FEBRUARY 6, 2015 — People should be free to work in a legal occupation of their choosing without being subject to arbitrary government mandates, but, increasingly, occupational licensing laws prevent them from doing so. Now even the White House has taken notice.
“The (federal) budget seeks to reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do by putting in place unnecessary training and high fees,” reads a budget fact sheet outlining President Barack Obama’s “middle-class economics” proposal. But the president’s proposal calls for $15 million for states to study the costs and benefits of their licensing laws and an additional $500 million for central planners to develop credentials that could be used in community colleges.
Not only is this not the role of the federal government, but one of the major problems with licensing is that its one-size-fits-all mandates tend to be subjective, unnecessary and ill-suited to meeting a variety of consumer preferences. We don’t need more one-size-fits-all solutions. It is much better to let consumers — not government “experts” — make these decisions.
And while occupational licensing hurts workers and consumers broadly, it hits the poor especially hard. “Our research shows, and other research shows, that licensure disproportionately affects people of less means, people of color, people making a middle career change and people on the first rung of the economic ladder,” explained Dick Carpenter, director of Strategic Research for the Institute for Justice. He co-authored a 2012 study, “License to Work,” which analyzed a wide variety of state licensing requirements. His organization has won a number of legal battles over restrictive licensing laws covering hair braiders, casket makers, interior designers and taxi drivers, among others.
It is encouraging that leaders from both sides of the political aisle recognize the need to tear down regulatory barriers to work in order to reduce poverty, increase economic opportunity and grow the economy. But what is really needed is more action at the state level, not more federal funding or government studies about the “right” credentials or licensing requirements.