A note on licensure

"The institution of long apprenticeships can give no security that insufficient workmanship shall not frequently be exposed to public sale." -Adam Smith

I'm preparing to take my LGSW examination. It's about two years later than I should have taken it. (Note to all current MSW students: TAKE IT WHILE YOU'RE IN GRAD SCHOOL. THE SCORES STILL COUNT.) When I was hired at my current job, my interviewer was the Director of Clinical Services. He enjoys posing questions to people to unnerve them and get under their skin. He called me lazy for never having gotten my LGSW, even though I had been eligible for it for over a year. And to a certain degree, he was right. I am generally a lazy person and if I have no pressing reason to get the license, then I won't do it. My current job incentivizes me to get the LGSW by paying me $3,000 more yearly for having it. So, I am sitting for it next month.

When he posed that question to me in the interview, I basically said that I had no incentive to get it and that I had tried originally, but employers and others were neglectful about getting recommendations back to me (true story). Although true, I neglected to mention the main reason (aside from laziness) that I did not get my license straight out of school. I am politically and morally opposed to the current licensing regime in social work. (A cynic may call that a rationalization.)

For those who don't know, a brief primer on social work licensure in DC. A social worker who completes a bachelor's level course in social work may pay $230, sit for an exam, and if successful, receive that level of licensure. That level is largely useless, however. A social worker who has their MSW may apply for an LGSW, pay $230 to the DC board and $230 to take the exam, collect recommendations, and if successful, receive that level of licensure. They must then collect two years worth of supervision from a licensed professional (which may or may not be paid for or provided by an employer), pay another $460, pay for continuing education courses, and if he or she successfully completes the test, they are awarded an independent level of licensure. At this level, a person can practice without supervision and will likely open their own practice or take a higher-paying position.

It seems trite and a little simplistic to call this structure a racket. But the results of this licensing system, which are largely similar across state lines thanks to the efforts of the ASWB, disenfranchise younger social workers, make it difficult to social workers to move, and artificially limit the supply of helpers.

When a social worker like myself graduates from their MSW program, they will start a job search that is fundamentally altered by the licensing regime. Though this is somewhat different in Virginia (their licensing scheme is more liberal), my options in DC were limited essentially to case management and ACT team work. Part of the problem was the lack of career assistance at my MSW program. The majority of the problem, however, was that most positions wanted the independent level of licensure. A position at St. Elizabeth's was impossible, even though I was strongly recommended, because they only hired at the LICSW level. Actually, all hospital positions were out for the same reason. No independently licensed professionals were offering to supervise LGSWs as part of a group practice. My only option was case management.

Employers, evidently, did not want to invest the time and money to train employees. Or they wanted to be able to brag that their staff all had terminal licensure in their degree area. Or it was pressure from public sector or private sector unions that required licensure (most of these jobs were union jobs). I really don't know. Perhaps it was a combination of all of those. In practice, the licensing scheme severely limits the opportunities for a young social worker to begin work at a large facility or build a career within one organization.

The oddest part about it was that I was trained for these jobs in both of my field placements. I performed these same tasks (assessment, discharge planning, etc.) and was supervised by these exact staff members, but when I graduate and seek out the employment I was trained for, I am told that I do not have the requisite experience. And there is no way for me to get that experience at a different company. In fact, I have to go into an entirely different area, case management, to get the licensure requirements before I can work there.

Independent social workers (those with the highest level of licensure) are also those who set the rules for new social workers, create the tests, staff the licensing boards, and provide continuing education courses. They provide individual and group supervision for profit. They offer test preparation courses. They benefit from an artificially small pool of applicants for new jobs. They do not have to abide by the new standards they set for graduating social workers.

These professionals are granted a total monopoly over social work practice. Under the current regime, it is illegal for me to bill for my own services. I must be supervised by an independently licensed professional. I cannot hang out a shingle as a mental health counselor and bill for services. If my organization did not provide supervision, I would have to pay an independently licensed clinician to accumulate hours for my license.

In sum, it is a system designed to benefit those workers already in system at the expense of those who are just starting. Licensure’s distorting effects cause the salaries of independent social workers to increase while salaries for LGSWs and unlicensed practitioners remain stagnant or decline. Its original justification, protecting those receiving help from unscrupulous or inexperienced help is nowhere evident.

This is a system designed by those profiting to extract money and limit competition. As states move closer and closer to more strenuous licensing requirements (New York and California being prime examples), this phenomenon will only get worse. The supply of social workers with the proper level of licensure will decrease. There will be less competition and the industry will become more sclerotic than it already is. And if a social worker becomes fed up with the licensing system in their state, they will find that they have to undergo the payment and process again in the next state. Social workers must balance the benefits of monopoly power and rent-seeking in the profession with the financial and mental costs of fulfilling ever more cumbersome requirements. Again, nowhere does the consumer benefit.

What effects has licensing been shown to have on the consumer? Well, to start, there is no evidence that licensing regimes actually benefit the consumer by providing better service, as quality of service is almost never evaluated on an organizational let alone professional level. Perhaps a study that evaluated the quality of service (however defined) between states with more stringent and more lenient licensing schemes. Until such a study is performed, however, there is no evidence for licensing’s purported main effect—improving the quality of service.

The proven effects of licensing on the consumer are as follows. It increases the costs of receiving services, as the market has been perniciously altered to reduce supply. Licensure also creates a marketplace that is less open to competition. Both of these financial costs, for those with low-income, are borne by the taxpayer in the form of Medicare payments and government salaries. Even if a person with low-income were to approach mental health in the same way a middle-class or upper-class person does, by engaging in fee-for-service treatment, they will never be able to pay the inflated price. Inflated prices are countered by government cost controls, and service organizations and government become locked in a duel over money—distracting mightily from the actual mission of social work, client service. The psychological costs of these distortions are borne by the consumers themselves.

There is an argument to be made, at least in comparison to other licensed professions, that social work should have some sort of licensing apparatus. Unlike, for instance, hair stylists and interior designers (where licensure exists in absurdity), we actually work with vulnerable people, and the in case of clinical social workers, do so with the goal of manipulating a person’s life. However, if the goal is to limit the exposure to disreputable and undertrained social workers, I fail to see how a licensing scheme catches those individuals most likely to commit ethical violations or provide poor service.

Proponents of occupational licensure in general (not specific to social work) often cite other plausible reasons for the licensing schemes. For instance, there is an incentive for practitioners to invest in human capital and advanced training if low-quality substitutes are excluded from the market. Little empirical evidence exists to support this hypothesis. While continuing education is necessary for licensure in social work, better social workers will already seek out specialized, in-depth education for personal fulfillment, career advancement, and financial reasons. And in my (apparently less-than-humble) opinion, less-skilled social workers, the ones these policies are designed to address, will find the easiest way to complete the requirement, rather than fulfill the mission of education.

Another argument in favor of licensure is that it signals to clients that the services will be of a certain guaranteed quality. I find it laughable that my clients would ask me or my colleagues if we were licensed. It’s simply not in their thought process. Anyone who has looked down at the work of another social worker will also laugh at the ensuring quality part of that argument. Perhaps instead of quality treatment, it ensures ethical treatment. I find that argument at least plausible.

Regardless, there are far less costly ways to ensure ethics and protect against fraud and abuse than the stratified licensure scheme currently in place. One such way is through certification. Certification is a process by which a government entity administers and examination and certifies professionals at a given level of knowledge and skill. (Licensure requires that a self-sustaining non-profit entity—composed of professionals in that field— administers licensure tests and requirements, not the government.) Consumers are then free to choose a certified practitioner or uncertified. It is not illegal for a person to practice without certification. This, in turn, drives consumer costs down and increases competition and overall quality.

This topic brings me to a point more in line with the regular fare of this blog--how the unintended consequences of laws impact the vulnerable and the poor. Although I am often out of my depths with genuine economics, friends who I describe my point of view to will often ask me what economic policies should be changed to help the poor. My first answer is the minimum wage (another post for another time). The second is occupational licensing laws. According to the President's economic team, occupational licensing laws account for about .5%-1% of total unemployment. Who are those laws most likely to affect? Those who cannot afford the cost of attaining a license. For them, getting a license for hairdressing makes no sense. It's something they do in their spare time to make a little extra money (tax-free!). If they attempted to pool their resources and start, for instance, an African hair-braiding salon, they would need to deal not only with myriad regulatory codes for such an enterprise (a blog post to itself) but pay for training and licensure by the government. This is for something that they are already doing. Moving these workers from the shadow economy into the legitimate economy should be a goal for economic planners. Instead, their designs force these transactions underground and drive up the unemployment rate.