Repeal and Reduce Licensing Barriers

The most direct way to free workers and entrepreneurs from licensing red tape is to repeal and reduce needless barriers. A good example comes from Tennessee’s experience with locksmith licensing. In 2006, the state had about 5,000 locksmiths. That same year, the state started requiring locksmiths to be licensed. By 2016, the number of locksmiths in the state had declined to less than 1,000. Recognizing that the locksmith license was needlessly shutting workers out, Tennessee repealed it in 2021. ¹   

How to know which licenses to target? One way policymakers can identify candidates for reform is by searching our License to Work data and other licensing databases for occupations licensed by their state but not others, as well as licenses with overly steep requirements, including excessive education and experience mandates and needless high school graduation requirements. (The “Compare States” feature on our website makes this easy to do.) The Occupational Regulation Database from the Knee Center for the Study of Occupational Regulation ²  and the National Occupational Licensing Database from the National Conference of State Legislatures ³ are other great resources created since we published the first edition of License to Work in 2012. Together with our data, they provide important insight into the breadth and burden of licensing in the United States.

Another resource is IJ’s online archive of sunrise reports. ⁴  Policymakers can easily search 200-plus occupations and find sunrise reports prepared by state governments. Most of these gather extensive evidence and conduct in-depth analysis to determine whether occupations should be licensed, regulated less restrictively or not regulated at all. They can provide policymakers facing questions about what to license—and what not to license—with valuable information and insight.

For example, Massachusetts licensed dental assistants in 2015. ⁵  But searching our archive, lawmakers would find that Nebraska has twice rejected proposals to license the occupation. In its most recent review, from 2009, Nebraska found dental assistant licensure would limit access to care and the public could be protected by less costly means. ⁶  Nebraska’s sunrise findings suggest Massachusetts should reconsider its license.

Additional resources for policymakers looking to eliminate or lessen licensure burdens are IJ’s inverted pyramid of less restrictive alternatives to licensing (see Figure 23) and the Council on Licensure, Enforcement and Regulation’s Questions a Legislator Should Ask. ⁷  These resources provide frameworks and practical guidance for exploring whether an occupation presents a real threat of harm—and whether licensing or a less restrictive alternative is the most appropriate regulatory tool to address that harm. CLEAR’s questions are framed as ones legislators should ask when considering the need for proposed licenses, but they are also pertinent when considering the need for existing licenses.

To illustrate, CLEAR recommends that legislators ask: “Do other states regulate this profession? If not, why not? If so, what regulatory models do the other states employ?” ⁸  For most occupations, legislators will be able to find at least one unlicensed state, and they should ask why that is. They may conclude that their own state’s license is unnecessary. For example, only 16 states license crane operators because the occupation is already subject to federal OSHA standards. ⁹  This realization prompted West Virginia legislators to repeal their state’s crane operator license effective January 1, 2022. ¹⁰

Assiduous use of these resources will likely suggest numerous candidates for repeal. But if policymakers decide a license is necessary to protect the public, their work is only half done. They must also carefully examine whether the license’s requirements are narrowly focused on protecting against substantial and substantiated threats to public health and safety. Anything beyond that may serve only to restrict competition.

Utah illustrated this approach when it loosened requirements for general contractors—which we do not observe in this study ¹¹ —in 2019. Recognizing that its trade exam was not tied to a legitimate public health or safety outcome, the state eliminated it. ¹²  Now, applicants must pass only the business and law exam. It does appear the trade exam was a significant hurdle for many aspirants: In the first four months following its elimination, more people took the business and law exam than in the entirety of 2018. ¹³