New Website Shows Human Cost of Occupational Licensing Laws

OccupationalLicensing.com hosts occupation and state licensing profiles to guide policy makers and others make informed decisions about licensing laws

Arlington, Va.—For more than 25 years, the Institute for Justice (IJ) has led the fight nationwide to eliminate burdensome occupational licensing. Now, as part of that ongoing effort, IJ has launched OccupationalLicensing.com to help policy makers, the public, and everyone in between better understand how occupational licensing laws block Americans’ ability to earn an honest living. The website gives users a useful new online tool to identify, understand, and hopefully eliminate onerous regulations that prevent lower- and middle-income individuals from being able to work.

In the 1950s, only one in every 20 U.S. workers needed certification from the government to pursue their chosen occupation. Six decades later, that figure has risen to almost one in four. Licensing requirements affect a broad array of lower-income occupations in different states, including bartenders, hair stylists, fishermen, funeral attendants and massage therapists. Anybody who runs afoul of these strict licensing laws can face ruinous fines and even jail time for actions as harmless as opening a barber shop to the public or criticizing traffic lights without an engineering degree.

“Occupational licensing is a not only anti-competitive but also anachronistic when—for instance—customers can find a provider’s reputation on their phones or a website,” said IJ Senior Legislative Counsel Lee McGrath. “As licensing requirements have expanded their reach, they have destroyed countless jobs, hampered economic liberty and made it difficult for hardworking people from disadvantaged backgrounds to earn an honest living. This new website will make it easier to analyze and highlight these harmful policies, empowering state and local policymakers to cut the red tape and support a healthy, job-creating economy for their constituents.”

Growing calls for licensing reform have given the issue increasing national prominence and bipartisan support for reform. The Obama administration released a white paper in 2016 recommending “New Steps to Reduce Unnecessary Occupation Licenses that are Limiting Worker Mobility and Reducing Wages.” In July 2017, U.S. Labor Secretary Alexander Acosta spoke to state lawmakers in Denver about the need for reform in state legislatures—a position echoing an earlier speech from Acting Federal Trade Commission (FTC) Chair, Maureen Ohlhausen. License reform also received an endorsement in the 2016 GOP platform.

To earn an occupational license, applicants must clear various hurdles, such as minimum requirements for education or training, paying fees, or passing exams. IJ’s 2012 “License to Work” report studied 102 occupations nationwide and determined that, on average, aspiring workers had to pay $209 in fees, take one exam and dedicate about nine months of education and training in order to earn a license. Moreover, the report determined that 35 occupations require more than a year of education and training and another 32 require three to nine months. These government permission slips impose substantial barriers on jobseekers, particularly minority or lower-income workers, and those with fewer academic credentials.

The new site also breaks down IJ’s research by state and occupation.

IJ attorneys have taken on many of these restrictive licensing laws in court, leading to rollbacks of state licensing requirements from Arizona to Texas to Washington, among others. Current IJ lawsuits are challenging more restrictions from Georgia to Missouri to Oregon.

“You shouldn’t need the government’s permission to earn an honest living,” Lee added. “Between OccupationalLicensing.com and IJ’s Model Economic Liberty Law, state leaders have ample means to empower their constituents. Lawmakers in Arizona, Mississippi and Wisconsin have recently taken solid steps toward broad reforms to solve this problem. Lawmakers in every state should join them.”

JOIN THE FIGHT!   Sign up for newsletters:

JOIN THE FIGHT!