Bottleneckers. William Mellor
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and effects of alcohol distributors, it is an appellation that aptly describes many interest groups that enlist the power of the government to establish an economic advantage through occupational licensing.
When describing a licensing system for the alcohol industry, the authors of Toward Liquor Control warned:
Under the license system, the will to survive permeates every department of the trade, and the means to press a tenacious fight for survival are abundant. As proposals to dismember any part of the liquor selling business become more threatening, the entire trade combines more solidly to protect itself. In brief, a licensed liquor trade, once established, cannot easily be dislodged.127
The following chapters show that Fosdick and Scott might as well have been describing occupational licensing across almost all occupations. Some of the licenses we chronicle—such as those in interior design—are new enough that we can see how the genesis of the law was entirely a product of creative and intensive lobbying by industry representatives, rather than consumers asking for protection and relief from harm. Other licenses—such as those in cosmetology—have existed for decades, their precise origins often lost to the passage of time. Yet the bottleneckers’ efforts to preserve their licenses at the present time illustrates all too well how a bottleneck, in any occupation, “once established, cannot easily be dislodged.” In chapter 2, we see both how a license for selling a product to dispose of the dead is brought to life and how bottleneckers fight for the license’s survival when someone attempts to kill it.
Death is big business in the United States. Each year, Americans arrange more than two million funerals for family members and friends.1 Almost twenty thousand funeral homes handle most of those funerals, resulting in a $16 billion industry.2 On average, families spend between $8,000 and $10,000 for funeral and cemetery costs.3 Of all the elements of a funeral—flowers, music, burial clothes, transportation, the grave plot, and so forth—the single-most-expensive item is typically the casket.4 Average casket costs hover around $2,000 but can easily extend up to $10,000, and sometimes twice that, for ornate hardwood caskets equipped with inner-spring mattresses, satin linings, and hermetic seals. Such prices yield big profits for funeral businesses.5 Funeral home customers pay markups of anywhere from 250 to 600 percent.6
In 1998, Pastor Nathaniel Craigmiles of Chattanooga, Tennessee, was one of those customers. For his mother-in-law’s funeral, Pastor Craigmiles and his family paid $3,200 for a canary-yellow casket that they purchased from a local Chattanooga funeral home. A few months later, while traveling in New York, he was stunned to find an identical casket for sale at a casket retailer for $800.7 Like most consumers, the pastor knew little about the economics of the death-care industry, even though he had ministered to many parishioners as they grieved the loss of loved ones. His own experience compelled him to research the industry; what he found was bottleneckers of what he called “criminal proportions.”
BUILDING MONOPOLIES IN DEATH CARE
Up until the past hundred years or so, American funerals were fairly simple affairs.8 Embalmings and viewings took place in people’s homes, and parlor doorways were purposely built wide enough to allow a coffin to pass through.9 Furniture makers manufactured coffins as a side business, and some of them soon began serving as undertakers, or those who would “undertake” to prepare a body for burial.10 Near the end of the nineteenth century, as funerals started becoming more elaborate and the people who worked at them more specialized, companies sprang up to make coffins.11
With the funeral home emerging as the primary service provider for the preparation and disposition of the dead, undertakers organized their trade so that they could control funeral prices.12 They did so, in the words of the National Funeral Directors Association, to “protect themselves from excessive and therefore harmful competition from within their own ranks . . . [and to] bring a sense of professionalism to what had formerly been for many a mere trade or sideline.”13 The first formal organization of undertakers was the Undertakers Mutual Protective Association of Philadelphia, founded in 1864.14 In most of the major American cities during the period from 1865 to 1880, undertakers formed associations for the purposes of mutual protection.15
State-level undertakers’ organizations formed soon thereafter; the first of them in Michigan.16 From the beginning, associations in states, like those in the cities, were formed to advance the economic interests of their members by protecting them from competition.17 The founding documents of Michigan’s Association of Funeral Directors, for example, stated its purpose as “mutually disseminating the most correct principles of business management, the best methods of protecting our own interests in professional practice, and the general good of all recognized legitimate undertakers.”18 The various city and state undertakers’ associations eventually coalesced into the National Funeral Directors Association (NFDA), which was founded in 1882.19
Even in those early years, there was a protective motivation focused on casket sales. Shortly after its formation, the NFDA adopted a resolution to keep prices as high as possible, stating: “We, as funeral directors, condemn the manufacture of covered caskets at a price less than fifteen dollars for an adult size.”20 Throughout the late-nineteenth and early-twentieth centuries, the association successfully lobbied state legislators to pass laws licensing funeral directors and embalmers.21 In 1894, Virginia became the first state to pass a law regulating embalming. The next year, Alabama, Missouri, and Pennsylvania adopted similar laws; five years later so did twenty-four other states.22 Eventually, all fifty states and the District of Columbia would adopt licensing laws of some sort for funeral directors or embalmers, although Colorado abolished its law in 2009, converting its mandatory license into a voluntary state-certification program.
Under voluntary certification, an occupational practitioner can complete certain requirements associated with education, training, and testing and thereby describe him or herself as a “certified funeral director,” or whatever the position may be. Those who do not complete the requirements and register with the state can still do the work of a funeral director, but they are not permitted to use the title of certified funeral director. Such an arrangement provides greater diversity of options for consumers. Some may value using the services of expensively certified funeral directors and be willing to pay the generally higher costs associated with doing so, while other consumers may see little value in credentials and instead desire the lower-cost services offered by noncertified providers.
In jurisdictions other than Colorado, these options do not exist. Practitioners must have a government-issued license to work. By requiring practitioners to achieve a minimum amount of schooling (often one year), complete an apprenticeship, and pass a licensing examination, state laws created a bottleneck restricting competition within the occupation, insulating it from competition. Consequently, funeral directors grew emboldened to significantly inflate prices of goods and services and institute practices so venal as to capture the attention of the Federal Trade Commission (FTC).
THE FUNERAL RULE TARGETS BOTTLENECKERS
In 1972, the FTC began investigations23 that in 1984 resulted in the adoption of a set of rules governing the funeral industry generally. In its investigations, the FTC found that funeral directors often pressured families to buy unnecessary merchandise, such as caskets for cremation, when no laws required them; inaccurately represented legal, cemetery, and crematory requirements; only discussed prices in person, so that they could apply high-pressure sales tactics; and performed services without permission.24
Because the casket represented the greatest opportunity for profit, funeral directors engaged in unscrupulous techniques—often learned as part of their required schooling25—to persuade people to buy high-priced