Now Is the Time for Occupational Licensing Reform | Citizens Against Government Waste

Now Is the Time for Occupational Licensing Reform

The WasteWatcher

Since the onset of the coronavirus pandemic, state governments have been making changes in occupational licensing laws and regulations to make it easier to provide needed services and help individuals who find themselves unable to complete educational requirements or are simply out of work.  From telehealth to teaching to service businesses, deregulatory measures have taken place all over the country.  However, most of these measures are only temporary and do not address long-term problems with occupational licensing. 

It took a healthcare crisis like the coronavirus pandemic for many states to realize the need to reduce licensing restrictions and recognizing licenses granted in other states.  The states that have reduced these restrictions are starting to see the positive effect of these changes.  States should now take steps to make these reductions permanent.

Over sixty years ago, only 4 to 5 percent of occupations required licenses. Heritage Foundation Senior Legal Research Fellow Paul Larkin Jr. reported in May 2017 that the percentage of occupations that now require licenses have “multiplied over 500 percent” since 1950. Occupational licensing jobs comprise more than 25 percent of the economy, and the U.S. Bureau of Labor Statistics expects occupational employment requiring a license to increase by 5.2 percent between 2018 and 2028. 

In 2017, the Institute for Justice (IJ) released state rankings of occupational licensing laws. The report ranked states by the “most burdensome licensing laws” based on education and experience, and “most broadly and onerously licensed state” based on education, experience, fees and exams, as well as grade and age requirements.  It also listed which states required certain occupational licenses. Among the occupations requiring a license included auctioneers, bus drivers, cosmetologists, educators and pharmacy technicians to name a few.

According to the IJ list, Hawaii ranks first for the “most burdensome licensing laws” and Nebraska ranks last.  California ranks first for the “most broadly and onerously licensed state”  while Wyoming ranks last.  The list includes a total of 102 licensed occupations across the country.   Louisiana and Washington tie for the most occupational license requirements at 77 each, while Wyoming has the fewest at 26.

Hawaii’s licensing laws require on average 988 days in education and experience with an average of more than $430 in annual fees.  In addition to the educational, experience, and fee imposition, the state also requires two examinations for most occupations.  Nevada follows in second place to Hawaii by requiring 860 days of education and experience, with more than $700 in annual fees on average along with two exams.  By comparison, Nebraska only requires 188 days of education and experience on average with only $76 in fees and one exam.  

California is considered to be the “most broadly and onerously licensed state.”  With 76 licenses among the 102 studied, the state requires on average 827 days of education requirements along with $486 in annual fees and with two exams.  The minimum average age for licenses is 15 and attaining most licenses require an average grade of 1.  However, Wyoming only requires $345 in fees, 280 days of education, two exams for most occupations, and an age requirement of 11 to have a license.

While many states have heavy burdens, others are working to reform their licensing laws.

In Florida, Governor Ron DeSantis (R) signed “The Occupational Freedom and Opportunity Act” into law on June 30.  This new law is one of the few that will permanently, rather than temporarily, change occupational licensing laws for hairdressers, interior designers, nutritionists and workers in other fields.  Before the reform, Florida ranked fifth for most burdensome licensing laws.

On June 15, the Ohio General Assembly unanimously passed a bill that would reduce barriers for education, healthcare and small businesses. 

Removing occupational licensing barriers permanently will relieve individuals of high fees and burdensome educational requirements.  With many rules and regulations being suspended during the pandemic, there is no better time than now to permanently reform occupational licensing laws to enable millions of Americans to get back to work more quickly, while saving them time and money.