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Get Government Out of the Licensing Business

Article by Robert Asahina June 14, 2012 //   4 minute read

At a time when unemployment remains high and economic growth is sluggish, you’d think state governments would be trying to make it easier for people to find work. But you’d be wrong, at least judging by the proliferation of license requirements for occupations ranging from interior designer to home entertainment system installer. According to a new study by the Institute for Justice, “License to Work,”

In the 1950s, only one in 20 U.S. workers needed the government’s permission to pursue their chosen occupation…. Today that figure stands at almost one in three.

The study lists 102 such occupations, including florists, tree trimmers, and upholsterers. License requirements include “fees, education and training, exams, minimum age and minimum grade completed.” For example, although they are licensed in only three states and D.C., interior designers

must pass a national exam, pay an average of $364 in fees and devote an average of almost 2,200 days — six years — to a combination of education and apprenticeship before they can begin work.

Another 29 occupations across the nation “require one to three years education and training, while another 32 require three months to one year.” And the study found that the average occupational license requires “paying $209, passing one exam, and completing more than 275 days, or about nine months, of education and training.” Among the states, Louisiana requires the most occupational licenses (71) of the 102 jobs in the study, followed by Arizona (64), California (62), and Oregon (59). Measured by the burden imposed, the worst state is Hawaii, which requires an average of more than $360 in fees, 724 days of education and experience, and two exams. Of course, nobody seriously argues that physicians and attorneys should not be rigorously trained and licensed. But “the need to license any number of the occupations in this sample defies common sense,” the study concludes. States impose “irrational and inconsistent burdens” and help protect practitioners from competition rather than lower costs for consumers. And, as the Institute for Justice points out, the licensed occupations include “many often filled by those of modest means, such as cosmetologists, auctioneers, locksmiths, interior designers, and African-style hairbraiders.”

Such licensure hurdles are likely exceptionally burdensome for lower-income workers [and] increase consumer costs and reduce opportunities for workers, particularly for those with less education and older workers who may want to switch careers.

To insure quality, alternatives to licensing include voluntary certification through professional organizations, as well as third-party monitoring of occupations and service providers by such organizations as the Better Business Bureau or Angie’s List. “Finding a job or creating new jobs should not require a permission slip from the government,” the study concludes.

As millions of Americans struggle to find productive work, one of the quickest ways legislators can help is simply get out of the way: Reduce or remove burdensome regulations that force job-seekers and would-be entrepreneurs to spend precious time and money earning a license instead of working.