Do Occupational Licenses Really Protect Anyone?

by Jennifer Tiedemann
October 25, 2018

Supporters of occupational licensing requirements say that such licenses are needed to protect the health, safety, and welfare of the public. But many of these licensing requirements have less to do with protecting the public and more with protecting the turf of those already working in a profession.

In a new Cato Institute policy report, economist Angela Erickson lays out the explosion of occupational licensing requirements over the last 70 years: “In the 1950s, 1 in 20 workers needed government permission in the form of a license to work. Today licensing has ballooned to ensnare 1 in 4 workers,” with most of that expansion coming from the licensing of previously unlicensed occupations and a bigger scope for existing licenses. Licensing to work in a specific field covers more professions—and more aspects of those professions—than ever before. And the burdens posed by occupational licensing can be extremely dislocating and, frankly, unbelievable: Those seeking licenses often face hundreds of hours of training and thousands of dollars in total costs (you can read some of their stories in Goldwater Institute National Investigative Journalist Mark Flatten’s paper on occupational licensing here).

Goldwater Institute Director of National Litigation Jon Riches wrote in a Pelican Institute report earlier this year that fewer than 30 occupations are licensed in all 50 states and in fact, more than half of all state-licensed occupations are licensed in just a single state. Louisiana, for example, is the only state that requires florists to obtain a license. It’s hard to see how licensing a florist is really necessary to protect the public—and 49 states seems to agree with that assessment.

Licenses to practice a particular occupation ought to exist when that occupation could affect public health or safety. Few would disagree, for example, that doctors ought to be licensed in order to care for patients. But requiring florists or hair braiders to obtain licenses not only has nothing to do with public health or safety; it also forces these professionals to expend unnecessary money and time in order to pursue the career of their choice. By making it more difficult for “outsiders” to enter a profession, occupational licenses protect those who are already licensed while hurting new entrants who just want to make a living.

The Goldwater Institute drafted the Right to Earn a Living Act to put the burden to demonstrate the need for public health, safety, or welfare on the government, requiring evidence that any new license provides this protection. Additionally, it allows any person harmed by a licensing regulation to ask the relevant regulatory agency to repeal or modify the requirement—and then challenge the restriction in court if the agency doesn’t change it. The Right to Earn a Living Act became law in Arizona in 2017, providing a good model for other states to follow.

The Right to Earn a Living Act is already yielding benefits for workers throughout Arizona. Behavioral health counselor Annette Stanley sought an Arizona license when she moved there from Kansas in 2014, but because Stanley had owned her own practice, the state of Arizona would not recognize hours accumulated for her Kansas license. Thanks to the Right to Earn a Living Act, Stanley was able to ask the state Board of Behavioral Health Examiners to review the regulations keeping her from getting her Arizona license, and last November, the Board granted her petition to allow her to practice in Arizona and also resolved to modify the rule that kept her from practicing.

Erecting unneeded barriers to entry into hundreds of professions is bad news for countless employees. But fortunately, states are starting to take steps to lower these barriers and make it easier for people to pursue the profession of their choice—not to mention the American Dream.

Jennifer Tiedemann is the Deputy Director of Communications at the Goldwater Institute.