States are looking to overhaul their occupational licensing laws, the regulations that require people to be registered with a state or local government before they are allowed to work in a particular field, as the regulations are criticized for making employment too difficult.
Numerous studies have argued that the regulations hurt more than they help because they make it harder for people to take on certain professions or to move from one state to another.
Eleven states — Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah, and Wisconsin – are planning to meet in Tucson, Ariz., in December to examine ways to lighten the burden the laws place on workers. The meeting will focus on professions that don't require college degrees but are regulated in more than 30 states. The National Conference of State Legislatures, the National Governors' Association, and Council of State Governments are coordinating it.
Occupational licenses are given almost entirely at the state level, meaning that the requirements can vary widely from one to another, making it difficult for people to relocate and stay in their current profession, said Victoria Wilkins, commissioner of occupational and professional licensing for the Maryland Department of Labor, Licensing and Regulation.
Licensing is generally justified on the grounds of public safety or fraud protection. But while it makes sense to license people in fields such as healthcare, many local governments regulate careers in which the public benefit is harder to justify: beauticians, tour guides, and tax preparers, among others. Over the last 60 years, the number of jobs requiring an occupational license has grown from about one in 20 American workers to about one in four.
"The accelerating diffusion of licensing requirements around the country has created additional challenges for certain populations to enter the job market, including veterans and military families, immigrants with work authorization, individuals with a criminal history, and Americans who have been out of the labor market for an extended period of time," said Albert Downs, policy specialist in the National Conference of State Legislatures' employment, labor and retirement program.
That creates a drag on the economy. A 2015 study by the Brookings Institution found there were "far more cases" in which licensing reduced employment than ones where it improved the quality and safety of services. The restrictions have resulted in 2.8 million fewer jobs nationally and raised consumer costs by $203 billion annually, Brookings found.
While careers that require a college education have a fair amount of uniformity among states, the issue is much murkier for the ones that don't, Wilkins notes. Most states have boards or commissions made of volunteers from a particular field, and their standards can vary vary wildly from state to state.
"One state may require a 1,000 hours or study or apprencticeship before granting a license. Another may only require 100," Wilkins said. And transferring credentials from one state to another can be difficult. "It is a particular issue for military spouses, who often have to relocate."
Most states have little understanding of how a profession is regulated in other states, she adds. "I could always pick up the phone can call one of my counterparts in another state. The advantage of this [December event] is to get to get all of us together under the same roof so we can really learn from what each other has done."
Both political parties have called for reform. In 2015, former President Barack Obama set aside $15 million in the Labor Department budget to help states identify, explore and address areas "where licensing requirements create barriers to labor market entry." President Trump's labor secretary, Alexander Acosta, told state lawmakers at a July meeting of the American Legislative Exchange Council, "Taking up this issue is one way that you, as legislators, can have immediate, consequential, and measurable impact. You have a tremendous opportunity to help create millions of jobs, without spending a dime."