Occupational Licensing

Arizona Will Be First State to Recognize Out-of-State Occupational Licenses

"Arizonans who have recently moved here will be able to put their skills to work faster and without all the red tape," says Gov. Doug Ducey.

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NICOLE NERI/REUTERS/Newscom

Arizona is one signature away from becoming the first state in the country to recognize out-of-state occupational licenses. That means licensed workers will be able to move to Arizona and immediately find work without going through the expensive, time-consuming, and redundant process of getting re-licensed.

That's a big deal.

The state House and state Senate voted this week to pass a bill recognizing out-of-state licenses. Gov. Doug Ducey, a Republican, has championed the legislation throughout the process and is expected to sign it sometime next week.

"We've heard too many stories of licensed, experienced professionals denied the opportunity to work upon moving to Arizona," Ducey tells Reason. "With this first-in-the-nation reform, Arizonans who have recently moved here will be able to put their skills to work faster and without all the red tape."

The bill's passage is the culmination of a fight between reformers and Arizona's licensing boards. Ducey used his State of the State Address in 2017 to call licensing boards "a group of special interest bullies." He's saved his sharpest barbs for the Arizona State Board of Cosmetology, which has investigated students for giving free haircuts to the homeless and defended a rule requiring 1,000 hours of training before letting someone blow-dry hair for money. The board, Ducey said in 2017, "is going after people who simply want to make a living blow-drying hair. No scissors involved."

The bill that passed this week won't stop Arizona's boards from setting ridiculous requirements for would-be license-holders, but it will create some substantial incentives for the boards to behave differently. By allowing licenses issued in other states to be valid in Arizona, the state's homegrown regulators will now have a reason to match their requirements to what other states do.

This is also a model for other states to follow. Most licenses aren't transferable between states, and research in recent years has shown a link between growing levels of occupational licensing—more than a third of all jobs in the United States are now subject to some form of licensing, up from just one in 10 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 they 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 write. "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."

If other states follow Arizona's example, workers will benefit from increased economic opportunity and licensed professionals will lose their ability to act like "special interest bullies" by fencing out competition. And with more trained professionals ready to provide those services, consumers will win too.

Someone trained as a nurse in California doesn't forget those skills when he crosses the state border. The same is true for plumbers, electricians, makeup artists, and pretty much any person working in any other licensed profession. Arizona is the first state to stop pretending otherwise.

ReasonTV interviewed Gov. Ducey last month to discuss the bill:

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50 responses to “Arizona Will Be First State to Recognize Out-of-State Occupational Licenses

  1. …the state’s homegrown regulators will now have a reason to match their requirements to what other states do.

    Not so sure they’ll see it that way.

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  2. “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.”

    Of course, one could raise similar concerns about, say, differences in sales taxes. Perhaps the rate should be the same throughout the country.

    1. They’re not even close to similar concerns. One prevents work, full stop. The other just changes a tax rate, and even if the old state had no sales tax, it’s still not a work blocker.

    2. Yeah, screw federalism!

    3. Perhaps it should. But, just like here, no one is forcing it. They’re just making it easier to homogenize to the best rate.

  3. >>>more than a third of all jobs in the United States are now subject to some form of licensing

    Leviathan.

  4. This is really stupid and short-sighted on the part of Arizona. Removing barriers to entry is simply going to encourage a flood of immigrants coming across the border looking for work and driving down wages for everybody competing for jobs. Doesn’t Arizona have a duty to protect the interests of their own native citizens first and foremost rather than concerning themselves with the well-being of non-citizens? Rather than encouraging immigration, Arizona should be building a big, beautiful wall of regulation to keep these invaders out. Make Arizona Great Again!

    1. “Arizona should be building a big, beautiful wall…”

      AND they should force the non-Arizonans to PAY for it!!! (I’s just basic fairness).

    2. I know – people should just be modifying their own home electrical systems rather than hire some inexpensive person to do it for them. Stop being lazy and clean your own homewire in that outlet extension.

  5. Hola, se?or. Here is my occupational license from the great state of Sonora.

    1. Living in Arizona, I prefer Sonorans over Californians

      1. I second this.

  6. Good job Arizona.

  7. I’m surprised that the states haven’t developed a system of reciprocity for occupational licenses. I’m sure I’m missing the part where local trade unions and commissions lobby against this so as to keep their own gravy train running.

    1. I thought the constitution said they had to.

      1. There is some reciprocity between some states. It varies a lot.

      2. If a person has a license to do (whatever) in, say, New Mexico, issued by New Mexico, that means that New Mexico says it’s ok for that person to do (whatever) in New Mexico. So, Arizona honors that license by saying “hey, it’s also OK with us if you do (whatever) in New Mexico”.

      3. For same sex marriage licenses, yes.
        For jobs, or constitutional rights, no.

  8. I like the reform and think less licensing is a good thing, but the headline is misleading. Many states already allow reciprocity with little more than paperwork and/or a simple test or just a between state agreement. A master electrician can work in Texas or Lousiana with interstate reciprocity. There are many other examples of this. Arizona may be the first to recognize all of them in one bill, but it isn’t the first to ever do it.

  9. The article infers that nurses are covered in this legislation. Does this apply to doctors as well? Depending on the state, a medical doctor may have to pay thousands of dollars just to get a work permit and the ability to prescribe medicine, while other states charge far less. A little reciprocity in this one area could really bring medical costs down.

    1. AZ is part of a compact with 17 other states for doctors. It is not reciprocity but speeds up the process if you have a license in one of those states and are applying for AZ license. You would still pay all the fees and be subject to Arizona rules.

  10. Thousands will be killed by unsterilized combs and clashing draper colors.

  11. Not sure that more deeply entrenching the licensing cartel is a win.

  12. Now, are the trade-war defenders going to pan this? Because now its easier than ever to outsource your contracting and Arizona contractors will lose money to cheaper foreign imports.

  13. Great. First you endorse any marriage license that comes down the pike, now you are all in on occupational licenses. What distinguishes y’all from Worker’s World again?

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  16. “Arizona Will Be First State to Recognize Out-of-State Occupational Licenses”

    Until you remember that law license reciprocity has been around for more than a couple of days.

  17. It’s also not clear that all licenses are directly interchangeable. Constructions methods appropriate for Arizona might not be appropriate for Alaska, and vice versa. I was involved in a case in Oregon concerning the application of adobe facings to properties in Oregon, and every expert started off by saying that adobe isn’t a very good construction method for Multnomah County, Oregon. (The case was a construction-defect case in which the plaintiff suffered extensive water-intrusion, allegedly because of faulty installation by the adobe contractor defendant, who was allegedly negligently managed by third-party general contractor.)

    1. It isn’t at all clear that licensing prevents this kind of abuse from happening, whether or not the licensee has been licensed locally.

      Indeed, the example you gave is an example where licensing didn’t prevent something awful from happening. I would go so far as to propose that the plaintiff suing the defendant in this case is doing far more to prevent such shenanigans from happening than any sort of licensing scheme.

      It’s up to the person building the building to make sure that it is appropriate for the area; it is the responsibility of the contractor building something to make sure that the construction is appropriate for the area — and to do the right thing, even if the local building codes aren’t what they should be.

      1. “Indeed, the example you gave is an example where licensing didn’t prevent something awful from happening.”

        In the sense that licensing wasn’t involved at all?

        “It’s up to the person building the building to make sure that it is appropriate for the area”

        The specific neighborhood in question is all adobe-faced homes, and fairly expensive ones at that.

        ” it is the responsibility of the contractor building something to make sure that the construction is appropriate for the area”

        It’s the responsibility of the contractor building something to build what the customer is paying for. The general contractor had no experience with adobe, so they neither hired nor supervised the contractor who installed the adobe facings.

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  19. A very good thing it is.

  20. I’m no fan of Republicans, but no way a Democrat would have the guts or brains to even consider something like this.

    1. This is a halfway measure. Going full out would be to just repeal the majority of licensing laws, and let the customers decide if their cosmetologist knows how to make them look beautiful, if their electrician knows how to avoid burning down their homes and businesses, and if their doctors are selling snake-oils, whether their stockbrokers are serving their financial needs, and so on and so on and so on. The D’s won’t do that because they want to protect the public from having their choice of service provider, and the R’s won’t do that because they want to protect the established professionals from unlimited competition (especially from ((EEK!!!)) recent immigrants.)

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