I read, maybe on of Dr Kling's books, actually, mentioned about some soothsayers predicting a long-term shortage of Java developers (this was ca. 1999 or so).

As the writer pointed out, this was more than a bit silly, since the wages would draw in new people, and particularly people already skilled in some other language that would adapt.

Except, imagine if because of some kind of government regulation, a programmer had to be licensed to in order to write in Java, or C#, Python, or Ruby, or Objective C, or whatever the latest trend happened to be. Certainly innovation would not be benefited... No regulation or licensing board would have the ability to adapt at the pace that the fads have been changing.

Even bringing it up almost makes me concerned that in 20 years we are going to look back fondly on the days you could write an phone app without obtaining a state license first.

ThomasL writes:

I forgot to make my point. :)

The point is, I think most people would see the harm done by a scheme to impose licensing of programmers, for example, because they are so accustomed to seeing what a world looks like where technical innovation is free and unlicensed.

In the case of medicine, they can hardly conceive of an unlicensed world, and so all the foregone benefits go unlamented.

Jonathan Bechtel writes:

What Thomas L said.

I think the only thing that might break the licensing cartels in the medical profession is prices going so high that people will have no choice to go around them, or medical tourism will develop to the point that they can be circumvented entirely.

Shangwen writes:

Lots of people on the WSJ site commenting that employers should just hire an unqualified person and train them on the job. But with high credentialism, you get increased litigation risk, and no one would want to be seen as taking on an unlicensed employee. Plus, what would they do during training? The whole point of credentialism is to ensure knowledgeable and skilled people can't even lift a finger with the imprimatur. So credentialism is also an education bubble, in addition to which, with accreditation, the ability to educate is credentialed.

As for those wages...that is twice what I have seen OTs start at in other jurisdictions.

Roger Sweeny writes:

But if you trained a high school graduate in six months, you'd probably pay the OT less than a 4 year college plus state license OT, and that would bring down medical care costs, and wouldn't that be a bad thing?

Floccina writes:

I think that is one of those jobs were you could have an OT overseeing 5 people with no education doing the work. I think that the OT would just need to start them with each patient and tell them to ask for help when they need it. The OT could also take the difficult cases.

Bill D writes:

A fully certified therapist requires a masters degree.

Obviously many of the tasks identified would not require that level of training.

An Occupational Therapist Assistant only requires an associates degree.

Question: how to ensure that required staffing levels don't force too much of the former.

joshua writes:

Blaming unemployment on licensing regulations is very attractive to someone of my bias. But I wonder: can you argue that licensing regulations have significantly increased since 2008? Or would you argue that general regulation creep has handicapped our ability to recover from high unemployment brought about by other factors?

Dave Schuler writes:

That might be true. It's probably true of all jobs. But does it really provide a solution?

Go through your day and tally up the things you do that could be done by a high school student with six months of training. Maybe it's 50%. Maybe it's 90%.

Does that mean that 50% or 90% of economists should be replaced by high school students with six months of training? Or does it mean that you're really being paid for 10% of your time?

mark writes:

One of the issues is reimbursement regulations, both government and private. You can charge $X for the OT assistant and $Y for the fully credentialed OT. It is somewhat like teachers. Whether the treatment works and whether the customer / patient is satisfied is irrelevant.

This is definitely a field where the 4-year college model / graduate school model ise completely wrong. It should be much more trade school, apprenticeships and internships.

ThomasL writes:


It doesn't have to be. Say I was a bartender, and saw the big boom in real estate and got my license to be either an agent or a mortgage broker studying nights.

Now the bust hits, I can't sell any houses, but I see this article about what OTs get paid, so I think I'll be an OT. Except I need a master's degree and a license. I'm years away from that, so the fact they are booming doesn't really help me at all.

It is easy to see this in the worst case. Just imagine a world where every single job required a license. During good times things would be pretty smooth, because you could obtain one license while working under another. Things would be kind of slow to change, but there is no reason for massive unemployment. In bad times, however, it is dangerously fragile, because if my occupation goes away, I am barred from doing anything else until I earn a new license, which takes time I may not have when I have no income. Plus, I may not know what I want to do, and the fact that I can't try anything out without investing years in advance training is daunting. I might be inclined to hope real estate comes back.

Basically licensing puts up a lot of friction that is an annoyance in good times, but a barrier in bad.

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