There’s a Better Way to License Occupations—without Relying on the Government

November 15, 2018

Phoenix—Today, the government plays the role of granting occupational licenses to professionals, supposedly to protect consumers and ensure quality services. But as a new paper from the Goldwater Institute and the 1889 Institute shows, there’s a better, modern alternative to the government-run system that benefits consumers and professionals alike.

In their new report, A Win-Win for Consumers and Professionals Alike: An Alternative to Occupational Licensing, Byron Schlomach, director of the Oklahoma-based 1889 Institute, and the Goldwater Institute’s Christina Sandefur and Dr. Murray Feldstein explain that private certification would produce information benefits for consumers and service providers without the existing government monopoly on licensing.

“If you’ve ever used Yelp to find a good restaurant, or Angie’s List to find a good plumber, then you know how important it can be to get accurate information about sellers and products. Occupational licensing is supposed to provide that—a confirmation that the seller will provide a reliable product or service—but that often doesn’t happen without other costs, like reduced supply, higher prices, and compromised quality,” Schlomach said.

The paper proposes private certification as an alternate solution to government licensing. Private certification provides the best of all worlds: It protects consumers from fraud, encourages the creation of reliable sources of shorthand information to help both professionals and consumers, and it gives privately certified sellers the incentive to keep their quality high in order to keeps their certification credible.

A model bill included in the paper offers a voluntary system to complement the existing traditional occupational licensing process. It would allow private certifying organizations to register with the state, privately certify individuals to practice an occupation according to the organization’s practices, and employ modern technology, including consumer-rating systems using smartphone applications, to protect consumers. Such a system would create an element of competition, allowing certifying organizations to vie to provide the highest-quality credential. This private certification model is another proposal in the Institute’s package of reforms to move toward a permissionless society, including the Right to Earn a Living Act and the Permit Freedom Act.

Read the full paper here.

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About the Goldwater Institute

The Goldwater Institute drives results by working daily in courts, legislatures and communities to defend and strengthen the freedom guaranteed to all Americans in the constitutions of the United States and all 50 states. With the blessing of its namesake, the Goldwater Institute opened in 1988. Its early years focused on defending liberty in Barry Goldwater’s home state of Arizona. Today, the Goldwater Institute is a national leader for constitutionally limited government respected by the left and right for its adherence to principle and real-world impact. No less a liberal icon than the New York Times calls the Goldwater Institute a “watchdog for conservative ideals” that plays an “outsize role” in American political life.