A recent op-ed by Mark V. Holden, reprinted in newspapers across the U.S., calls the practice of occupational licensing into question. The author asks state and local governments to “break down barriers to opportunity for the least fortunate,” rightly pointing out that everyone from advocacy groups like IJ to the White House have called for serious reform to licensing laws.
Holden references IJ’s highly-cited 2012 study License to Work, which measured for the first time how burdensome occupational licensing is for workers in 102 low- and moderate-income jobs.
While acknowledging the need for some professional licenses, Holden points out just how many small businesses now require licenses, saying:
“That wasn’t a huge deal when occupational licenses applied only to lawyers, doctors and airline pilots. But other businesses quickly found they could handicap competitors and innovative start-ups if they licensed their own industries.”
The op-ed also references IJ’s data concerning the number of professions that require a license in different states. In Tennessee, for example, “no fewer than 53 of the 100 most common low- and moderate-income jobs in the state require licenses.” This includes jobs such as locksmith, barber, and shampooer.
Holden also mentions a 2011 study, which found that strict licensing prevented the creation of nearly 3 million jobs and cost consumers $203 billion in higher prices.
IJ has been working since its inception to curb occupational licensing laws that stifle competition and keep workers and entrepreneurs out of the market. In spite of numerous legal victories striking down these laws, many lawmakers still choose to engage in this form of protectionism, shielding rent-seeking businesses from honest competition and denying consumers a choice.