Despite licensing reforms, Ohio trails Pennsylvania
pinpoints the states that can serve as models for reform and those that are outliers with room to improve.
With 25,630 separate licensing restrictions, Ohio trails only Indiana among the group. Compare that to only 5,851 in Pennsylvania. Ohio’s administrative code also has three times as many total words related to licensing as Pennsylvania, and the average sentence length of an Ohio licensing regulation is 34 words, or nearly double that of Pennsylvania’s simpler code.
What does all of this tell us? That Ohio regulates far more aspects of work than one of its main competitors for labor and businesses. Not only is it more expensive and difficult to comply with regulations in Ohio, but there is less flexibility and fewer methods by which people can provide their services. It makes getting to work or hiring someone that much easier across the border in Pennsylvania.
Let’s look at one industry as an example. Health care practitioners in Ohio face over 12,258 separate restrictions, compared with 2,722 in Pennsylvania. While patient safety is incredibly important, Ohio’s restrictiveness is out of step. These extra restrictions can reduce the number of health care providers, driving up costs and limiting access to care. It is not clear why we see such remarkable differences between neighboring states when the occupations being regulated are the same.
Unfortunately, all of these extra words don’t just give readers a headache, they hit Ohioans right in their pocketbooks. Limiting entry into a profession also limits healthy competition in the marketplace, which in turn raises prices for millions of consumers who are left with fewer choices. Institute for Justice researchers estimate that occupational licensing regulations cost Ohio residents $209 million each year.
Of course, it’s not just the consumers who suffer. It’s also harmful for the aspiring professionals who are required to go through sometimes-excessive education and training, take exams and pay fees before being able to work. Lower-income workers are hit particularly hard. Because they are often unable to take time off and sacrifice income, licensing can effectively bar them from cutting hair, giving massages or finding other new ways to make a living.
Additionally, rigid requirements make “upskilling” on the job difficult or impossible. Instead of simply setting objective quality standards, licensing laws often tightly regulate exactly how work must be done and what procedures to use. This limits innovation and the ability of professionals to adapt to new circumstances and consumer needs.
Consumer protection is important, but ensuring that it’s properly designed is just as important.
Ohio policymakers clearly care about the issue, and they should stop to consider why their regulations are so much more detailed and onerous than Pennsylvania’s. By moving toward simple, straightforward regulations, Ohio can better compete against neighboring states. Making sure regulations protect consumers does not have to mean sacrificing the state’s economic competitiveness, job opportunities or consumer choices.
Conor Norris is a research analyst at the Knee Center for the Study of Occupational Regulation at Saint Francis University in Loretto, Pennsylvania, and a co-author of the recent study A Snapshot of Occupational Licensing Regulation in the Midwest and MidAtlantic States.