Is Occupational Licensing Slowing Job Creation?
Many professions require obtaining a license – called an occupational license.
In some states, more than 70 professions require an occupational license. Some of that makes sense – you would want your pilot, doctor or lawyer to be licensed.
But according to the Freedom Partners Chamber of Commerce, the percentage of jobs that require licensing at the state level has quintupled since the 1950s - rising from 5 percent to at least 25 percent. When you add in local licensing requirements, more than 1,000 professions are now affected – mostly in the low and middle income categories.
Andy Koenig is a senior policy adviser at the Freedom Partners Chamber of Commerce.
He recently wrote an article for Politico titled "It takes 890 days to become a barber in Nevada," which highlights the problem.
According to Koenig, it takes 2,000 days of training to be an interior designer, travel guides require 733 days, cosmetologists take 420 days and a shampoo technologist needs 50 hours of online courses.
“We’ve seen a large expansion of the jobs that require state permission from the government to compete in those fields,” he said.
Koenig said many licensing requirements grew out of health and safety concerns but he believes licensing has taken on a new agenda.
“I think politicians are working with local businesses with people who are already in these industries and don’t want to have competition,” he said, “What I think is being done for the most part are that these are being applied to jobs in areas where people don’t want to face competition using the guise of public safety as the way to justify it.”
Plus, the licensing requirements are hurting people who may not have the money for the licensing fees, which can be hundreds of dollars depending on what the profession is.
“I think there are aspects of governments that see this as a revenue creator,” he said.
Koenig said another problem is the lack of oversight. There is not one state agency looking at all of the licensing. Many people, even in government, don't realize there are overlapping requirements, fees and standards.
“They are haphazardly put together," he said, "They often overlap and the create a huge barrier for people trying to get jobs.”
He said states need to look at the "entire library of occupational licensing and getting rid of the ones that don’t make sense anymore.”
He believes state and local governments can do a lot to remove the obstacles to success.
“It’s an easy way to help people try to achieve the American Dream is to remove these barriers that stand in their way,” he said.
Andy Koenig, senior policy adviser, Freedom Partners Chamber of Commerce