Question

exas Learns You Can’t Be Laissez Faire About Licensing Plumbers
by David Wethe

In May, this year’s session of the Texas legislature ended in chaotic fashion with a confusing series of late-night votes. After the gavel fell, lawmakers—who meet only once every two years in a state resistant to the trammels of politics—realized they’d failed to renew the law authorizing the State Board of Plumbing Examiners. Created in 1947 to ensure clean and safe water for the Lone Star State, the plumbers’ licensing board has been a powerful authority. Every aspiring plumber has needed to make a pilgrimage to Austin to win the right to practice. Suddenly, with a nonstroke of the pen, anyone could do it.

Texas has always taken a laissez-faire attitude toward its biggest industries, including real estate (Houston is the largest U.S. city without zoning rules) and energy (streamlined permits helped create the world’s largest oil field). In the wake of the licensing debacle, Governor Greg Abbott, a Republican who made his reputation fighting off rules imposed by Washington, found himself confronting a coalition of working-class tradespeople and well-heeled builders who argued that amateurs would endanger their fellow Texans, not to mention their own livelihoods.

The board had come under fire in recent years for delays in pumping out plumbers, particularly after 2017’s Hurricane Harvey wrecked thousands of homes in the Houston area. With the body up for periodic review by the legislature, builders had asked for changes to speed up the licensing process. This was easily done. But they also wanted oversight of the board to be handed to the Texas Department of Licensing and Regulation, which also monitors cosmetologists and electricians. Lawmakers rejected that proposal on May 26, and a stopgap measure that would have renewed the board as it was previously constituted never made it to the floor.

“Everybody was very surprised this happened,” says Ned Muñoz, vice president for regulatory affairs at the Texas Association of Builders. “It came out of the blue. It was never a part of the conversation at our end.” Plumbers were distraught. “It’s a little scary because it’s going to flood the market with unqualified people,” says Scott Gomez of Houston, whose father and brothers are also plumbers. “I can see a lot of bad things happening,” including contamination of the water supply and flooded houses.

The board’s demise suited some people fine. In states such as New York and Kansas where plumbers aren’t regulated, there’s no evidence the public has been endangered, says Adam Thierer, a senior research fellow at the Mercatus Center at George Mason University, which has been heavily funded by Charles and David Koch. The mere existence of a licensing board makes it hard for new plumbers to get into the occupation and compete, says Arif Panju, who runs the Texas office of the Institute for Justice, a libertarian law firm. “There’s a barrier of entry to get into the profession, and there’s multiple barriers to progress through the profession,” he says. “The plumbing profession is ripe for reform.”

But Mary Conger, a master plumber in the Dallas area who teaches mandated continuing education courses, says the board was sensitive to the market. By opening more testing centers, it’s cut the delay for written exams from eight months to just six weeks, she adds.

As May wound down, Conger launched a fundraising campaign for a rally meant to persuade Abbott to call a special legislative session to reauthorize the board. On June 13, a day before plumbers gathered at the capitol, Abbott went around the legislature entirely and issued an emergency executive order reinstating the licensing body, arguing that cleanup from Hurricane Harvey required “a qualified workforce of licensed plumbers.” Representatives for Abbott didn’t return requests for comment. “Last I checked Texans elect Legislators and a Governor. Not a King,” Republican Representative Jonathan Stickland wrote on Twitter. (Stickland has since announced he won’t run for reelection after attracting unwanted attention for calling vaccine research “sorcery.”)

The Institute for Justice is examining Abbott’s order and hasn’t ruled out legal action, Panju says. Thierer says the governor is fighting the salubrious effects of an open market. “The real disaster here is that Texans are going to be denied greater choices in competition for affordable plumbing when they might need it most,” he adds.

Gomez describes a more nuanced view on a recent morning while driving to fix a balky water heater. “We like our freedom. We don’t like to be regulated,” he says. “But there are certain regulations that are really important.”

BOTTOM LINE -The unintentional dissolution of Texas’ plumbers’ licensing board has created a pro-regulation movement in a state that is typically on the forefront of deregulatory efforts.

The article discusses actions taken by Mary Conger, a master plumber who teaches mandated continuing education classes so that plumbers can maintain their licenses. If we take an opportunistic view of her action, it is a good example of what?

Choose one:A. copyright infringementB. quality assuranceC. consolidationD. rent-seeking behavior

Part 2   (1 point)

Consider two points discussed in the article. First, the failure of the Texas legislature to renew the law authorizing the State Board of Plumbing Examiners. Second, the impact of not renewing the board on the number of qualified plumbers. Which of the following can we say will happen to the price and quantity of plumbing services provided by unqualified plumbers?

Choose one:A. The price will fall, but the effect on quantity is unknown.B. The price will rise, but the effect on quantity is unknown.C. The price will fall, and the quantity will rise.D. The price and quantity will fall.

Answer 1

Answer (1) It is good example of Rent seeking behaviour , as above aimed at increasing living standard or wealth of licenced plumbers.

D. Rent seeking behaviour

Answer (2) The price will fall but effect on quantity will be unknown. As plumbing services by unqualified plumbers will be result in fall in prices of plumbing services but effect on quantity will be unknown.

A. The price will fall but effect on quantity will be unknown.

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