Feb 03, 2016

Out of Control Occupational Licensing Laws are Hurting Americans

Post by Derek Yale

Across America, overreaching occupational licensing laws are significantly limiting professional opportunities for the people who need them most. Read Andy Koenig’s Politico op-ed on the far-reaching consequences of over-licensing.

It Takes 890 Days to Become a Barber in Nevada

Not many Americans would consider going to a doctor who isn’t licensed to practice medicine. But what about your barber? Your interior decorator? Or the person who boxes your Amazon delivery?

Today, these and dozens of other entry- and midlevel professions are covered by “occupational licenses.” In some states, more than 70 professions require licenses — and that doesn’t include the countless others that are licensed by local governments. And although this might sound like an obscure administrative issue, it has far-reaching consequences. Lawmakers, economists and activists have started to worry that over-licensing significantly limits professional opportunities for people who need them most.

On Tuesday, a Senate subcommittee led by Sen. Mike Lee (R-Utah) that deals with competition policy will hold a hearing on occupational licensing to discuss how licenses can stifle economic opportunity and competition. It’s the latest sign that occupational licensing laws are receiving greater attention on the national level, even though it is largely a state and local issue.

Occupational licenses typically require individuals to receive approval from a government-chartered board before starting a particular job or business — a process that can be expensive, time-consuming, or both. Historically, licenses applied only to people in a limited number of professions, such as doctors, pilots and lawyers, yet the list of licensed industries has become more lengthy — and less defensible — in recent decades. Since the 1950s, the percentage of jobs licensed at the state level has quintupled, rising from 5 percent to at least 25 percent.

When you add in local licensing requirements, well over a thousand professions are now affected, including hundreds in low- and middle-income categories.

 

Read the full op-ed.