California needs licensing reform
The Gold Rush of the mid1800s attracted 300,000 people to California. But little promise awaits new arrivals in 2024.
Those prospecting for economic opportunity today will discover why more than half a million people have abandoned the Golden State since 2020. High taxes and the cost of living are suffocating. Excessive regulations cast a dark cloud over the business climate, and an ever-increasing minimum wage prevents many young workers from gaining valuable work experience.
New arrivals will also find that California is unfriendly to workers with professional licenses from other states. Sacramento could help turn the tide in population loss if lawmakers passed reforms to recognize out-of-state occupational licenses.
Nearly 25% of jobs in the United States require some form of government sanction. This doesn't just include doctors, engineers and teachers, but also lesser-known examples like milk samplers, hair braiders and massage therapists. Currently, California licenses 153 different occupations, while Kansas requires the least number of licensed occupations at 133.
Nearby Nevada, Arizona and Colorado regularly welcome Californians — not only with lower taxes and a lower cost of living, but also by recognizing their out-of-state occupational licenses. This means licensed professionals can quickly begin working upon arrival, rather than wasting time and money to get re-licensed in their new home state.
The COVID-19 pandemic highlighted the problem with occupational licensing barriers across state lines when additional healthcare workers were needed in states affected most by the virus. New York, for instance, issued temporary executive orders recognizing licenses for out-of-state healthcare workers to meet the increased demand for critical care.
While it is important for healthcare workers to freely work across states during an emergency, the demand for workers from other states exists outside of pandemics and across industries. Building on the success of those temporary measures, states can make these reforms permanent and let all workers from all professions more easily move and work across state lines.
Today, 22 states have occupational licensing recognition policies on the books. As explained in the new American Legislative Exchange Council report, “Labor Policy Report: 50 State Factsheets,” a recognition laws assert that “if you have held an occupational license for over a year, states should grant you a state license.”
That means a veteran, licensed paving contractor from California could almost seamlessly move to Arizona and continue working, provided they pass a jurisprudential examination. In the opposite scenario, the paving contractor relocating to California faces significant professional uncertainty and might need to pass three exams and gain additional years of experience to meet California requirements before being allowed to perform the same job in the state.
Why move to a state that will require you to go back to school for a job you've been successfully performing for years?
While California's incredibly tough licensing laws create an economic roadblock, many state legislators across the country have realized that license recognition is an effective way to attract experienced workers and allow skilled professionals to carry their expertise across state lines.
If leaders in Sacramento are serious about reversing the California exodus, this expansion of worker freedom is worth pursuing.
Gretchen Baldau is a senior director at the American Legislative Exchange Council (ALEC).