New Year’s resolutions can kickstart a good year coming out of the holiday season. In our own lives, we typically focus on things such as exercising, eating healthier, or spending more time with family.
As we begin 2023, we should also use this opportunity to set goals for legislatures, much like we set goals for ourselves.
Reforming occupational licensing laws
is one way we can help make life easier for
workers.
INFLATION TOP CONCERN FOR SMALL BUSINESSES EVEN AFTER RECENT DECLINES: SURVEY
Many people faced another difficult year in 2022. Continuing pandemic disruptions, record inflation, and housing markets hit us all hard. Congressional gridlock isn’t likely to go away soon, but state legislatures have the ability to ease things.
Much like our personal New Year’s resolutions, we don’t need to do anything drastic. Small improvements can go a long way and are more attainable. Now more than ever, we should make it easy for people to find meaningful work. Inflation is down from its highs, but price increases continue to squeeze
our pocketbooks.
Occupational licensing reform is not a cure-all for our economic woes. But it will help people find work or find better work. A good job provides life satisfaction and helps people weather economic difficulties.
Given the three-ring circus in Washington, D.C., it may come as a surprise that bipartisan issues exist.
Republicans
and
Democrats
alike recognize that the costs of our current licensing laws often outweigh their benefits. In many states, this consensus has translated to taking action.
States that have not yet considered reforms should consider three New Year’s resolutions. First is the Right to Earn a Living Act. Licensing laws set requirements that professionals must meet before they can legally work in a profession. They typically include education, training, and passing exams. These requirements, though well-intentioned, create a barrier to entry. And this barrier can be a real hurdle: Licensing can
reduce
the number of professionals by up to 27% without having any
effect
on quality.
How would the Right to Earn a Living Act help? Under these laws, anyone has the standing to sue the state for burdensome licensing requirements. States must justify the requirements and demonstrate that they serve a legitimate purpose. The goal isn’t to remove all licensing laws. Instead, it makes sure requirements are right-sized, balancing our right to work with consumer safety. Louisiana enacted this
reform
in June 2022.
Second is the universal recognition of out-of-state licenses. Licensing requirements not only make it more difficult to enter a profession, but they also make it more difficult for licensed professionals to
move to a new state
. Because occupational licensing is passed on the state level, moving to a new state requires a professional to apply for a new license, which can take months. Sometimes they even have to retake courses or pass exams, making the process take even longer.
Universal recognition allows skilled workers, who have demonstrated their competence through meeting licensing requirements and practicing without harming consumers, to do their jobs without unnecessary delays. Rather than remove licensing laws, it simply recognizes licenses from other states.
Ohio
joined 18 other states that have enacted this reform to start 2023 on the right foot.
Finally, states should establish independent oversight of licensing boards. Licensing boards are made up of members of the profession who, unfortunately, have an incentive to act anti-competitively. A Supreme Court case, FTC v. NC Dental,
requires
states to provide some sort of oversight of boards. So far, few states have done so.
But we do have examples. In 2017,
Mississippi
created the Occupational Licensing Review Commission, which reviews newly proposed and existing licensing requirements.
Pennsylvania’s
Department of State has a member on each licensing board to protect consumers, and
Arizona
requires a certain number of members on boards to represent the public.
State governments have the opportunity to help workers struggling through the tough economic climate. These reforms will not fix every problem our economy is facing, but all three of our resolutions can make a real difference in the lives of people across the country.
Here’s hoping that in 2023 we resolve to make simple, reasonable reforms to help workers.
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Conor Norris
is the assistant director and
Edward Timmons
is the director at the Knee Center for the Study of Occupational Regulation at West Virginia University. Timmons is also a senior research fellow with the
Archbridge Institute
.
