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Better Living Through Electricity

Issue Backgrounder

October 5, 1999

By Dwight Filley

Synopsis: House Bill 1312 allows electricians to hire three apprentices. Current law allows only

one.

Discussion: There are several reasons why electricians should be allowed to hire more than one

apprentice. First, ever since the Middle Ages, the apprentice system has been used and abused.

Although it is a useful system for training newcomers to a trade, it is also routinely used to

restrict entry into the trade so as to hold wages artificially high.

While high wages seem desirable, the unfortunate side effect of excluding some workers so as to

benefit others, is to discriminate against lower income workers. If, for example, a licensed

electrician is restricted by Colorado law so that he can hire only one apprentice, he will naturally

hire the most qualified apprentice he can find, so as to get the best help available. If, on the other

hand, he were permitted to hire several apprentices, those with lower qualifications would have a

better chance to get hired.

Secondly, any form of regulation hurts Colorado businesses. A survey by the accounting firm of

Arthur Anderson found that government regulation is far and away the biggest challenge facing

medium-sized American businesses. Almost three times as many businesses considered

government regulation as a bigger problem than turning a profit.

While some regulations are necessary to protect health and safety, or to prevent customer fraud,the law restricting the number of apprentices does none of these things. Its only purpose is to

restrict the number of electricians, so that those who do become electricians can charge more for

their services.

Third, economic progress ultimately boils down to increasing the productivity of the Colorado

worker. Clearly, an electrician with three apprentices will be more productive that an electrician

who is limited to just one. Finally, any regulation has benefits and costs, and should only be kept

on the books if the benefits outweigh the costs. A number of studies suggest that regulatory

programs, after some initial period where benefits exceed costs, often degenerate until they have

much higher costs than benefits.

There are two potential benefits of restricting the number of electrical apprentices: It is possible

that by only having one apprentice, the electrician can train that apprentice more throughly than

if his training was diluted by others. However, the contractor licensing system insures that only

trained electricians get licenses, so even if training is less effective, the customer is still protected.

The other benefit, as stated above, is to hold wages artificially high for a few workers.

The cost, on the other hand, is the excluding of less trained, often disadvantaged workers, who,

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because of regulations such as these, are often stuck in dead-end jobs with little prospect of

promotion.

For more: Weidenbaum, M., Government Regulation and Medium-Sized Business (1996),

Contemporary Issues Series 77, The Center for the Study of American Business, Washington

University in St. Louis. Vedder, R.K.,Regulations Trillion-Dollar Drag on Productivity (1996),(Center for the Study of American Business, Policy Brief 165.

Prepared by Dwight Filley, Senior Fellow, Independence Institute