Occupational Licensing

Arizona Could Become the First State to Recognize Occupational Licenses From Other States

Licensing laws tend to lock workers in place, but Gov. Doug Ducey says it's time to stop that foolishness.

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NICOLE NERI/REUTERS/Newscom

Someone who's trained as a nurse in California doesn't magically forget those skills when they cross the border into Arizona. The same is true for plumbers, electricians, makeup artists, and pretty much any person working in any other licensed profession—and Arizona might soon be the first state to stop pretending otherwise.

A bill introduced Monday in the Arizona General Assembly would allow anyone with an occupational license from a different state to automatically qualify for the same license in Arizona without having to retake classes and pass tests again—though they would have to pay a fee to the state board that administers the license, and would have to demonstrate that they were in good standing with the licensing authorities in their previous state. So-called "universal licensing recognition" would make it easier for licensed workers to move to Arizona and would do away with time-consuming and expensive requirements for license-holders who want to move across state lines.

In short, it makes a lot of sense. And it makes particular sense for Arizona, a growing state that expects to gain more than 100,000 residents this year.

"If you've been licensed to work in another state and want to move here, let it be known: Arizona will not stand in your way," Gov. Doug Ducey said during his State of the State address last week. Ducey, a Republican, called for the state legislature to pass the bill quickly. "As people move here, we want them to be able to work from day one," he said.

The bill will have its first hearing in front of the state House Regulatory Affairs Committee this afternoon.

Arizona already recognizes licenses from beyond its own borders for military families, and the new bill would extend that same privilege to other workers.

"This helps workers across the country who want to move to better their lives and helps Arizona businesses by allowing them to recruit licensed/certified workers nationwide," says Paul Avelar, an Arizona-based attorney with the Institute for Justice, which is advocating for the reform.

As it stands, most licenses aren't transferable between states, and research in recent years has shown a link between growing levels of occupational licensing—more than one-third of all jobs in the United States is now subject to some form of licensing, up from just one in 10 jobs in 1970—and a decline in workers' mobility.

Nationwide, workers whose jobs require a state-issued license lose out on between $178 million and $711 million they could have earned by moving to a different state, according to a 2017 paper by Janna Johnson and Morris Kleiner, a pair of labor economists at the University of Minnesota. Johnson and Kleiner examined 22 professions that are licensed across most states, and found that workers in those professions were, on average, 36 percent less likely to move across state lines than workers in non-licensed professions.

"For example, a licensed public schoolteacher with a decade of teaching experience in New Hampshire is not legally allowed to teach in an Illinois public school without completing significant new coursework and apprenticeships," they wrote. "The existence of such requirements could constitute a significant cost to migration across state lines for those in licensed occupations, and these costs could prevent individuals from moving if the costs of re-licensure had been lower."

Source: Is Occupational Licensing a Barrier to Interstate Migration? Janna E. Johnson, Morris M. Kleiner

In fact, the numbers are likely larger. As Johnson and Morris note, their research fails to capture the lost productivity and earnings for people who are forced out of the labor force entirely because they cannot (or choose not to) get re-licensed in a new state. If a wife moves to a new state for a better-paying job, for example, her husband who previously worked in a licensed profession might have to change careers entirely.

"For qualified professionals who move to our state looking to work, let's get government out of the way and let them get to work," says state Rep. Warren Petersen (R-Gilbert), the sponsor of the universal licensing bill.

Arizona's proposed reform is the most direct way to address this problem. It's also the latest salvo in an ongoing fight between Ducey and some of the state's licensing boards—which are often controlled by members of the very profession they are supposed to regulate and, unsurprisingly, have not taken kindly to Ducey's efforts to roll back onerous licensing laws.

The most heated battles have been between the governor and the state's cosmetology board, which for two years has been fighting a proposal to let people blow-dry hair without a license—something that could land you in jail for up to six months in Arizona. Ducey has called the board "a group of special interest bullies," but opposition from the board and licensed hair stylists killed an effort at repealing the blow-dry licensing requirements last year. A new blow-dry licensing reform bill passed a key state Senate committee last week.

The boards are likely to throw up opposition to Petersen's bill as well, since it would undercut their ability to require, for example, 1,000 hours of training before someone could be licensed to blow-dry hair. But recognizing out-of-state licenses will make Arizona an even more appealing destination for workers.

"Standing in their way of earning a living in Arizona? Our own licensing boards and their cronies, who tell them 'you can't work here; you haven't paid the piper,'" Ducey said last week. "Let's stop this foolishness."

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  1. Arizona: But you still have to have one. Hey, we’re Arizona, it’s not the Wild West out here!

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  2. I’m glad this fight is happening. It was getting pretty bloody in Arizona, but I think the trend is winning there. The willingness to have this fight is the first step towards winning it, and I’m glad AZ is doing something about it.

    Now the new Sheriff in Maricopa just needs to pull back on the abuses that became so common under Arpaio and the worst issues of the state will begin to heal.

    1. You should make that your platform next time you run for mayor of Phoenix.

    2. Still plenty of issues outside of Maricopa. Pima county board for example.

  3. I haven’t followed things closely since I moved, so I can only hope that this is indicative of Ducey’s work. The regulation in Arizona has slowly increased over the time I lived there, and working to claw it back would be the greatest guarantee for future, sustained growth.

    1. Certain cities are trying to undo the claw backs.

      1. Yes, well my beloved Tucson will continue to be run be incompetents. I just accept that at this point. We can keep blaming Phoenix though for our problems and that feels better than paving roads.

  4. A bill introduced Monday in the Arizona General Assembly would allow anyone with an occupational license from a different state to automatically qualify for the same license in Arizona without having to retake classes and pass tests again?though they would have to pay a fee to the state board that administers the license, and would have to demonstrate that they were in good standing with the licensing authorities in their previous state.

    So no change if you’re a P.E.

  5. I’d rather end most occupational licenses completely.

    1. What the hell do you mean “most”?

  6. This really is an excellent idea. A deregulation that actually works from the bottom-up rather than the usual trickle-down approach. And doable because it’s not trying to sell a hypothetical libertopia.

    1. It’s an obvious small step towards wider reform.

    2. A hypothetical libertopia is still far more peaceful and prosperous than authoritarian tyranny lite.

      1. Yes it is. In one’s dreams. Unfortunately, most people can’t spend their entire day asleep and dreaming of unicorns holding hands with rainbows.

        1. Just to give an example of the problems of trying to sell a hypothetical libertopia of ‘no licensing tomorrow’.

          1. You get all the existing resistance of licensing bureaucrats and license holders

          2. You become a beacon for every fraudster from other states – and uniquely for them – which then creates an additional group of people who will resist – eg you mean every doctor who lost their license for killing patients is gonna move here to practice medicine? How the hell are we supposed to know which doctors HAVE killed patients elsewhere? Or what ‘doctor’ even means now?

          3. Those who are already licensed elsewhere will avoid your state like the plague cuz they still have all the risks of setting up a biz in a new market.

          In exchange for an upside that can only be hypothetical until it actually happens – which only appeals to people who prefer abstraction rather than concreteness/pragmatism. Which is virtually nobody outside some sophomore bull session or Internet comment board.

          1. you mean every doctor who lost their license for killing patients is gonna move here to practice medicine? How the hell are we supposed to know which doctors HAVE killed patients elsewhere? Or what ‘doctor’ even means now?

            Are you saying only the government can perform quality control checks? Because there are lot’s of private certifying agencies for other things. If the government weren’t crowding them out they’d be prevalent in a lot more sectors – and then a doctor who came around without a cert or a cert from an agency with a bad reputation . . . would only get business from the terminally stupid.

            1. So you want to replace one type of licensing – with a different kind of certification – that will be pushed by precisely those who currently benefit from licensing – but that doesn’t exist now and there is no reason beyond theory to believe that it would pop up beyond the EXACT same mechanism (ie a new demand for the state to overturn the de-licensing and re-license) that has occurred virtually every time delicensing has been tried over the last 40 years.

              As documented empirically by BLS. And they also gather economic data for both certifications and licenses which indicates that both occur for the exact same reasons as the credentialism re degrees for the non self-employed – higher earnings and better chances of being employed. And explained as job market signalling by Michael Spence (for which he won a Nobel).

              1. The thing is that there can be private certification agencies and there will be if they are for-profit entities.

                Private certification exists in lots of different arenas, and getting your product or service certified is used as a marketing wedge if you can get the certification because it actually means something.

                If the government has any role in any of this it would be to generally indemnify reviewers and the sites they post on to make sure no certification agency can silence critical reviews.

                Government gatekeeping always gets used to drive up prices and reduce competition, which is absolutely the worst situation for consumers. It has little to nothing to do with quality, and there are countless examples to prove it. When the FDA fails, they blame it on underfunding and ask for more money – they are incented to fail.

                When a private certification agency fails, they go out of business. They are incented to get it right every single time.

            2. The issue with certifications isn’t the quality, but the enforcement ability. A private ratings agency can’t jail Kermit Gosnell. If you want the libertarian utopia of no licensing, then you have to win hearts and minds on the comfort debate. Most people, understandably so, like the fact that the government can bring the pain to someone who doesn’t do their job. They feel less comfortable with a private institution doing it. There’s no rational reason to be afraid (if anything, a private organization could enforce more strictly and efficiently if permitted by law to use ruthless tactics), but there’s nothing rational about fear. People trust the institution of government more to enforce such matters.

              1. Also, the thought of private enforcement for private certification invokes ancap memes and popular cultural ideas of private corporate armies murdering citizen debtors and the sort of fantasies you see in cyberpunk genres.

                1. “Also, the thought of private enforcement for private certification invokes ancap memes and popular cultural ideas of private corporate armies murdering citizen debtors and the sort of fantasies you see in cyberpunk genres.”

                  A perfect example of the stupid society you’re so intent on continuing. People who get their knowledge from distopian movies and tv shows and not reality.

              2. No one has to jail anyone, necessarily. But, yeah… people doing illegal shit would be jailed. What do you want to jail people for, not knowing things? The consumer is perfectly capable of deciding who is fit and who is not. It’s been going on since forever, regardless of licensing that keeps people poor.

                “Most people, understandably so, like the fact that the government can bring the pain to someone who doesn’t do their job.”

                It’s not “understandable.” It’s stupid. What you’re talking about is people who don’t want to bother having to know anything. In other words, a society of diaper wearing thumb-suckers who’ve outsourced their ability to reason to some fat bureaucrat who doesn’t have their best interest in mind. God, you people will rationalize anything.

        2. Speak for yourself. Some people are out there attempting to change things. But it is true, government cock-suckers like yourself always find it easier to give in and take it down their throats than to fight back.

  7. I could be completely wrong, but shouldn’t ensuring commercial licenses are transferable between the states be one of the few actual authorities/mandates given to congress under the commerce clause?

    1. You’d think reciprocity would be controlling here. If I sign a contract in Michigan – Arizona will enforce it. If I get a driver’s license in Maine – Arizona will honor it. If I graduate from High School in Maryland, Arizona accepts it. All those states have differing standards but they all accept the certs from other states. Never understood why some licensing is accepted and others not.

    2. Yup. If ANYTHING is covered by the commerce clause, this is the exact kind of thing it should apply to. Shows you just how retarded things have become when 80% of what the government does is clearly detached from a reasonable reading of the constitution, and one of the things that seems fairly reasonably covered is completely ignored!

  8. The good news: it makes it easy to move here.

    The bad news: it makes it easy to move here.

  9. No, because you shouldn’t have to get a license from anybody. The commerce clause is as follows:

    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

    This doesn’t mean the federal government can stop you from doing business with someone just because you don’t have a commercial license. Yet this is exactly what happens. I live in Virginia and it is illegal to charge someone money for giving them a haircut without an official license which requires countless hours of unpaid haircutting practice as well as barber education.
    The commerce clause does not grant Congress the authority to restrain my ability to freely do business with a client who wishes to pay for my service.

    1. From my understanding, Congress was granted the authority to “regulate” interstate commerce or “to make regular” in order to keep the states from taxing each other for commercial interactions. The commerce clause was not meant to grant congress authority to restrain you, but to restrain the states from inhibiting competition between each other.
      ex: If I am a licensed architect in GA, but not in AZ, and a client in AZ likes my designs, then the commerce clause should protect me and the client from being interfered with by AZ, which wants to limit competition from out of state for the purposes of inflating prices, license fees, and tax.
      So the very purpose of the commerce clause is ignored, and is instead used for federal control of practically everything else in our lives including intrastate commerce.

  10. I wonder how CDLs transfer across state lines. I could probably stand to live in AZ instead of NM.

  11. “If you’ve been licensed to work in another state and want to move here, let it be known: Arizona will not stand in your way,”

    Except California. If you’ve ever held an occupational license in CA you are barred from ever having one in AZ. Look, we can’t afford you people coming over here and driving down the incomes of locals while changing our culture.

    1. Build the Wall.

      At the Colorado River.

  12. As a real estate agent in Arizona I dislike the proposal unless some exceptions are created. There are some key differences in how properties are handled in different states. That’s not to say that the process couldn’t be simplified – I don’t think that out of state licensees transferring to Arizona should have to take all of the courses as new licensees, but they do need some classes so that they are more familiar with how things are done in Arizona.

    1. “But I’m special…” he whines.
      A successful real estate agent will do that, others not so keen on being professionally competent will not and will be sued or receive one star ratings on social media sites.

      It is not brain surgery, its real estate.

      And if Arizona has real estate laws quite different from other states, perhaps it should review those laws too, as to what commercial self interests have created those differences.
      Arizona seems on the right track to reduce barriers to growth and commerce.

      1. Yup. Everybody likes to make it out like what they do is life and death or something… But it’s not.

        IMO doctors are one of the only groups where it is even remotely reasonable to require licenses of any sort. And even then it has gotten to the point of being stunningly excessive in practice.

        I work in an industry where my knowledge is above and beyond what almost any licensed person in other industries needs to know in terms of “ins and outs,” yet we have no rules in my industry. It works fine.

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  14. Glad to read th AZ is moving this way. It’s what I expect from usually libertarian AZ. Though they did just declare Porn a health crisis. Lol, not making that up. In any case, lots of great discussion about the need for licenses at all. Not a simple issue. I like the idealists who think that licensing is unnecessary, but this world is full of frauds and cheats, and without some controls, the system would go to hell. However, these controls often become onerous and exist to protect the jobs of those who are “certified”.

    1. As I said above: Having basic standards for doctors? Maybe that’s okay. Licensing people to blow dry hair? Not so much.

      As with most regulatory schemes if SANE people were making the rules, most of it wouldn’t be the worst thing ever… Hence moving towards that is the way to go. If we get it to the point of being able to drown the government in the bathtub so to speak, then we should probably do it at that point. But any slow, steady progress the right direction is fine.

  15. Licensing requirements are to the economy what sand granules are to a finely-tuned engine.

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