The Institute for Justice (IJ) finds that “occupational licenses” — essentially permission slips from the government to work in a particular field — have proliferated under modern state governments. In the 1950s, IJ writes, only 1 in 20 workers needed to be licensed, but today, almost 1 in 3 face some kind of licensing requirement. Further, they explain that these regulations have a detrimental impact on those seeking work or looking to open their own business:
In documenting the license requirements for 102 occupations nationwide, this report finds that these laws can pose substantial barriers for those seeking work, particularly those most likely to aspire to these occupations—minorities, those of lesser means and those with less education. Moreover, about half the occupations studied offer the possibility of entrepreneurship, suggesting that these laws hinder both job attainment and creation.
Some key findings of IJ’s study reveal that workers in the occupations they examined on average must spend $209 in fees, take one exam, and take nine months of education and training. Interior designing is the most difficult occupation to enter (though it is only licensed in three states and the District of Columbia), while cosmetology trades, truck and bus drivers, and pest control workers face the most stringent licensing requirements. And strangely, the licensing requirements don’t necessarily correlate with the need to protect the public from harm — for example, the average cosmetologist spends 372 days in training while the average emergency medical technician only needs 33 days of training.
That means that for people seeking work in “below average” income occupations, they have to spend months out of the workforce in order to be able to get back into the workforce. If they can’t afford to spend the time getting licensed, they don’t have the opportunity to get those jobs. In other words, the government is keeping them from climbing the economic ladder.
Which states are some of the worst offenders? Louisiana licenses 71 out of the 102 occupations studied, followed by Arizona (64), California (62) and Oregon (59). As for which state imposes the highest burdens, Hawaii is the worst, requiring an average of $360 in fees, 724 days in education and experience and two exams, as well as grade and age requirements for the 43 occupations it licenses. Arkansas, Nevada, Florida and Arizona are also high on the list. IJ says that the discrepancy in licensing requirements across state lines suggests that some of the standards are disproportionate to the need and cause unnecessary hardship on workers.
That’s particularly troublesome given the state of the U.S. economy. Heritage’s Rea Hederman, Jr. and James Sherk report that in April, 342,000 unemployed workers gave up looking for jobs and left the labor force, bringing the labor force participation rate to a 30-year low. Workers are discouraged, and Americans should be free to pursue employment without unnecessary licensing requirements from state governments. As Lisa Knepper of the Institute for Justice explains, “Unnecessary and needlessly high licensing hurdles don’t protect public health and safety—they protect those who already have licenses from competition, keeping newcomers out and prices high.”
One of the more absurd examples of protectionist licensing requirements comes from Louisiana — the only state to license florists. In defense of the requirements, the head of the state horticulture commission argued: “If [aspiring florists] can’t take the instruction and pass the exam, how can they do an arrangement that you and I want to buy?” That’s government, for you — hard at work protecting you from poorly arranged bouquets.
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Source material can be found at this site.