The Bureau of Labor Statistics Releases New Data on Occupational Licensing

A growing number of organizations are concerned by the growth of occupational licensing in America. In 2012, the Institute for Justice released the landmark report License to Work, which brought further attention to this issue. Last week, as part of the growing concern over occupational licensing, the Department of Labor’s Bureau of Labor Statistics (BLS) released a new data set which tracks occupational licenses and certifications.

A study by Morris Kleiner found that in the 1950s only one in 20 American workers needed an occupational license. But recent data from the BLS shows that number has grown to 22.4 percent of American workers.

The primary problem with occupational licensing, according to a recent Wall Street Journal article, is that it artificially restricts competition:

When it comes to unemployment rates, the difference is even bigger between those with and without certificates and licenses. Those without high-school diplomas and without any occupational license or certificate had an 8.2% unemployment rate last year, compared with 5.1% for those with a credential. For those with no schooling beyond their high-school diplomas, the average certificate-holder had 3.1% unemployment compared with 5.9% for those without. Regardless of one’s level of education, the unemployment rate is significantly lower for those who also hold a license.

According to IJ’s report License to Work, in Iowa an EMT only has to take 120 hours of training to be licensed, but a cosmetology license requires 2,100 hours of training. IJ is currently litigating on behalf of hair braiders in Iowa because they are required to get a cosmetology license to charge for their services, even though cosmetology schools in the state don’t teach hair braiding.

Last year a BLS report found that only eight occupations have been “de-licensed” since 1970. But recently the issue has been getting more attention. Last year, the Brookings Institute and the White House each issued reports on the negative effects of occupational licensing and called for reforms. Occupational licensing is now getting national scrutiny.