We must welcome workers from other states to ease shortage
A bill currently in the legislature, HB 203, would remove roadblocks for some workers who would like to move to Ohio. The state’s labor market is struggling to recover from the pandemic, partly thanks to a shortage of skilled workers to fill open positions. With so many businesses unable to find enough employees, it’s a good time to think about whether one particular type of workplace regulation is helping or hurting.
Around one-third of American small businesses closed during the first year of the pandemic. Some surviving and reopened businesses are still struggling to keep their doors open, partly because of how difficult it’s been to hire people.
The most recent Ohio Manufacturing Report showed just how widespread this problem is, with 57% of respondents saying a shortage of skilled workers was restricting business growth in the state.
If enacted, HB 203 would make Ohio honor occupational licenses granted by other states, in turn making it easier for skilled workers to move in. It would require professional licensing boards to issue licenses to already certified professionals who have practiced their trades elsewhere without disciplinary action.
Occupational licensing affects almost a quarter of workers in the United States today. We typically think of it for physicians and lawyers, however, it’s spread to many professions which do not require a college degree or include obvious public safety concerns (think barbers, opticians, massage therapists, and many more).
Because licensing laws are passed by states, it can be difficult for these licensed professionals to move somewhere else. They are often forced to reapply for licensure before they can start working. Too often, their training and education is not accepted by their new state, and they are forced to go through it again, costing them hundreds or even thousands of dollars.
Moving is already a costly and time-consuming process. Occupational licensing adds even more costs, making people less likely to move. Research estimates that occupational licensing laws reduce workplace mobility by about 7 percent.
Ohio would not be going out on a limb with the new approach. In 2019, Arizona became the first state to implement universal recognition. Since that time, over 4,000 people have taken advantage and moved there. Many of them were in skilled trades, a need for Ohio. Iowa, Missouri, Mississippi, and Kansas have since opted for universal recognition. Several other states have taken baby steps, partially implementing the policy.
Iowa and Missouri now enjoy lower unemployment rates, partially because of the roadblocks removed by universal recognition. While it alone is not a magic bullet, it helps attract the type of workers Ohio businesses will need in order to keep rebuilding the post-pandemic economy and hire even more native Ohioans.
It would also build on already enacted licensing reforms like SB 255, passed in 2019, which established reviews of Ohio’s occupational licensing. In both cases, the goal is “right-sized” regulation which does not hold back prosperity for new or existing residents.
One way or another, Ohio needs to set out a big, bright welcome sign for skilled workers. Easing the employee shortage means a stronger labor market, a growing number of small businesses, and a healthier economy for everyone.
Conor Norris is a research analyst and Edward Timmons is director at the Knee Center for the Study of Occupational Regulation at West Virginia University. Timmons is also a senior affiliated scholar with the Mercatus Center at George Mason University.
If enacted, HB 203 would make Ohio honor occupational licenses granted by other states, in turn making it easier for skilled workers to move in. It would require professional licensing boards to issue licenses to already certified professionals who have practiced their trades elsewhere without disciplinary action.