I think people would certainly pay more for a reliable and stylish haircut even if they could get a bottom barrel haircut from a high schooler. You just pay for the quality of work you want done.
What you call race to the bottom, I as a consumer call fair pricing not controlled by syndicates.
Controlling the market by limiting the job pool to just the people who can already afford the time let alone the licensing fees really just serves to keep people in poverty. How many people could be working right now but can't afford the time and money to get licensed?