4 ms·

I'm a PE (electrical) and I think what most people don't realize is that the licensing was largely driven by the insurance industry. Let's say you pay some peo

by imgabe 11y ago

I'm a PE (electrical) and I think what most people don't realize is that the licensing was largely driven by the insurance industry. Let's say you pay some people to design a building for you. You get insurance of course. A year later, the building falls down. You call your insurance company to collect. The first thing they ask is whether you took every reasonable precaution you could to prevent that from happening. Part of that would include having a licensed structural engineer design the building. If you let Joe Shmoe off the street design your building and it falls down, the insurance company is going to say you're basically SOL, because you didn't find a person you could verify was qualified. It's really about transferring the liability from the building owner to the engineer. If there's a mistake in the design, the engineer gets sued. Guess what happens then? The engineer has professional liability insurance to pay that! How does the professional liability insurance company decide who to insure? Well, they insure people with licenses, of course. It's an elaborate scheme to transfer money from one insurance company to another. Is it necessary for a florist? Probably not. I can't think of a situation where you'd need to sue a florist. Interior decorator might be more problematic than people realize. First, it depends on whether it's a decorator or a designer. A designer may move walls around, affecting egress paths, and can possibly have some life safety implications, so they should be able to take responsibility for that.

wrong_variable 10y ago
The sad part is the industries that do actually need some quality control are the ones that are completely unlicensed. If a florist does something stupid - no one gets hurts. But bankers,programmers treat their profession like the wild west.
- nine_k 10y ago
  Insurance companies look okay with that. User themselves are, too: look at all these BSD-style "provided as-is, explicitly no guarantees" licenses that people take enthusiastically. And for something aircraft-grade or medical-grade, you definitely meet with rather strict controls on a case-by-case basis (unlike the wholesale licensing).
- Shivatron 10y ago
  "Bankers" is obviously a broad term, but I'd point out that just about everyone employed in the financial industry in a role where they are giving advice or soliciting/executing transactions have very strict licensing and continuing education requirements. Just look at the list of FINRA licensing exams: http://www.finra.org/industry/qualification-exams http://www.finra.org/industry/qualification-exams (Of course, even licensed persons may choose to make poor choices. That said, I've taken a few of those exams, and they are no joke.)
  - DavidAdams 10y ago
    And the FINRA licensing exams focus almost entirely on the laws that are intended to protect consumers from bad actors. To study for those exams is to have it drilled into your head what you can and can't do. Unfortunately, much of what collapsed the US economy wasn't actually illegal, and in the case where laws were broken, the bankers were comfortable with knowingly bending the rules.
- TrevorJ 10y ago
  FINRA is no joke, I don't think your comment is actually accurate, though I do understand the sentiment.
JoshTriplett 10y ago
> I'm a PE (electrical) and I think what most people don't realize is that the licensing was largely driven by the insurance industry. A certification program endorsed by insurance companies seems like a great idea, as does contractor-maintained liability insurance. And in a field where contractors have little to differentiate themselves except reputation and word of mouth, many specifically advertise themselves as "licensed and bonded", and people seeking a contractor look for those specifically. (Some kind of trademarked certification seems even better, to avoid any ambiguity.) All of those seem sufficient to drive contractors to voluntarily step up and seek such certification. None of that requires mandatory licensing, though.
- imgabe 10y ago
  For residential work, maybe, but that is already much less regulated. For anything commercial, where you are exposed to potential lawsuits from the general public it wouldn't make sense to ever use anyone unlicensed anyway.
  - brudgers 10y ago
    Happens all the time in my [red] neck of the woods.
- michaelbuddy 10y ago
  If you want to pull permits, get disconnected and reconnected by the electrical providers, you're gonna need a license. Also if you get an inspection on your house because you want to sell it and they find that unlicensed work was performed and no inspection found on file from when work was performed, guess what, the city can make you rip it out and redo it by licensed individual subject to a municipal inspector. Now can you do electrical 'work' on residential without a permit or license? yes and sometimes it might be ignored but if the inspector(s) want to not ignore it, they can make you go by the regulations of your area.
  - JoshTriplett 10y ago
    That's the current state of affairs, yes; I wasn't talking about the current state of affairs.
lisper 10y ago
> It's an elaborate scheme That's an unfair characterization. Licensure is not just about protectionism, it is also about making sure that people who need to know what they're doing actually know what they're doing. And while it's far from perfect, it's pretty effective. In the U.S. it is very rare for buildings to collapse, or faulty wiring to set buildings on fire. That is in no small measure because we enforce building codes and licensure requirements for structural and electrical engineers.
- imgabe 10y ago
  That's true. It was meant to be tongue-in-cheek.
- HillaryBriss 10y ago
  It also creates a sort of backstop of accountability. If you wire something wrong and it starts a fire, you're sued. If you don't have any money, your insurance company is sued. And if your insurance company doesn't want to be sued so much, it makes sure you have a certification or a license or basic professional degrees of competence before insuring you. And to make it all seem like it operates on a fair and level playing field, some independent entity has to verify that the requirements for licensing are met. And I think we all know what that has meant, historically: multiple choice tests graded by a Scantron machine.
geofft 10y ago
> Well, they insure people with licenses, of course. It's an elaborate scheme to transfer money from one insurance company to another. I think that's missing the point (at least the point in theory; the point in practice might be different). The idea is that, if you're licensed, you're sufficiently unlikely to make mistakes that an insurance company can profitably insure people like you without having to charge any individual one of you too much money. In essence, it's a way of converting the concept "People who know what they're doing are less likely to screw up" into something the market can quantify and deal with and reduce variance on. In theory, the amount of money the building owners pay their own building insurance company is exactly equal to the chance of their building falling down times the cost of that building (plus the overhead of calculating that risk, etc.). If you want that cost to do down, the most efficient way is to convincingly lower that risk. Assuming the market is reasonably effective at transmitting information (which is a big assumption), insurance seems like a perfectly reasonable way to use the market to calculate.
SilasX 10y ago
That doesn't make sense. Insurance companies can make policies conditional on certifications whether or not those certs are mandatory. Likewise, they can sub-insure away some of the risks to the engineer without the mandate. You ask for a policy on your house, they ask if a person qualified by XYZ standard approved it. If we want to make certain protections mandatory, we can at least move the regulations up one abstraction level. Instead of "you must meet these standards", it could be something more general like, "you must have an insurance policy against these events for this much", and people go with whatever insurer is willing to take that risk. That would allow for more experimentation about which standards are good enough or too stringent, by the people who have something to lose if they're not strict enough, and provide an impetus for obsolete bits to be removed.
- imgabe 10y ago
  The insurance companies lobby for the laws. They also sponsor the organizations that write the building codes, which are then adopted into law.
  - TheMagicHorsey 10y ago
    I have seen no evidence that insurance companies have lobbied for occupational certification laws. I don't think you are right on this.
- brudgers 10y ago
  Houses don't typically require licensed design professionals in the US and there are quantum life safety differences between a single family dwelling and other occupancies. These differences are why a McDonald's kitchen has a HALON fire suppression system over the cooking systems, a movie theater has fire sprinklers, and an office building has fire resistant construction around the stairs. The role of the insurance industry is mostly a result of its having a vested interest in collecting data and mitigating risks. Keep in mind that "meeting code" is a standard for the worst legally allowed construction and hiring professionals is a market driven improvement over the provisions dealing with shoddy construction one finds in the Code of Hammurabi.

by imgabe 11y ago

wrong_variable 10y ago

The sad part is the industries that do actually need some quality control are the ones that are completely unlicensed. If a florist does something stupid - no one gets hurts. But bankers,programmers treat their profession like the wild west.

nine_k 10y ago
Insurance companies look okay with that. User themselves are, too: look at all these BSD-style "provided as-is, explicitly no guarantees" licenses that people take enthusiastically. And for something aircraft-grade or medical-grade, you definitely meet with rather strict controls on a case-by-case basis (unlike the wholesale licensing).
Shivatron 10y ago
"Bankers" is obviously a broad term, but I'd point out that just about everyone employed in the financial industry in a role where they are giving advice or soliciting/executing transactions have very strict licensing and continuing education requirements. Just look at the list of FINRA licensing exams: http://www.finra.org/industry/qualification-exams http://www.finra.org/industry/qualification-exams (Of course, even licensed persons may choose to make poor choices. That said, I've taken a few of those exams, and they are no joke.)
- DavidAdams 10y ago
  And the FINRA licensing exams focus almost entirely on the laws that are intended to protect consumers from bad actors. To study for those exams is to have it drilled into your head what you can and can't do. Unfortunately, much of what collapsed the US economy wasn't actually illegal, and in the case where laws were broken, the bankers were comfortable with knowingly bending the rules.
TrevorJ 10y ago
FINRA is no joke, I don't think your comment is actually accurate, though I do understand the sentiment.

JoshTriplett 10y ago

> I'm a PE (electrical) and I think what most people don't realize is that the licensing was largely driven by the insurance industry. A certification program endorsed by insurance companies seems like a great idea, as does contractor-maintained liability insurance. And in a field where contractors have little to differentiate themselves except reputation and word of mouth, many specifically advertise themselves as "licensed and bonded", and people seeking a contractor look for those specifically. (Some kind of trademarked certification seems even better, to avoid any ambiguity.) All of those seem sufficient to drive contractors to voluntarily step up and seek such certification. None of that requires mandatory licensing, though.

imgabe 10y ago
For residential work, maybe, but that is already much less regulated. For anything commercial, where you are exposed to potential lawsuits from the general public it wouldn't make sense to ever use anyone unlicensed anyway.
- brudgers 10y ago
  Happens all the time in my [red] neck of the woods.
michaelbuddy 10y ago
If you want to pull permits, get disconnected and reconnected by the electrical providers, you're gonna need a license. Also if you get an inspection on your house because you want to sell it and they find that unlicensed work was performed and no inspection found on file from when work was performed, guess what, the city can make you rip it out and redo it by licensed individual subject to a municipal inspector. Now can you do electrical 'work' on residential without a permit or license? yes and sometimes it might be ignored but if the inspector(s) want to not ignore it, they can make you go by the regulations of your area.
- JoshTriplett 10y ago
  That's the current state of affairs, yes; I wasn't talking about the current state of affairs.

lisper 10y ago

> It's an elaborate scheme That's an unfair characterization. Licensure is not just about protectionism, it is also about making sure that people who need to know what they're doing actually know what they're doing. And while it's far from perfect, it's pretty effective. In the U.S. it is very rare for buildings to collapse, or faulty wiring to set buildings on fire. That is in no small measure because we enforce building codes and licensure requirements for structural and electrical engineers.

imgabe 10y ago
That's true. It was meant to be tongue-in-cheek.
HillaryBriss 10y ago
It also creates a sort of backstop of accountability. If you wire something wrong and it starts a fire, you're sued. If you don't have any money, your insurance company is sued. And if your insurance company doesn't want to be sued so much, it makes sure you have a certification or a license or basic professional degrees of competence before insuring you. And to make it all seem like it operates on a fair and level playing field, some independent entity has to verify that the requirements for licensing are met. And I think we all know what that has meant, historically: multiple choice tests graded by a Scantron machine.

geofft 10y ago

> Well, they insure people with licenses, of course. It's an elaborate scheme to transfer money from one insurance company to another. I think that's missing the point (at least the point in theory; the point in practice might be different). The idea is that, if you're licensed, you're sufficiently unlikely to make mistakes that an insurance company can profitably insure people like you without having to charge any individual one of you too much money. In essence, it's a way of converting the concept "People who know what they're doing are less likely to screw up" into something the market can quantify and deal with and reduce variance on. In theory, the amount of money the building owners pay their own building insurance company is exactly equal to the chance of their building falling down times the cost of that building (plus the overhead of calculating that risk, etc.). If you want that cost to do down, the most efficient way is to convincingly lower that risk. Assuming the market is reasonably effective at transmitting information (which is a big assumption), insurance seems like a perfectly reasonable way to use the market to calculate.

SilasX 10y ago

That doesn't make sense. Insurance companies can make policies conditional on certifications whether or not those certs are mandatory. Likewise, they can sub-insure away some of the risks to the engineer without the mandate. You ask for a policy on your house, they ask if a person qualified by XYZ standard approved it. If we want to make certain protections mandatory, we can at least move the regulations up one abstraction level. Instead of "you must meet these standards", it could be something more general like, "you must have an insurance policy against these events for this much", and people go with whatever insurer is willing to take that risk. That would allow for more experimentation about which standards are good enough or too stringent, by the people who have something to lose if they're not strict enough, and provide an impetus for obsolete bits to be removed.

imgabe 10y ago
The insurance companies lobby for the laws. They also sponsor the organizations that write the building codes, which are then adopted into law.
- TheMagicHorsey 10y ago
  I have seen no evidence that insurance companies have lobbied for occupational certification laws. I don't think you are right on this.
brudgers 10y ago
Houses don't typically require licensed design professionals in the US and there are quantum life safety differences between a single family dwelling and other occupancies. These differences are why a McDonald's kitchen has a HALON fire suppression system over the cooking systems, a movie theater has fire sprinklers, and an office building has fire resistant construction around the stairs. The role of the insurance industry is mostly a result of its having a vested interest in collecting data and mitigating risks. Keep in mind that "meeting code" is a standard for the worst legally allowed construction and hiring professionals is a market driven improvement over the provisions dealing with shoddy construction one finds in the Code of Hammurabi.