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Tear Down Barriers to Work

By Lisa Knepper
Published on Monday, August 13, 2012
SPN NEWS JULY/AUGUST 2012

For most people, landing a job means convincing a prospective employer or potential customer of your qualifications.  But for a growing segment of Americans, it means convincing the government.

That's what an occupational license is - government permission to work in a particular field - and today, nearly one in three U.S. workers needs a license, up from just one in 20 in the 1950s, according to University of Minnesota economist Morris Kleiner. As millions of Americans struggle to find work, it is time for states to re-think this tangled web of regulations, and free-market state think tanks can lead the way.                

"No one's ever heard of someone being hurt from house painting," said Jarrett Skorup of the Mackinac Center for Public Policy.  Yet, according to a new national study from the Institute for Justice, Michigan is one of just a handful of states that requires a license to paint a house for pay, and it demands 60 hours of classes, fees, and two exams to get one.  

IJ's study, "License to Work," documents the most common licensing requirements, such as state-mandated education or apprenticeship, exams, and fees for 102 low- and moderate-income occupations across all 50 states and the District of Columbia.  The report's rankings of states and comparisons of licensing burdens across states can help advocates build a case for reform.

Skorup likes to point out that barbers, who face steep licensing requirements nearly everywhere, are not licensed in Alabama - suggesting that the lengthy training required by Michigan and most other states isn't really necessary.

Drawing on cross-state comparisons like that, Skorup published a Detroit News op-ed and five online articles, which led to several radio interviews, exposing the irrational barriers Michigan puts in the way of would-be lower-income workers.  "The response has been overwhelmingly positive," he said.  "This is something people are interested in across the aisle."  He has heard from two legislators interested in pushing reform bills and expects more in the upcoming session.

The 102 occupations studied in "License to Work" provide plenty of fodder for reform and make for easy cross-state comparisons, but they are by no means the only jobs with licensing and related barriers.  

Clark Riemer of the Civitas Institute created a list of some 700 occupations that face licensing or other regulatory burdens in North Carolina.  That formed the basis for his three-part "Held Back by Red Tape" series that identified particularly egregious licensing schemes and made recommendations for reform, including eliminating licensing boards with little disciplinary activity or that don't pass the "laugh test" and, where licensing is maintained, reducing needlessly burdensome requirements.

In a new in-depth report that tackles licensing in Arizona and beyond, Byron Schlomach of the Goldwater Institute makes a case for periodic review of existing licensing laws, replacing licensing with voluntary certification and enacting legislation that protects a right to earn a living (model legislation is available in the report and at IJ.org/legislation), among other policy options.

It's also important to keep tabs on proposals for more licensing.  As Riemer points out, "Oftentimes, the only real constituency for these laws is the people being licensed."  So the public often doesn't know about new proposals, and it falls to watchdog groups to identify and fight them, as Civitas and the John Locke Foundation did in helping to kill a bill to increase requirements for landscape contractors that had, until their involvement, quietly moved through the legislature. 

The Civitas and John Locke experience shows that victories can be won.   Indeed, in recent years, Louisiana eliminated licensing for home-entertainment installers, and Arizona did away with its Structural Pest Control Commission altogether.  Mississippi replaced its cosmetology-license requirement for African-style hairbraiders with registration and saw 300 braiders register.

With more dismal jobs news every day, there is something state governments can do without spending a dime:  Get out of the way. Make it easier for those out of work to move into new occupations, and free entrepreneurs to create new businesses and more jobs - and stop putting needless licensing hurdles in their way.  

Lisa Knepper is a director of strategic research at the Institute for Justice. Write her at lknepper@ij.org.

 

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