Below is a transcribed version of The Nail Hub Podcast, Episode 95: The Death of Licensing. To listen, click here.

Elizabeth: Welcome to "The Nail Hub" podcast powered by "NAILS Magazine," where you'll find all the business advice motivation and nail industry information you need to be a successful nail professional. I'm Elizabeth Morris. And thank you for joining me today.  

So, Hermann, I've got you on the podcast today because we've been talking about this for a while, just me and you, but I see it more and more and more through everything that I see online, and on Facebook, and in the nail community. And you and I were just talking the other night, about the article that I shared with you about how, you know, it's even gone to the point where the Board of Cosmetology is trying to crack down on volunteer work now. And so there's just this environment of, I would say over-regulation, right? In an effort to somehow make the community safer, make consumers safer, protect the professionalism of professional nail techs, especially here in the United States, because that's how we operate.  

And across the media, there are states saying, "We're looking at deregulating." I mean, Connecticut already has no licensing, but Texas, you know, just try to do it, Arizona's in the process of trying to do it, and there's a whole bunch of states who are looking at this. So I wanted to have you on here because you study this a lot and you're also very organized with your thoughts and you're very good at explaining things in a way that the average person can understand, especially, you know, even someone like me who doesn't follow stuff as much. But I wanted to ask you, you know, from the perspective of a nail tech, and I'm a licensed nail tech. I'm actually licensed in two states now, right?  

So I follow the rules just like everybody else but even me, I get frustrated. And I know that there is a certain part of my brain that tells me, "If we didn't have licenses, you know, how would I still be successful as a nail technician?" So maybe you can share with me what your initial thoughts are, first, on just the thought of the protectionism of having a license from a professional's perspective.   

Hermann: Sure. This is a very sensitive topic and a very...I mean, and I don't think it needs to be as controversial as it is. I think, the biggest reason why it can be touchy is because most people, I think, have a very emotional reaction to this topic, a knee-jerk reaction, because they're so invested in, one way or the other, right? It's their livelihood, whether they be techs, whether they be people that are educators, or whatnot.  

So, I think, you're giving me too much credit. I do know a lot about this stuff and I do read and study a lot about this stuff, economics in general and that type of stuff, and you're giving me too much credit in thinking that I have a good way of putting it in layman's terms because sometimes this stuff is just so complicated and for a good reason. The more complicated things are...  

Elizabeth: Yeah, but I like the way that you walk through it with me because every time we have one of these conversations, just between the two of us, you take what I'm gonna... you know, you take kind of my frantic response to something and you walk me through, "Okay, let's look at this from, you know, one step at a time," and I really like the way that you take these things...  

Hermann: Well, I appreciate that. And I'll try to do my best on this episode to see if I can do that in a way that will resonate with our listeners and that people try to see. And here we don't want to show just one side, it's important that everybody get a little bit of an insight into both sides of the argument. We don't want to, you know, come off as shills for one side or the other. I think it is important, if you're going to argue for something, that you know what the opposition is actually saying, right?   

Elizabeth: Right.   Hermann: So I don't know you wanna start in terms of just walking through, you know, what some of these concepts are? So we're gonna talk...   

Elizabeth: Well, I think that...   

Hermann: ...theory.   

Elizabeth: Yeah, theory. Well, theory but, I think, theory apply to...   

Hermann: And then we'll bring it down to, you know, in actual practical terms.   

Elizabeth: Yeah. I think, the biggest thing that I see as a common...well, there's two common things that I see that if you were to boil down all of the reactions, the complaints, the statements, if you were to boil it down into two categories, and I don't know if this is helpful or not, but one would be, if licensing doesn't exist, okay, which it does now in most situations in the United States, right? So let's say tomorrow, the licensing gets taken away, a lot of people are afraid about, they're gonna lose their clients, right? That all of a sudden tomorrow if licensing goes away, what's the point to consumers to continue going to a licensed professional when anybody and their mother can become a nail tech now, right? So that's, like, the first part of it.  

Hermann: Yeah,okay. Well, there's a result to impact, so let's actually start there because that's a good starting point. So let's talk about licensing just, in theory just in general, and then we can start kind of...we'll start big and work our way down to small to moderate, right?   

Elizabeth: Okay.  

Hermann: Okay, so let's just think about what the licensing concept means, that means that you have the ability or capacity, let's say, to do X. So that might be nails, hair, whatever, mechanic, whatever.   

Elizabeth: Right, like you've been verified by someone that you...  

Hermann: Well, not even necessarily, we're not even there yet, okay?  

Elizabeth: Okay, got it.   Hermann: We're just talking in general.  

Elizabeth: Just in general, okay.  

Hermann: So they're just a concept of a license, okay? You are able to do X service or whatever, and yet the government comes in and says, "No, you have to pay us for the right to do X, before you do X."  

Elizabeth: Okay, so let me just make sure I understand what you're saying here. So licensing is really the government coming in and getting involved in something that, me... let's say I'm just a natural-born awesome nail tech, I've studied. I've taken classes.  

Hermann: I'll give you an even better and more traditional and realistic example. You grew up with your mom doing nails...  

Elizabeth: Oh, that's a good one.  

Hermann: So by the time you're 15 years old, you've done a ton of people's nails, you've essentially been like an apprentice.  

Elizabeth: You've been living in the salon.  

Hermann: You've basically were like an apprentice but it just so happened that you grew up in a salon, you've been doing nails almost your entire life, right?  

Elizabeth: There is a lot of people like that.   

Hermann: And so by the time you're in your mid-teens, let's say, you're already a pretty darn good nail tech. Maybe not the best in the world but you could do nails. So you have the necessary skills and abilities and possibly been already the clientele, because there's been other women that basically you've grown up around, and that now know you and trust you, and they already have verified that you are, you know, a child prodigy and you can do amazing nails, and you can do all this stuff.   And now, "Hey, we want little Liz to do my nails because she's awesome. I've seen the stuff that she can do, and what she posts on Instagram and the videos that she post. I want..." Well, you can't. Even though you have already the skills, and the abilities, and the clientele and everything you need to start making money now, you still have to get a privilege. You have to pay for the privilege from the state, okay?  

Elizabeth: Right.   

Hermann: So let's make sure that people don't, you know, correlate to things that are different which is the license and then there's other side of it which is training and certification and that kind of stuff. Because you can go to school and get certified by a different school and instructors and this or that the other thing, you still, on top of that, have to still get licensed, okay?  

Elizabeth: Right. And most nail techs have that, which is they have to become educated in the actual skill set and they take a lot of classes to become better at what they do, I mean, even starting out. But, even me, I mean, I don't even know how many classes I've been to now in the last five years. I mean, it was just constant education. But you're right, I mean, even after moving to another state, the first thing was, "If you wanna do anything with your trade, you have to go get permission to do it. Even though when we moved here, for example, I was already a working nail technician. I already had a bunch of training even way beyond what anyone would require but, again...  

Hermann: You just have to go through the hoops.  

Elizabeth: ...I have to ask for a permission. Yeah, absolutely and pay the money.   Hermann: Right, correct.  

Elizabeth: Thank God, I didn't have to go to school again but still, I mean, it's annoying that you have to do that, right?  

Hermann: Yes.  

Elizabeth: Okay.   

Hermann: Okay.  

Elizabeth: That makes sense.  

Hermann: So that is the concept of licensing and that's how it takes place. So I just wanna underscore the fact here, it's important that people understand that even in the cases when you already possess the necessary skills and abilities, that you still have to get the same level of licensing as someone who's starting from scratch, right? So, there, already you're seeing an issue here in terms of the lack of equality between different people and that they essentially have to be forced into the same box, right?  

Elizabeth: Yeah, and it seems counterintuitive a little bit because you were thing that you mentioned was, "Hey, Liz," you know, growing up in in a salon with her mom working and I already know the business, let's say, and I'm ready to strike out on my own and I'm ready to contribute to my local economy, right? By becoming a business owner and hopefully passing the buck on which is, you know, training other people that come to work with me, right, and yada yada, the cycle continues. 

It seems a little bit counterintuitive to me in that example because I'm not able to actually go and contribute to my economy. I'm not actually able to go and generate income and revenue for my business and also, you know, what I give back to the people that visit my business and even just the general economy from where I live let alone, you know, federally, but, I think, that it's interesting that, you know, the incentive seems to be there. That you would want these prosperous people and these already ready to work people to just go into what they know how to do and be really awesome at it, but then there's that barrier to entry.  

Hermann: Correct. And that's exactly what it is. So in economics, that's precisely what we refer to as barriers to entry. So these are things that whereas you could otherwise be able just to get to work and be able to start making money...  

Elizabeth: And do it amazingly well.  

Hermann: And start of it, and even if you can't do it amazingly well, yeah. The thing is you want to have... people have the chance to build those skills so that's why it's called a barrier to entry because even though you don't have the best skills and the most experience and all that we're now gonna make it that much more difficult, okay? So like I said, let's be fair to both sides and let's, kind of, see it from both angles. 

Elizabeth: So that's the example of someone who's already educated, already has all of the know-how they would need to be successful as a nail tech, for example. And obviously, this isn't just sequester to nail technicians, this applies to almost any trade or any industry but we're talking about nail techs for now. So that's the first scenario where that person is almost in a way being punished because they're already ready to go but they have that barrier to entry because of the licensing which seems harmful in a way.  

Hermann: Yes.  

Elizabeth: Okay.   

Hermann: So now let's take a look at kind of the other end of the spectrum. Say, well, someone who just graduated high school, they're not looking to go to college and they wanna get into trade. So in this case, we're dealing with nails, right?  

Elizabeth: Right.  

Hermann: Okay, so again, they might have never even tried to do nails in their life before, so they're gonna be starting from scratch. So you would have a good and sound argument against, well, this person couldn't just go out and start telling people, "Hey, I do nails," and pretending just buying any, you know, stuff, any equipment or whatever and they just have no idea.  

Elizabeth: They have no idea of what they are doing.   

Hermann: They have no idea what they are doing. So then here is where people come in and say, "Well, what we want to avoid as much as possible is someone like that, you know, hurting someone else," or whatever, you know. All right. Well, the reason why that is rarely the case is because very few people would even have the gall to try to do something like that, something that's highly technical because you wouldn't even know where to start, right? So that's very, very unlikely that that would happen but it's possible, okay? So it's possible and people are justified and being concerned about that, right? So the people that are...  

Elizabeth: Right, so we don't want them because they're hurting people. And we don't want them also tarnishing the reputation of what it is to be a professional nail tech. I think that's the way a lot of people feel.  

Hermann: Yes, absolutely. So I think that's also a valid concern that a lot of people that tend to err on the side of regulation. And at this point, we're not even dealing with over-regulation. We'll get to that. We're just talking about just regular regulation having one barrier to entry and we'll only just call that licensing. But as we'll go on, we'll see that it's not just that. It's basically things that pile up and up and up behind that or in front of that it ends up being many different types of barriers.  

So even if you just have that one barrier to entry, you say, "Well, isn't it valuable to have some sort of filter to filter out certain people or certain types of people that we know aren't going to end up doing the right thing? So they're not gonna end up doing good business. They might be, you know, greedy. They might only be doing it for the money. They might not be, you know, caring about their customers, or about the level of quality, or about the price, or whatever. There's a million different things that we can criticize someone over their business dealings, and their intentions.  

So, yes, absolutely, you do wanna have different levels of filters to filter those out so that you only have the cream rising to the top. The problem that I see and that I've seen in, again, studying this stuff and it's funny because it's not until we started getting into this industry that I started seeing how all of these things that I've studied in other industries.   And for people that don't know, I mean, both you and I having been in the corporate world, in my case, almost two decades in a very, very highly regulated industry and seeing the impact that that has and how it actually causes the opposite, which is it actually causes companies and businesses to actually try to go around all that stuff and they actually end up causing more harm trying to do that and trying to, you know, jump through all these hoops and hurdles, and trying to do this and that. That then otherwise, if they had just been, you know, allowed to do something and let the market, kind of, regulate them.   Here's another distinction that I wanna make, there's a lot of people that are anti-regulation and they'll say something like, to the effect of, "Well, if people," sorry, "If there wasn't regulation, the government didn't regulate companies," let's say, "The companies would just regulate themselves," that's also inaccurate. That's also a naive version of the other argument which is companies won't necessarily regulate themselves. It's the market that regulates them...  

Elizabeth: Well, and I would say that's... 

Hermann: ...even if there was no government, you know, central authority regulating them. So I'm just gonna give you a quick, kind of, mental exercise that, I think, everybody will understand, just to grab the concept of what I'm saying and this is just, kind of, in a vacuum to start thinking of how this stuff doesn't really real life, it doesn't actually turn up the way that the regulators would want you to think, okay?  

Elizabeth: Okay.  

Hermann: So, let's start from the from the beginning already with the assumption that I am a greedy, you know...  

Elizabeth: No good.  

Hermann: ...unscrupulous person, and the only thing I wanna do is make as much money as I can. I don't care who I hurt. I don't care about anybody else. I just want to make as much money as I can and, you know, everybody else be damned. Okay?  

So I come up with a service that's great. It just so happens I'm also really intelligent and I can actually come up with cool things that people want, you know, a gadget, or a service, or whatever. And I come up with this thing, let's say "Okay, so I'm gonna become a multi-billionaire by doing this thing." Again, we're in a vacuum, there's no, you know, government regulation vacuum. There's nothing out there in the books that is gonna keep me from everything.  

Elizabeth: Right, like you can commit harakiri, if you want to, with this new idea, basically. 

Hermann: Well, not really. No, no, no.   

Elizabeth: That's what people are thinking, if there's no regulation.   

Hermann: Well, yes. But here's what's gonna happen. Again, I'm already the worst of the worst. So I come up and I have this little widget. This thing's awesome in everything.

Elizabeth: A fidget spinner.   

Hermann: Yeah, the next fidget spinner, right, or actually something that's actually valuable even, right?  

Elizabeth: A fidget spinner that cuts hair.  

Hermann: Nice. That would be cool. Wouldn't that be like the Flowbee, the equivalent of a Flowbee?  

Elizabeth: Well, kind of, so cooler.  

Hermann: So then I come up with this thing and I'm gonna put out to market and I know that everybody, you know, is it's gonna be interested in this thing. So, again, since I'm only interested in being rich, making money, and I don't care if anybody gets hurt with using this thing or whatever, then I'm going to allow people to make this thing for me, right? I can't make them myself.  

Elizabeth: Especially millions of them.  

Hermann: I'm gonna need to make millions of them, okay? But I'm not worried about employees. I don't care about employees. I don't care about how happy they are. I don't care about working conditions. So I am going to tell people that I need them to make this widget for me for zero dollars an hour.  

Elizabeth: Okay, a lead-filled fidget spinner for zero dollars an hour.  

Hermann: Yes. In a tinderbox with no sprinklers...  

Elizabeth: And no air conditioning.  

Hermann: Okay, and no air conditioning.  

Elizabeth: Right, worst working conditions ever.  

Hermann: For zero dollars an hour, okay? Who's gonna take that job?  

Elizabeth: Nobody.  

Hermann: No one, right? So, again, no regulation, no anything. It's just the market itself, meaning the labor market, the people. I say, "Hey, now hiring for fidgets spinner haircutting thing, a revolutionary technology, please, inquire within."  

Elizabeth: Well, and it's important also to mention, on this example, we're not talking about a world where, you know, were able to enslave people to work for us or anything.

Hermann: Correct, yes. Yeah.  

Elizabeth: We're talking about normal operating procedure like, U.S. business, you come up with it...  

Hermann: But just absent the regulatory state, that's all we're saying.  

Elizabeth: Right, we're talking about real life, you know, nice place to live, type of situation, and you couldn't even add...  

Hermann: And we're gonna get to this later which is you still have a robust legal system, right?  

Elizabeth: Absolutely. 

Hermann: So you still have the court system where people have...  

Elizabeth: Where there's morals and ethics and things like that.  

Hermann: Well, no, no, no.  

Elizabeth: Not even.  

Hermann: Even if you don't, that's what I'm saying. That's why...  

Elizabeth: No, in the community, I mean, or it doesn't matter?  

Hermann: It's all about incentives. Forget ethics and morals, it's about human incentives, okay?   

Elizabeth: So, if you try to hire me at your lead-filled fidgets spinner factory because you wanna be a gazillionaire off of this idea...   

Hermann: For zero dollars an hour because I don't care about you.  

Elizabeth: And you tell me, "You're gonna work in a sweatshop... well, you know, whatever. Not really a sweatshop but you're gonna work in horrible conditions and I'm gonna pay you nothing. You wanna work for me?" I would say, "No. I don't wanna work for you. I'd rather go work somewhere else," right?  

Hermann: Correct, right. So then, right there already, right?  

Elizabeth: Is the filter.  

Hermann: Is the filter, that's one end. Okay, and let's pretend that I actually do get 100 people wanting to work for me in those conditions which we already have agreed, and no one would, in my right mind, obviously.  

Elizabeth: Maybe I wanna the fidget spinner to...  

Hermann: Unless they actually, like you mentioned before, unless they were actually physically correct coerced to do so, which the equivalent of like slavery or something. Again, we're assuming current state.  

Elizabeth: Normal, yeah.  

Hermann: Yes. Okay, but I do get my 100 people to make these fidget spinners in my, you know, sweatshop. All right, well, again, now I also don't care about my customer and so on money so I'm gonna...  

Elizabeth: Right, you just wanna make money.  

Hermann: I just wanna make money. So I'm going charge $1 million per widget because I just wanna get rich quick and I don't care about anything else, right?  

Elizabeth: Right.   Hermann: Okay, who's gonna buy my fidget spinner for $1 million. 

Elizabeth: Nobody.  

Hermann: No one. So, again...  

Elizabeth: Especially if it's made with, you know, bad stuff in it, right? Like, maybe, like, lead was super cheap or whatever it might be or, you know...  

Hermann: Radioactive cobalt.  

Elizabeth: Radioactive plastic or something, right? And you're like, "Oh, I got it so cheap. I'm able to make them for nothing. I have to pay my employees nothing. I can sell them for $1 million and make 100% profit on this thing."  

Hermann: Right. So now just in this little mental experiment you've seen how, again, it wasn't the company regulating itself. We're already starting from the assumption that this company or this person, that leads this business, is already the worst of the worst. And just in this example, you would see how, even without that regulation, this guy would have to come up and offer the necessary working conditions that people need plus the salary that they're willing to work for, even though he doesn't want to, in order to get these fidget spinners made, okay? And now, again, he still doesn't care about his customer and he just wants to be rich. He's a greedy bastard, okay? So he can't get anybody...  

Elizabeth: To buy one.  

Hermann: buy this thing for $1 million from now...  

Elizabeth: And even if they did, just to take it one step further, because this is also part of it. Even if he was able to successfully sell these things, right? As soon as customers start to even figure out that these things are either dangerous, poorly made, or even a lot of people are interested in how things are made and what they're made with, right? So as soon as people found out he pays his people nothing, you know, or whatever, the consumer also, even if he did actually sell them, could say, "I don't wanna support your business," right? You get boycotted. And even if you did sell 1, or 2, or 10, pretty soon you're off the radar because no one is gonna support you.  

Hermann: No, you'll go out of business. You'll go out of business. Okay, so now we see how just in and of itself, the market every day, and anybody listening to this out has run a business ever knows how this works. You know, back when in the days when we used to manage a salon, everything that you and I did, in that business, we never ever even took the regulations into consideration because our standards were higher than that, right? So, to us, the state guidelines regulations were never even an issue because our standards were well over that. So we were, you know, training in-house our techs to be the best that they could be when it came to hygiene, and health, and all that stuff.  

Elizabeth: We chose to get an autoclave even though that wasn't required.  

Hermann: We didn't have to get an autoclave even though we spent, you know, what $3,500 buying a machine that would do well over what the minimum requirement and we did a lot of stuff, okay? And, again, people would say, "Well, not everybody's like you. We're not worried about you," but then our response to that is, "Then why do you treat me the same..."  

Elizabeth: As someone who needs...  

Hermann: the person who you do need to regulate because they're unscrupulous and unethical and blah blah?" Now, here's the thing, if those people are unscrupulous, and unethical, and immoral, and terrible people, is a little regulation gonna stop them from doing what they wanna do? Of course not. They're just gonna do it under the table or they're still just gonna flout the law and just keep doing what they're doing or whatever. So, again, there's no consistency here, it just doesn't make sense. So that's just, kind of, in a practical matter.  

To me, personally, the reason why I...and also as a business owner obviously I have these convictions because I've seen how they actually don't work but there's another side to this that I've realized and it is, when you're putting so many barriers to entry, okay, under the guise of helping people and protecting people that you're actually making it so that you are limiting the opportunities for the people that need help the most.  

So when I think of barriers to entry, I can't help but think about people that have low means, that come from poor backgrounds, that could be able to get out of that by just having the opportunity to go straight to work and build wealth, and build skills, and experience, and those are the people that get hurt the most when you have, not just, you know, regulation, much less if you have over-regulation because those kids... Here's the way I see it, and it's only because we what we have experienced, right? How many people have come through our doors even from the days of the salon where we saw so many people coming through and we were just amazed at how much debt they were in.  

Elizabeth: Oh, yeah. We were talking about it this morning, about how, for example... I mean, some of the girls that used to work with us and, I mean, to me, this is actually the story that's the most common across all nail technicians. Most nail techs don't grow up, you know, with a silver spoon in their mouth. They come from working-class families and a lot of them choose to become nail technicians because they don't wanna be something like a hotel maid or they don't wanna, you know, do something else that's out there.   Hermann: Well, whatever it is, that's what appeals to them the most.  

Elizabeth: Yeah, well, it's whatever appeals to them but here's what I'm getting to, just for a second, is that they don't have, you know, all of these means, you know, to... like, for example, they don't have a ton of cash in the bank where they can just invest in this and invest in that and be above the status quo and, you know, kind of, "Oh, yeah. I can pay for that license. I can get this thing. I can do whatever I want," right? And, kind of, be above that line, they're just below the line or at the line.  

And here's where I find it very frustrating as that someone who has this passion that they wanna go and they want to start their own business, they want to actually rise above what they were given when they first started out. They, you know, wanna get into the nail industry. They wanna be nail techs either working for someone or they wanna open up their own place, the first thing that they have to do is not actually learn how to do nails in the sense of actually getting the skill set from someone, right? Like the example of little Liz working at her mom's, you know, situation is, kind of, like, an apprenticeship thing.  

It's really the first thing they have to do is spend upwards of... you know, in most states now, the nail programs are at $6,000 to $9,000 for 400 to 600 hours of training, right? So you're talking about straight out of the gate anyone who is, like you said, you know, comes from more working-class environment and wants to, you know, break out and do something awesome for themselves, right out of the gate it's $9,000 for... you've got to come up with it. And then, of course, we have situations in place with, you know, financial aid and things like that and we saw what happened with Marinello with the whole financial aid situation and all of that.  

But, you know, these girls end up in debt straight from day one. They're not actually able to come into it slowly, learn as they go, be under someone's wing or have some type of environment where we can foster that growth, it's nine grand. Straight...  

Hermann: By the time they start their first job, they're already underwater.  

Elizabeth: Absolutely.  

Hermann: And that is not the way it should be. So what we are actually clamoring for and we have been for a long time is that by the time that you're already working and you have just a regular job, you should have enough hours having done it that you could be basically in the black making money from day one.  

Elizabeth: Yeah. There's no reason that... I mean, yeah, you may not be making money from the first day as a student or... you know, let's say, it's a student in a private school or an apprentice situation or whatever it is, I mean, you may not be making money off of yourself and, obviously, it takes a long time to learn how to do nails properly and to really become good at it, but at least you're not starting out 10 grand in the red, right? Because we're not even talking about, you know, just school, you've got to buy all the equipment, all of the products, all of the stuff. And so these girls either end up with school loans, which, you know, they seem cheap in the beginning but it's ridiculous.  

I mean, you're paying loans back for 30 years and it's just ridiculous when you consider the amount of education you're getting for it. And number two is, then you got to put all your products on a credit card or get your family to chip in for it, and then from day one you're struggling to even provide the most basic service and make money off of that, right? But, I feel, like, we're getting a little bit deep in the conversation. So one thing I wanted to go back real quick, is, I feel, like we're, kind of, you and I move very quickly through this because we've talked about it a lot.  

But I wanted to go back just to what we're talking about the kind of barrier to entry thing and just I wanted you to clarify a little bit more and maybe summarize a little bit. So the first situation we talked about is licensing really in and of itself prevents highly qualified people that already know what they're doing from actually being able to just go and do it successfully, right? Because they have to go through that just... maybe you can... if I said that you can clarify.  

Hermann: So we have both ends of the spectrum: highly skilled and highly experienced, okay? Like I said, like in a situation like what we said little Liz growing up in the household with, you know, people who have been doing this forever and she's been doing it since she was also a little kid. So come, you know, 15, 16 years old, definitely by the time she graduated high school, from day one, she can start making money, right?  

Elizabeth: Right. But also, it could be... would you also say that... I mean, because that is a scenario that happens quite a bit here in the nail industry is that people grow up inside of nail-invested families but I've also seen it with people that come from other countries like really experienced nail technicians from other places that move to the United States.  

Hermann: Or even just moving to a different state like Houston.  

Elizabeth: Or moving to a different state...  

Hermann: Like what happened to you.  

Elizabeth: And now you got to figure out like, "Oh my God, I got to start over."  

Hermann: And now you still have to ask for permission.  

Elizabeth: Yeah, okay. So that's scenario one.  

Hermann: Okay, so you see the injustice in that already, right? Because it's someone that...  

Elizabeth: Yeah, because you're being treated like someone who's gonna hurt someone and you already know what you're doing.  

Hermann: And then, on the lower end of the spectrum, the low scale low experience level, we gave that example of how there is no incentive for someone to try to do that because they have no skill. They would be basically found out in a second, right?  

Elizabeth: I think, that's true.  

Hermann: After their first client who looks at their nails and sees, you know, what a crappy job they did or they ended up, you know, whatever, that person's gonna go nowhere. She's gonna go nowhere fast. So the...  

Elizabeth: Well, and also within our own community, too, because, I mean, we see, you know, the pictures posted of, "Hey, this person did my nails for $12." Or, you know, someone will join a nail group, for example, on Facebook, just as an example, and they're like, "Yeah, you know, I do nails that from my house, and blah blah blah, and I learned on YouTube," you know, typical example, "I only charge $12 for a full set of nails." And as soon as they post pictures of their work, all of their colleagues in the industry licensed and, you know, unlicensed are like, go, "You're joking, right?"  

So, like, I think it's also... they get those checks and balances with that, not only from working with consumers and, you know, they have no incentive to really hurt someone because their business is gonna fail, but even if they're at their house doing nails on people and doing a shoddy job, they're gonna get found out one way or another. It's just a matter of time.  

Hermann: Yeah. The people are just not gonna come back and their business is done.  

Elizabeth: And if they do come back, just, I mean, to play devil's advocate, here's, kind of, where nail techs go with this, is, "Yeah, but what about the people that don't know any better? Like, what about, I come to you, you're a crappy nail tech, you have no idea what you're doing. You don't clean your tools. You don't know how to use your products. You give infections to everyone you touch, and you give overexposure to everyone you touch, and me, as an unknowing client come to you and I have no idea that the way you do nails is bad, right?" So that's, kind of, where a lot of nail techs come from the perspective of, "The license is the way to protect those people." Because then, if the client knows that nail tech has a license then they don't have to know anything about nails to know that they're getting a good job done, right?  

Hermann: Okay. That is a perfectly reasonable argument and observation about something that does happen in real life, okay? But, okay? There's a big but here, that has no bearing on this, whatsoever, because of a very simple concept in economics that everybody needs to understand and it doesn't matter how you feel personally about it or someone else, it's how the two people engaged in the interaction, that business interaction, feel about it. That's all that matters.  

So the most basic concept in economics is, I'm holding a pen right here, right? And so, if I'm gonna sell you this pen for $1, okay, empirically what that means is that you value this pen more than the dollar that's in your pocket and I value... You value this pen more than the $1 that you're gonna give me and I value your dollar more than a dollar dollar, right? From this pen, that's why this interaction is gonna happen.  

Elizabeth: Right, that's why someone's willing to exchange a pen for a dollar.  

Hermann: Exactly.  

Elizabeth: The two parties agree.  

Hermann: Otherwise, if we both held the exact... and with the same regard, you held your dollar as my pen, the interaction wouldn't take place because then it's not even worth the time for exchanging it. You have to value this pen more than your dollar, and I have to value your dollar more than this pen.  

Elizabeth: In order for the transaction.  

Hermann: In order for us to come together and do a business transaction.  

Elizabeth: That's an interesting point because there's... Wait, wait, wait. I wanna clarify that because I wanna use an analogy that, I think, would relate a little bit to the nail industry, which is... like, I just did the podcast on cornstarch nails, right? We're talking about how unprofessional it is to use cornstarch as a dip system. But that's an interesting concept because if, me as the client, right? I'm only willing to pay $10 to get my nails done, right? And I'm okay with you using, you whip out cornstarch and nail glue and I look at it and I'm, like, okay with it because I'm paying only $10 for cornstarch.  

Hermann: Your priority is priced in that case, and so you're getting...  

Elizabeth: What I'm paying for.  

Hermann: ...more than your $10...more, actually. More, right? Otherwise, you wouldn't do it.  

Elizabeth: Yeah, because cornstarch I value the corn start to dip nails more than the 10 bucks in my pocket.  

Hermann: More than $10, right.  

Elizabeth: And you as the nail tech, you want my 10 bucks, right? More than what it costs you to do the service..  

Hermann: Your time and your...  

Elizabeth: ... and the cornstarch or whatever it is, right?  

Hermann: Yes, correct.  

Elizabeth: So even in that crazy example where any professional nail tech...  

Hermann: Would stop.  

Elizabeth: Any educated nail tech would go, "Oh my God, how could we allow that to happen? How could we allow a nail tech or even an... you know, whatever you wanna call them, a DIYer, how could you allow that person to give someone cornstarch nails? And how could we allow the consumer to allow that to happen, right?" We come in and were like, "Whoa whoa whoa whoa." Well, we wanna control this because the nail tech obviously doesn't know the implications of doing that and the consumer obviously doesn't understand what they're getting, right? And so we're, like, freaked out.  

But in your situation, the example you just brought up, they're the true economic principle of that is, if in that simple transaction of one person getting cornstarch nails and the other person providing the service...  

Hermann: Both parties benefit.  

Elizabeth: Both parties benefit and both parties agree at that moment. Now, if the client ends up getting a Pseudomonal infection or, you know, their nails all fall off, that's gonna change the dynamic because now the customers gonna go, "Wait, a minute I'm not happy with this transaction anymore. I'm not happy with the level of service I'm getting for the money I'm paying." And then that customer just goes away and the nail tech no longer has that client that's giving them the $10 for the cornstarch nails. So if that happens again and again and again and the nail tech doesn't wise up, they have no more $10 for cornstarch nails, right?  

Hermann: But notice what you said when you were, you know, criticizing the situation with the cornstarch nails, "How can we allow?" Okay?  

Elizabeth: Right, and that's the common statement.  

Hermann: That's very, very troubling because it's one thing to say, "Who would ever want...what customer...  

Elizabeth: Would ever want cornstarch nails?  

Hermann: "...would ever want cornstarch nails?" Now, that's a valid criticism, especially someone of your level of skill and ability, you know, and all that stuff who would be like, "Who in their right mind would want that?" So let's say that you were to grab that customer, you pulled out the customer and like, "Let me see your nails." I mean, you look at them and you're just, you know, you want to come unglued from looking at the level of quality of these nails and what they're made of and the whole bit.  

And you say, "You know what? I'm going to educate you. Check out my nails, okay? Check out, you know, the way that I, Liz Morris, does nails," and you just do your best, right? And they're like, "Oh my God, I didn't know this was possible. This is amazing. These are works of art, and blah blah, how much do I owe you? "A hundred and fifty bucks." "No, thanks. Take them off of me. I can't afford that," right? So, ultimately what matters is the interaction between the service provider and the client, okay?  

Elizabeth: And that's interesting because a lot of nail techs, they... I think, this is the biggest thing that's hard to comprehend, right? And I wanna go back to kind of where we talking about which is pretty much I think most nail techs assume that every client would value nails more if only they understood how much work and energy and stuff that goes into. And I'll quote something that I hear all the time, which is, "Charge what you're worth," right? Because nail techs feel very proud about their skills and everything. So a highly skilled nail tech would look at this situation and, again, number one would come out of their mouth, would go, "How could we allow this to happen?" Right?  

Which is funny because you're basically imposing your own principles on a transaction that has nothing to do with you. And number two, just like you said, they assume that if only the client understood the options that exist and saw that, you know, "Oh my God, I could get Swarovski nails with you know gel with this," and then the nail tech goes, "Yeah, yeah, yeah and this is worth $150, not $10." Most nail techs assume that the client would be willing to pay $150 for better nails.  

Hermann: And some might...  

Elizabeth: And some might...   Hermann: ...but not all.  

Elizabeth: ...but you have to remember that the client looking for $10 nails is looking for $10 nails for a reason.  

Hermann: Exactly. Yes. Absolutely.  

Elizabeth: It's not about, "How could we allow this to happen?" And it's not that the nail tech literally enslaved the client and chained them to a chair and put cornstarch nails on them, the client saw an ad somewhere. Let's say, you know, like, I see a lot of...I don't know what you would call them, non-standard nail techs, I guess, is a nice way to put it, posting listings on Craigslist, for example. You know, "$10 full set," on Craigslist. Well, a consumer looking for that listing, who goes, "Hey, I'm gonna give this nail tech a call because she does $10 full sets in her garage. That sounds like a great deal to me."  

Right at that moment that they make that purchase decision or the decision to call and make an appointment, they've already decided that they're okay with that, right? And obviously, that okayness evolves throughout the whole appointment and even after the appointment for the duration of their nails and whatever it is. But it's interesting to me, I really like what you just said because, to me, it's almost outside of the way that we operate because we're so... I don't know if it's... it's not that we're sure of ourselves, it's that we really value... Nail techs, ourselves, we value quality. We value beautiful enhancements and we wanna get better and we wanna provide the most premium level services, but at the end of the day, we have to remember that not every client wants premium level services.  

Hermann: Right. And here's the ironic part, so everything that you just said is absolutely true. Here's what's ironic, it's because all of the high-level text salons, etc., do have to price in all of those difficult... because, remember everything's aboveboard, right? They're doing everything by the book. So they're paying their licenses, their taxes, their fees...  

Elizabeth: Insurance.  

Hermann: Insurance, if there's a minimum wage. If there's this in that and blah blah blah. So now their baseline level service is at, say, $50.  

Elizabeth: Yeah, that's probably average. Yeah.  

Hermann: So let's say, it's 50 bucks. Well, because of all of those barriers to entry that they have to keep... you know, have to take the box and account for...  

Elizabeth: All those expenses.  

Hermann: ...all those expenses, all that kind of stuff so now you have $50 and then you have the cornstarch nails at $10, right? Under the current, you know, circumstances, like you said, if you educate the customer, you might drive a lot of ladies away from the cornstarch nails and get them to, maybe, upgrade up to the $50 version, just the ones that you can convince that there's enough value there for them to get that instead. But it's not gonna be all because many of them are still gonna be like, "Yeah, but all I have is 10 bucks," right? If you were to do away with all of those barriers to entry and all of those hoops and hurdles that those high-end salons have to jump through, you might be able to get that service down to $20, right?  

Elizabeth: And still be making a penny on it.  

Hermann: And be able to make a profit doing that. So then the difference now, the delta between the 10 and the 20 is now only 10 bucks. How much easier would it be to convince someone, after the exact same level of education, about nails, and hygiene, and all that stuff for them to say, "Yeah, you know what? For another 10 bucks...  

Elizabeth: I can get awesome nails.  

Hermann: ...I can get awesome nails, I can be guaranteed of quality of safety, get some good quality customer service.  

Elizabeth: With sterile tools and a clean environment and all of that.  

Hermann: All the fixings, right? For just $10 more, right?  

Elizabeth: Yeah. Not $100 more.  

Hermann: Exactly. And so that's what we hope happens. And before I get any further, the reason why we also are assuming, under these examples in this conversation, that we do have an actual working and robust legal system, okay? In which you have a port system and all that kind of stuff is because, when that exists, so we're not talking about you are in Somalia or something where there's no government. There's nothing, and there's no legal system to speak of, and all that kind of stuff, right? Is that even without the regulation, it's still illegal to stiff people, right? To defraud or to hurt people.  

Elizabeth: Yeah. Actually, this is where I wanted to go into next. So I recently, just to preface this, I recently posted on my Facebook page, right? And I said that, to me, and we've talked about the two examples. We've talked about how the licensing thing, the way that it exists now, and we didn't even talk about the school aspect yet and how that, kind of, interrelates. But basically, to sum that up, and I think a lot of nail techs kind of understand this general concept is, basically because of the system that we have now with the licensing, right? They not only control who becomes a nail tech, but they also control who can actually offer the education to those students.  

Hermann: So that's other level of barrier to entry.  

Elizabeth: Right. So, the quality is kind of... not only is the bad people are being, you know, supposedly barred from being able to do these bad things, but we're also barring the highly skilled nail technicians from operating on their own, creating their own salons, or working in their mom's salon, or whatever it is, but we're also barring awesome educators from being able to become educators, right? So for example, real quick, I wanted to touch on, you know, the school thing because, I think, this really kind of goes into what we're talking about.   

So as an example, I wanna bring up California because we operated in California for a while, and I'm a licensed nail technician in California, and I still am. I keep it up and all that stuff. But I remember when we went through this, especially because we had these employees that we were hiring in our salon that we were like, "Oh, my gosh," you know, the apprenticeship thing is really, really difficult to do in California even though it does exist. Many people don't even know apprenticeship is an option because nobody advertises it, obviously.  

But it was really difficult to get highly skilled girls that we felt that, you know, they could even just do a manicure coming out of school, right? So you and I had this discussion of, why don't we open up our own nail school? Why don't we actually educate people and provide that awesome education because I was a gel educator and I was getting really involved in the industry.  

And so it wasn't just from a state perspective, "Let's become a school," it was knowing the industry and knowing what's needed, in order to be successful in the industry, we really wanted to provide that education to up-and-coming nail techs, right? And especially, you know, be able to offer it at a reasonable and not have them in debt up to their eyeballs and all of that stuff because you really don't need to charge nine grand per person. Okay, so you and I investigated opening up our own school and what did we find out? I mean, it was...  

Hermann: It was, I mean, close to impossible.  

Elizabeth: It was close impossible. Number one, if I recall it correctly, and maybe the rules have been updated since then but I'd highly doubt it. Number one, you had to have 3,000 square feet of dedicated space for a school already lined up.  

Hermann: And it had to be for all types of salon.  

Elizabeth: Had to be all cosmetology. So that means hair, aesthetics, nails...  

Hermann: Makeup.  

Elizabeth: ...all of that stuff, right? Which is crazy because I'm not a cosmo, I'm a nail tech. And, I think, it's important to have specialized education for a nail tech.  

Hermann: And your nail tech already had up to...what was it? Twenty-two people pre-enrolled?  

Elizabeth: I think it was 20 or 25 pre-enrolled... a list of 20 to 25 people that were basically pre-enrolled in your imaginary school that didn't even exist yet.  

Hermann: It's impossible.  

Elizabeth: It's impossible.  

Hermann: "Hey, come sign up to my school that doesn't exist."  

Elizabeth: Imaginary school.  

Hermann: How are you gonna get that?  

Elizabeth: Yeah, the imaginary nail school. So those were, like, the main barriers to entry for us, right?  

Hermann: And that's not including the cost and everything else.  

Elizabeth: Oh, yeah, yeah. We're not talking about the cost. We're just talking about actually having those check mark checkboxes which is the 3,000 square-feet, the 20 to 25 people that are pre-signed up to your imaginary school that doesn't exist and having to offer full cosmetology rather than just being able to say, "I only wanna specialize in nails. I wanna teach people just about nails," right? So even if they wanted to only do the 400-hour or 600-hour...I think, it's 600 hours in California, nail program, you couldn't just do that. You could have nail students enrolled but you couldn't just provide just that part of the manicuring program. And then on top of that...  

Hermann: No, you could but you still have to be able to do it.  

Elizabeth: Have to offer a cosmetology.  

Hermann: So even if you said, "Well, I'm not gonna have it, but I'm gonna have all the equipment and all the space..." 

Elizabeth: I'm gonna have mannequin heads, you know, staying around and collecting dust because I'm not gonna use them.  

Hermann: Yeah, exactly. Yeah, which is absurd.  

Elizabeth: And then, even if you had all of those things, you still have to pay the fees apply. You're never gonna get approved for it because I've never seen a new school in California get opened by someone like that.  

Hermann: And that's why you don't see them. That's why we call it protectionism because the system protects... and the schools themselves protect themselves from competition. And that's why...  

Elizabeth: And that's why they are able to get away with $9,000, $10,000.  

Hermann: ...they can charge what they charge. Correct.  

Elizabeth: I mean, cosmetology, I think, is now 24 grand, 24,000. I mean...  

Hermann: It's absurd.  

Elizabeth: That's more than a state education at a university, I mean, in some places. It's just absolutely astronomical. So I want you guys to understand that we're not talking about the fact that, you know, the barriers to entry only affect nail techs. I mean, it's also affecting the whole education. And so this is, kind of, where I want it to go with this because, in my mind, it's not just the state licensing that is a problem, it's the relationship between also the state licensing and the regulatory system that we have with the schools that are certified to provide the education that is necessary.  

Okay, so let's say that the licensing worked, as an example. Let's, just for all purposes, say that licensing worked as it's supposed to, it protected people. Well, the schools that provide that certification to even apply to get a license really aren't incentivized to do anything more then get you to pay the fees and also pass your state board exam.  

Hermann: And so all they need to do, practically speaking, is teach to the test and that's it. 

Elizabeth: Right, and some schools even just give the answers. I mean, there's a lot of schools that literally teach the test.  

Hermann: Yeah, because there's no incentive not to. There's no incentive for quality because they are protected. Again, that's when we talk about protection.  

Elizabeth: Because there's nowhere else the students can go, there's no other schools that are coming online, so they have no competition, really.  

Hermann: They have a captive audience that has no choice. So then the school can then charge as much as they want and the quality of the education could be as crappy as they want so that they can maximize their profit, right?  

Elizabeth: Right.   Hermann: And nobody's ever going to just... like you said, just start up a new... Like, for instance, if we could what you do under continuing education and the level of the quality of your courses and everything that you do is, you know, head and shoulders above what any school teaches in terms of nails. And let's say...  

Elizabeth: Right, and there's a ton like me that would be awesome people to teach.  

Hermann: Absolutely. And because we know them and they are our friends and...   Elizabeth: I mean, unbelievable educators.  

Hermann: We know the level of quality that actually exist. But why does that exist? Because none of them are protective. They have to work their butts off constantly. And why do their costs remain relatively stable over the last, you know, however, many years that we've been doing this...?  

Elizabeth: Because we have competition.  

Hermann: Why? Because you have competition, right? You have to be lean and mean. You have to, you know, make sure to make every dollar count. You have to make sure that you'll...  

Elizabeth: You have to wow your students.  

Hermann: You have to you have to wow your students. You have to make sure you get good reviews. A ton of stuff that we are constantly fighting for to become known as a good quality educator in this and on the other thing, whereas the beauty schools don't have to do any of that because they're protected.  

Elizabeth: Yeah, it's a trend style. And it's...  

Hermann: And on top of that, and I'm not gonna speak for every state and every school, whatever, if you start digging a little bit, you will start seeing that there's a lot of cronyism happening between the...  

Elizabeth: What is cronyism?   

Hermann: Basically, people that know each other and they go back a long way. And so what you realize is a lot of these people, the owners of the schools are good friends with the people that are part of the boards, or they might be very cozy with their congressman or their senator or this and that. So that, again...  

Elizabeth: I know that firsthand.  

Hermann: We have seen it first hand in some places, we're not gonna assume that it's the exactly the case everywhere, but the dynamic is still at play, which is once you actually get there, however you get there, right? You get licensed to be a school, you're protected.  

Elizabeth: And also...  

Hermann: Because Liz, as an educator, who observes all of the stuff that's going down in the industry, says, "Tomorrow I'm starting my own school, and I'm gonna fight against this and provide quality, and a good price, and blah blah," you can't.  

Elizabeth: I can't.  

Hermann: You're barred from entry also. So even at someone at your level still has to contend with those.  

Elizabeth: Yes. And this is what I think is funny. There's two things that, I think, are funny. One is if me, Liz Morris, "The Nail Hub" with everything that I do inside the industry. I write for "NAILS Magazine." My podcast is powered by "NAILS Magazine." I'm a certified educator. I have traveled everywhere teaching, ton of people know me and I have, you know, ton of followers on Instagram and all of those awesome celebrity type things but also just the quality of the classes that I provide, you know, being, you know, linked up with Swarovski and Accents, and all of the amazing things that I do, right? With inside of "The Nail Hub."  

If I were to walk into the State Board of Cosmetology and go, "I wanna be an educator for you." They're gonna tell me, "No," which I think is hilarious because they don't look at it from a perspective of, "Here is a high-quality person who actually lives and breathes in the nail industry, who actually can guide these people to be awesome nail techs. They're gonna say no. Why? Because I don't have 3,000 square feet of dedicated space. I'm not gonna have a full cosmetology school and I don't have 20 to 25 pre-enroll people in my imaginary school.  

Hermann: And you don't have a buddy in the bureau.  

Elizabeth: And I don't have a buddy, I don't know congressmen, I don't have, you know, money to, kind of, you know...  

Hermann: Throw around and... yes, absolutely.  

Elizabeth: ...whistle my way into this thing. It's just unbelievable. And the other thing that, I think, is so ironic, that I wanted to... you know, and I've talked about this before on the podcast is the way I got my license, right? I mean, it's hilarious. I mean, you talk about how these regulatory agencies were the only way, we're protecting bad people from entering the industry. And thank God, I'm not a bad person, but even the way I entered, the industry my school didn't teach me jack. I mean, honestly...  

Hermann: You already knew everything.  

Elizabeth: I already knew everything.  

Hermann: You just needed the paper.  

Elizabeth: I just needed the paperwork. And essentially, I was thrown a textbook, Milady textbook, a little crappy kit full of crappy odor-free acrylic and some fake plastic fingers, and was told, "Come back three months later, I'll backdate your start date and then you'll go take your state test," right? So even me, right? If I wasn't a self-starter, if I wasn't someone that was actually wanting to learn how to do things better and all of this, I would have gone through that whole process and become a nail tech...  

Hermann: And you would be certified.  

Elizabeth: And I'd be certified.  

Hermann: And you'd be out there making a mess.  

Elizabeth: And I'd be out there doing nails, making a mess.  

Hermann: So here's the other side of the other aspect of regulation and licensing and stuff. This is, kind of, like, the seedy side of it because all of this works or I should say, doesn't work. It gives people the false sense of security.  

Elizabeth: Absolutely.  

Hermann: Because you show up to salon, "Oh, is she certified? Is she licensed?"  

Elizabeth: You see the paper on the wall.  

Hermann: "Is this salon licensed?" "Oh, yeah." And then you go and you get fungus, right? Or you get really really sloppy nails, like, "What wait a minute, I thought this salon was licensed. I thought this girl was licensed?"  

Elizabeth: Or the salon we just talked about which is HIV. A full-on big salon giving people HIV.  

Hermann: And so that still happens under licensing.  

Elizabeth: Yeah.  

Hermann: So real quick for everybody, again, conceptually, because I want to get those concepts out there and people understand. In just a few minutes ago, you said, "Even if licensing works, people need to understand." Licensing, to a degree, works, in economics the question always is, compared to what, okay? So you always...There's a joke within economists that, you know, an economist comes into his friend economist and says, "Hey," you know, "Hi, how's wife?" And the other economists responds, "Compared to what?" Right? So you always have to... it's not about absolutes, it's about analyzing the results of a policy, right?  

Elizabeth: So we analyze it compare to...  

Hermann: So if you say, right? Well, if licensing works, or let's pretend licensing works. Well, okay, it works. And so far, as it does serve as a filter, right? As we discussed, and it is a certain barrier to entry that people feel comfortable say, well, if you really care enough about this...  

Elizabeth: You're gonna go about it the right way.  

Hermann: You're going to jump through the hoops and the hurdles, and you're gonna pay your fees, and you do whatever. So if we're gonna say this licensing work, then I would be, if I were to analyze it, if put my economist hat, which, I'm not. I mean, not by training or anything, it's just something that I like to dabble in, but I would say, "Yeah, it works." But then, again, the following question is, "Compared to what?"  

Well, if I was going to compare it to other places and if I was going to say, well, what would yield us the best results in terms of allowing more people to rise up, especially people of lower means, and people who already don't have a lot of opportunities, that's what I wanna compare it to. So then when I look at other parts around the world, even other countries that are first world countries developed nations, like, in Europe or even Canada, they don't have licensing.  

Elizabeth: No, they don't.   

Hermann: And so then someone in the United States that's 100% pro licensing and regulation or, you know, hyper-regulation all this kind of stuff, they would have to provide me with the data that shows that people are dropping dead in Canada and Europe and that doesn't exist. So then I'd say, "Okay, yes, your licensing works, again, we agreed. Could it be better without licensing?" And, I think, the empirical data shows that it is because it's just out there. If you were able to say, "Well, you know, in general, in the United States, in American salons, 1 out of every 100,000, you know, people die from getting their nails done, okay? But in unregulated countries, again, we have to assume working robust legal system.  

Elizabeth: Right, we're not talking about middle of Africa or somewhere random, we're talking about normal...   

Hermann: Right, and why is that important? Let me just underscore that, because it's already illegal to hurt people, to poison them, or to defraud them, or to whatever.  

Elizabeth: Infect them, whatever.  

Hermann: So even without a license even without the regulation, if I come to you and you give me a service and you hurt me, I still have the legal system in my side that I go and I make... I adjudicate my claim with the court, and I say, "Hey, I went to this person, and in good faith, and I paid for this service, and I got X," right? And you were just mentioning AIDS.  

Elizabeth: HIV.  

Hermann: HIV, sorry, not AIDS, HIV.  

Elizabeth: Yeah.  

Hermann: Bam, right? So, again, in a system where the regulations and licensing already exist and that still happened, right?  

Elizabeth: And to your point, you were, kind of, touching on how, because there are all these barriers, okay? And especially for people that don't have the means to fight it, or to go around it, or to go above it, or whatever it is...  

Hermann: You're gonna drive them underground.  

Elizabeth: You drive them to work in the shadows.  

Hermann: Yeah, so black market or grey market.  

Elizabeth: Yeah. And that's one of the biggest things that we see in the nail industry, is, you know...  

Hermann: That's where you have non-standard salons.  

Elizabeth: Well, the non-standard... yeah, but I'd like to keep that separate because I feel like that's a whole another ballgame. But even if you were to just talk about an average solo flying person that learned off of YouTube and starts doing nails and can't afford to go to nail school, or looks at how complicated it is and just says, "I don't even wanna do that," right? It doesn't mean they're a bad person. It just means that they look at it and they're like, "No, I'm not willing to go and spend nine grand. You know, I don't have the money and nor am I willing to even try and scrounge it up."  

And so, you have these people who we would consider are working in the shadows, right? And we almost shame them as nail techs like, "Oh my God, if you were a stand-up nail tech, you would join, you know, us as licensed people anyway," right? "If you if you were actually a good person you would jump through the hoops like we did, and you would have a license hanging on your wall." And I have to completely disagree because I know a lot of awesome people that are bloggers or whatever, they're unlicensed nail techs that can do circles around some of the licensed nail techs I know. And so that's one of the biggest things.  

And I like the fact that you brought up about the actual legal recourse because that's a very common misconception that nail technicians have. And actually, this came up on my Facebook post. There was a girl who was posting about this on my Facebook page. When the subject of taking away licensing, for example, was brought up, she took it from the perspective of, "Well then how are people gonna get in trouble?" I mean, not just even economically, like, you know, their businesses are gonna fail and people are gonna turn away from them, but she was very concerned like, you know, "That's why we have laws, you know, and we have licensing we have regulations so that if someone does get ill done by, they have legal recourse."   

And what people need to understand is legal recourse exists whether or not the nail technician has a license hanging on their wall. And I would argue that legal recourse, if you got these people out of the shadows, right? If you lifted off some of these barriers and you got people out of the shadows into the light, that issue of legal recourse would actually be even more transparent and easier to actually do.  

Hermann: It would actually drive them away because then there would have more competition that they wouldn't able to beat.  

Elizabeth: Well, that, but also it makes it easier to, kind of, "go after" someone who's hurt you if they're actually out in the open, right? I mean, we have this with stuff that we work with like, you know, even like vendors, right? If we work with a vendor in the middle of nowhere, China, and they do something bad to us, right? It's much more difficult to actually create legal proceedings to actually go after them than it is a business who's here licensed out in the open, you know, doing that. And not that we would, but I'm just saying, if something goes wrong and if you have these kind of weird under-the-radar type of businesses operating these DIY nail techs, that's actually probably harder to deal with when things go wrong and you don't know about it, right?  

Wouldn't you just want to know about the fact that those nail techs are operating that way and have it all out in the open so that we can address that as it happens instead of forcing people to find those weird ways to work around it, right? Or sharing licenses, or not being licensed at all and, you know, working out of their garage or whatever it might be. Because, I think, what people really... you know, going back to my comment about, you know, how could we let this happen? How could we, you know, I guess, instead know, you clarified it.  

You said, "Instead of saying, 'How could you let this happen?'" It's more... "You know, how could we allow this to happen? Sorry, allow, that's the word I was looking for. "How could we allow this to happen?" instead of saying it that way, why not leave it up to the people who are in the transaction and bring them all to light, bring everyone out into the open, allow people to operate in the open. And then when something actually does go wrong...  

Hermann: That what's the legal system is for.  

Elizabeth: That's what the legal system is for and that's also...  

Hermann: That's why we have a court system...  

Elizabeth: And at least we know about it. So we can say, "Hey, you didn't do this right. You hurt someone. You shouldn't be doing that." And you can take those opportunities to even identify those people because one of the biggest things I see in our industry, and I know we're at an hour already and I don't wanna overwhelm people but we're gonna continue this conversation in our next episode. One of the biggest things I see is that the people that are out in the open are the same 1% of the nail industry. The people that are at the trade shows. The people that go to continuing education. The people that are operating the awesome salons, that are featured in magazines. All of those things that we see, all of those upstanding nail techs, I think, it's like the tip of the iceberg.  

Hermann: Yeah, and it's a self-selecting group.  

Elizabeth: And obviously, it's a self-selecting group but to me, that's the scariest thing of all. Is that when I go to a trade show, like last year, I think, I was at every single possible nail event there was, same faces, same people. And the reason why we don't see the other big chunk of the iceberg that's underneath the water is because those people aren't actually being welcomed into our industry. They're not actually able to openly work as nail techs and they're not actually being shown the light. They're being kept under water, in the shadows because that's the only place that they can operate.  

And to me, that is the biggest illness inside of this industry that if there's one mark I can leave on this industry while I'm in it is I want to make the tip of the iceberg bigger. I wanna have more people above that water, out of the shadows, and allow people to do what they can do. Give people the tools to be able to work in this industry if they want to, to do it amazingly well, and to have some of that important competition between educators, and schools, and nail technicians so that we're constantly driving forward not just sitting here, protected, and not actually advancing. And meanwhile, driving people to do things the wrong way because that's the only way they can get it done.   

Hermann: Well said. And the only way that the industry can be elevated is by increasing the amount of high performers in the industry and that can only happen if we take that ceiling off the top, like you said, bring people above that water line. And, you know, I look forward to continuing the discussion and exploring these topics more with you and with our listeners. And we will be providing...I wanna provide a couple of links for some stuff that people can actually read...  

Elizabeth: The interim, yeah.  

Hermann: And actually, for both sides of the argument because, I think, it's important, like I said, that people can click on and see what, you know, some people are saying on both sides.  

Elizabeth: So, we'll add those links on "The Nail Hub" because, obviously, I upload "The Nail Hub" Podcast on iTunes and Google and YouTube, but I will put those links on the, under our podcast section. So if you go to our website, go to the Menu, click on Podcast. You'll see all of the episodes there, but I'll also create a separate section right below those episodes so you, guys, can actually see some more detail as to what we've talked about today, see some concrete examples, and also have some resources that Hermann's gonna provide so you guys can actually investigate a little bit on your own in the interim.  

But to prep you, guys, for the next episode, Hermann and I are gonna be talking about how these, kind of, prejudices, I guess, about deregulation or kind of why this kind of fear builds in the first place and where that, kind of, comes from. And also, we wanted to talk about how you can actually... because, I mean, Hermann and I, we love to tell you as much information as possible. I love to share everything, but I also want you, guys, to understand that we are just two people with our own thoughts and our own minds, and obviously we would love to encourage you to it to learn things on your own.  

And I want you guys to actually learn about this on your own as well, and get some other points of view, and be able to investigate these topics on your own because I don't want you taking just our word for it, and I also don't want you taking just anyone else's word for whatever they say. I always want you, guys, to get fair and balanced information and to be able to bounce ideas off of several different resources.  

So Hermann and I are gonna be talking about ways that you can actually keep yourself educated about topics like this, and how you can become more well-versed in these things so that you're less likely to "get sucked" into one perspective or another without really understanding what's at hand because that, to me, creating educated minds that can make their own decisions is, to me, one of the biggest things that we can do. Whether or not you agree with us at the end of the day, I want you guys to make a decision based on the fact that you truly and fully understand both sides of the story and you can make an educated decision about what you truly believe in not just getting sucked in by someone on their soapbox or fear-mongering. So...  

Hermann: Well said.   

Elizabeth: My two cents. So we'll be in touch next week with another episode continuing this discussion. As always, if you guys have any questions or concerns, please, hit me up via email at Or you can also hit me up on social media @thenailhub. Or, as always, I really enjoy seeing your guys's commentary on YouTube. This is a very, very heated topic. I would love to see what you guys have to say about this. Please comment below this podcast on YouTube once it posts and we'll be in touch continuing this next time, right? Thanks, guys.  

Hermann: Bye.   

Elizabeth: This is Elizabeth Morris signing off from "The Nail Hub." This podcast is sponsored by "NAILS Magazine," the professional nail industry's leading publication. Have a suggestion, question or concern? Send me an email at, and don't forget to follow me on Instagram, Facebook, and Twitter @thenailhub and check out "The Nail Hub" YouTube channel for more episodes and tutorials. Want customized business consulting, access to classes, amazing products, and more? Visit and check out all the wonderful things we provide. Our goal is to help you reach your ultimate potential. Thanks for listening, and I'll catch you in the next episode.

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