ARLINGTON, Va.—Nearly 1 in 4 Americans needs a government license to work and state lawmakers are asked every year to consider new occupational licenses. In more than a dozen states, government analysts study the need for proposed licenses and make a recommendation to the legislature. The Institute for Justice (IJ) conducted the first ever comprehensive study of these “sunrise” reviews and found that they overwhelmingly recommend against licensing—and most recommend no new regulation. The new report, “Too Many Licenses? Government ‘Sunrise’ Reviews Cast Doubt on Barriers to Work,” provides valuable insights for lawmakers being asked to create new barriers to work.
“Lawmakers should think twice before they put restrictions on people earning an honest living,” said IJ Researcher Kathy Sanchez. “When experts take a good, hard look at whether new licenses will protect the public, they usually conclude that they will not. Despite the claims of occupational lobbies, decades of sunrise reviews suggest licensing often is not the answer.”
The new study analyzed nearly 500 sunrise reviews, spanning 33 years, 15 states and over 200 occupations. The key findings include:
- Occupational lobbies, not consumer complaints, drove the push for licensing. Occupational and professional associations initiated at least 83% of sunrise reviews, while consumer advocates were behind just 4%. Occupational lobbies rarely sought less restrictive alternatives, such as certification or registration.
- Sunrise reviews overwhelmingly recommended against licensing—and most recommended no new regulation. About 80% of reviews declined to recommend licensure, and 54% concluded no new regulation was needed. This held true even for health-related occupations, with 75% of reviews declining to recommend licensure.
- Legislatures often heeded reviews’ warnings against regulation, but they enacted licensing more often than recommended. When reviews did not recommend licensing, legislatures followed their lead in 65% of cases, ultimately declining to enact 189 of 273 licenses. But they did enact 84 licenses that were not recommended.
Enacting new licenses inevitably means that some people will no longer be able to earn an honest living in an occupation where they have training and experience but do not meet the new requirements. The study highlights the example of lactation consultants in Georgia, which licensed the occupation despite a 2013 sunrise review recommending against doing so.
Georgia lawmakers were persuaded by members of the U.S. Lactation Consultant Association to create a license whose requirements corresponded with those for certification by the International Board of Lactation Consultant Examiners (IBLCE). The license demands two years of college courses and more than 300 hours of clinical work. It also threatens to make it illegal for hundreds of women who hold a different lactation consultant certification to continue to offer their services. As only about 1 in 8 lactation consultants in the state are IBLCE certified, the potential consequences for Georgia mothers and babies are dire.
IJ joined with Reaching Our Sisters Everywhere (ROSE), a nonprofit that supports lactation consultants and new mothers, to file a lawsuit to preserve these women’s right to earn an honest living. After a procedural victory at the Georgia Supreme Court, the case was sent back to a lower court for full consideration. A decision is expected later this year.
“Licensing an occupation has consequences. It can rob people of their livelihoods and make it harder for consumers to access critical services,” said IJ Senior Director of Strategic Research Lisa Knepper. “Hundreds of government studies find licensing is often a bad idea, despite the claims of influential lobbies. Lawmakers should resist their pleas to take a job that was perfectly legal yesterday and make it a crime today.”
In addition to defending workers subject to unnecessary licenses, IJ has developed model legislation—the Occupational Licensing Review Act—that legislators can use to enact a sunrise review process that effectively balances public safety and economic opportunity. Previous IJ research on occupational licensing has revealed the shocking amount of beauty school debt taken on by people seeking cosmetology licenses, the economic costs of licensing, as well as the breadth and burden of occupational licenses for lower-income occupations nationwide.