Trying to make gains on licensing reform
IN far too many cases in Oklahoma and around the country, occupational licensing serves as a license to protect established industries from competition. Perhaps the work of a Federal Trade Commission task force will result in fewer such licenses and thus more jobs for Americans.
The task force, led by acting FTC Chairwoman Maureen Ohlhaussen, has a roundtable planned Thursday in Washington, D.C., to look at how state-specific licensing causes barriers for workers. Another topic of conversation involves initiatives directed toward military families, who because they move so frequently are impacted by the broad range of licensing requirements.
“Portability strategies are a good starting point for occupational license reform because they are a noncontroversial step to reduce the burden on military families,” writes Charles Henderson, a contributor to economics21.org. “But reform will be an incremental process, and state policymakers will have to cooperate with the FTC to remove barriers to opportunity for more people.”
That cooperation is indeed crucial. The FTC push won’t do much good if states aren’t willing to change their occupational licensing laws. But change won’t be easy.
The Institute for Justice, which analyzed requirements for 102 low-income occupations across the 50 states and the District of Columbia, cited a legislative effort in Florida in 2011 to end licensing for 20 jobs, including ballroom dance teachers, auctioneers and hair braiders. “But the bill eventually failed in the face of stiff resistance from industry pressure,” the IJ said.
Because licensing is controlled by states, there is a crazy quilt of rules and regulations. The IJ found that 66 occupations have greater average licensure burdens than emergency medical technicians, who “literally … hold lives in their hands.” The list includes barbers, interior designers and manicurists.
Those seeking to become barbers in Nevada must endure nearly 2 ½ years of education and training. But in Wyoming, you earn your shears in 175 days.
(Cities get into the licensing act, too. The state of Minnesota doesn’t license tree trimmers, but Minneapolis does. New York City recently banned pet sitting without a kennel license.)
The IJ found that Oklahoma requires licenses for 29 of the jobs it studied, placing the state No. 41 nationally. Yet Oklahoma has the 11th-most burdensome licensing laws, requiring an average of $116 in fees, 416 days of training and two exams.
The IJ said Oklahoma is one of just six states that license title examiners and social and human service assistants, and one of seven states that license packagers. Prospective security alarm installers must get nearly four years of training in Oklahoma; the national average is a year-and-a-half.
“Though Oklahoma has a fairly low ranking, it could promote low-income jobs by reducing or removing some of the barriers,” the report said.
In his article, Henderson cited research by University of Minnesota professor Morris Kleiner, who found that occupational licenses restrict interstate mobility, result in fewer jobs and have no clear effect on the quality of services provided. With any luck, the FTC’s effort will help shake the trees a bit on an issue that badly needs it.