Occupational Licensing

Occupational Licensing Stops Workers From Moving Across State Lines. Andrew Yang Wants To Fix That.

The Democratic presidential candidate is the latest example that occupational licensing is truly a bipartisan battle.

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Bipartisanship may seem to be going out of style. But at least one issue continues to unite Republicans and Democrats: licensing reform. Democratic presidential candidate and venture capitalist Andrew Yang—who is running on a platform centered around a Universal Basic Income—has just released his plan to chip away at licensing requirements in an attempt to "get America moving again."

Mobility is an important source of economic dynamism, yet it is hampered in many parts of the country by onerous regulations. According to Garrett Watson, Special Projects Manager at the Tax Foundation, 22.2 percent of Americans moved in 1948. That fell to an all-time low in 2015-2016, when just 11.2 percent packed their bags for greener pastures.

Yang's plan endeavors to change that by helping lower-income individuals move to areas with better job prospects. Most notably, his proposal seeks to increase state-by-state recognition of occupational licenses, a practice that only three states—Arizona, Montana, and Pennsylvania—have adopted so far.

Licensing requirements often trap workers in the states in which they began their careers. Why? Because those licenses are not recognized out-of-state. If such workers want to relocate to a new state, and stay in the same profession, they will have to start the costly and burdensome licensing process all over again.

More than 33 percent of professions in the U.S. now require a license. "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," wrote Reason's Eric Boehm in April. "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."

Yang also proposes a tax credit—capped at $1,000—for moving expenses. The tax code previously provided for an above-the-line deduction for similar claims, although that provision was eliminated by the Tax Cuts and Jobs Act of 2017.

Watson of the Tax Foundation says that Yang's proposed tax credit for moving expenses may well help energize the economy. But he cautions that it would need to be part of much bigger reforms.

"This would have to be one prong of many that would have to be advance to make a dent in things," Watson says. "Other items—reducing licensing burdens, reducing zoning laws that drive up the cost of housing—all these other non-tax issues would have to be part of a robust plan to move the needle here."

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  1. Licensing reform is low-hanging fruit. I don’t understand why it doesn’t receive more bi-partisan momentum.

    Reimbursing moving expenses doesn’t seem that bad an idea if, if-if-if, it were to supplant current public assistance programs. Currently, we (government) pay people to stay put in areas where employment opportunities are sparse, thereby providing a barrier/disincentive to self-sufficiency. Tax dollars might be better spent paying those people to move to an area with high labor-demand.

    However, like most government programs, I doubt it would replace any current schemes, and we’d just see one more safety net piled on top of the current tangled web of social assistance.

    1. we (government) pay people to stay put in areas where employment opportunities are sparse, thereby providing a barrier/disincentive to self-sufficiency.

      This in my opinion is a more likely culprit to population stagnation.

      1. Do elaborate. I never really considered that it would have any significant effect on fertility rate. Although I know a lot of folks are convinced it increases births “when single mothers are paid to pop out kids.”

    2. Licensing reform is low-hanging fruit.

      Way back when I mentioned on some message board about how there needs to be reform in occupational licensing and zoning. I said something to the effect that it would be a huge boon to the poor in “blighted” neighborhoods if they could start businesses out of their homes or in some other way that’s restricted by local laws. I got dogpiled hard. It sounded do ridiculous to these fools that it obviously wouldn’t do shit to help the poor and obviously the best way to help them is just give them free shit. Duh, then they spend the money and help the economy! Why didn’t you think of that, huh? Pshh, abolish zoning laws to help the poor! What a dummy! So, anyway, I don’t think that fruit is hanging as low as you might think.

      1. I said something to the effect that it would be a huge boon to the poor in “blighted” neighborhoods if they could start businesses out of their homes or in some other way that’s restricted by local laws.

        That goes to permitting and other forms of licensing as well. I suppose when I think of “occupational licensing” I’m thinking of like “licensed barber” etc.

        But yeah, it’s huge in the regards to all the regulatory hurdles to someone who wants to set up a damned face-painting booth at a county fair.

      2. No, I know what you mean. The only other website I comment on is a K-State fan site. I make it a point to refrain from talking politics at all there on a sports forum. However, even when I mention something as seemingly innocuous as ‘the campus-wide outdoor smoking ban is stupid and unnecessary,’ I get clobbered by people for not supporting a ‘societal good.’

        Authoritarian and collectivist inclinations are very prevalent in the majority of the general population.

    3. We don’t need to provide a subsidy – as you point out, we subsidize people staying in place so we need to *remove* that subsidy instead of providing a counter-subsidy.

      If people in low-opportunity areas couldn’t live comfortably on public assistance, they’d move. Its not hard, pack a bag, get on a bus. Especially nowadays when you can connect with short term rentals through Craigslist, Facebook, etc.

      1. Oh, I agree completely. I’m just saying that it might be a better, possibly less market-distorting use of confiscated money. But only as a replacement, not an addition (which it would inevitably be).

    4. Love Andrew Yang!!!!!!

  2. Typical statist linse-rather-repeat cycle. Pass stupid legislation. Problems arise. Pass new stupid legislation to get around old stupid legislation. On and on and on ….

    So much fine tuning to simulate markets because markets themselves are evil.

    1. Typical statist linse-rather-repeat cycle

      Racist.

      1. Eh. It was a poor pun with “license”.

  3. What about reciprocity. You can earn a professional engineers license in one state and applying in different states is just filling out the forms and getting references and maybe fingerprinted. Oh I am not saying it is ideal or libertarian but it is hardly difficult once you earn it in one state. All states have comity through NCEES. Admittedly it would be better to earn the license once and it applies all over but realistically states are sovereign jurisdictions still even if the feds hate to acknowledge it.

    1. Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

      I don’t understand why some things (driver’s/marriage licenses) are given full faith and credit, but not others (gun/occupational licenses).

      1. It’s my understanding that states honor driver and marriage licenses because they have signed inter-state compacts. But I don’t know any details and have no citations.

  4. Licensing is unconstitutional, pure and simple. There is no reason ANYONE should be require to get a license to do something that is otherwise a legal activity.

    1. It’s not otherwise legal. There’s your bullshit lawyer answer.

  5. “The Democratic presidential candidate is the latest example that occupational licensing is truly a bipartisan battle.”

    Both sides!

    You mean the “Democrat” who had his mic turned off at the debate?

  6. Andrew Yang is correct to suggest removing occupational licensing rules. He’s also correct that people moving for a job is at a national, all-time low. However, I’m not sure how much #1 is really affecting #B.

    It might be a lot (I have doubts), it might be a little, it might be not at all.

    BTW I like Yang, but he’s wrong on Universal Basic Income, which even I flirted with for a while.

    1. Yeah, lack of migration just might mean good job stability. People tend to move more when they’re looking for work.

      1. To be sure fair, Andrew Yang is running for president, so he has to throw concrete plans out. I get that. It’s a lot easier to sit on the sidelines on a comment board or even writing for a publication and point out problems, but when you run for office, you have to put a plan on the table.

        I think Yang is a cool guy in many regards, and that right there is why he’s 10,000 miles from the Democratic nomination.

        1. so he has to throw concrete plans out.

          No, he doesn’t. In fact, how many Presidential candidates in your lifetime made it into office after offering concrete plans. Concrete plans means numbers. Numbers means your opponents can find either some unpalatable group that your plan will benefit or some favored group that your plan might ‘harm’. No one serious about higher political office offers concrete plans.

          And Yang isn’t offering a concrete plan. His shit is in the same vein as ‘I’ll build a wall and Mexico will pay for it’. Or ‘You can keep your doctor’.

  7. Good for Yang.

  8. As a person who had a state license but a national certification, the license was not transferrable across state lines, and my license was medical not a plumber. The reason is that states have different requirements for certification/licensure is some states have their own testing, other states depend on testing/certification from a national organization. To make any certification/licensure reciprocal would be trampling on states rights, simple. Hospitals, in my case, also have individual requirements for employment separate from what state requirements are. Then there are the states that do not require for me to have a license, but certification. You see, this is a complex issue. Ying Yang has no clue what he’s talking about.

    1. It’s only complex because of government. It’s not inherently complex.

    2. You could make the argument that states should not recognize driver’s licenses and marriages from other states then.

    3. I am medical as well and work over multiple states.

      So in medicine there are two forces happening. One is the need for locums, temp positions. Those can be in all all fields, we need a nurse practitioner or RN in Arizona, a surgical tech in Washington, an ER doc in Ohio, whatever for a period of time.

      The other is telemedicine. It is a game changer. Your doc or other practitioner can often be anywhere in real time and practice in multiple areas, dermatology, psychiatry, primary care, radiology, pathology, other things.

      So what is happening few people know. To get those positions filled and pushed through the system you need to have other professionals who know how to deal with the state. Agencies and medical groups have whole staffs. They are paid and the states are paid just to get one or two licenses. Add that up. It can take up to a year.

      What people want is lower cost easier access to high quality medical care. They can get that by reforming the current legal licensing system. The technology is already there.

  9. Most notably, his proposal seeks to increase state-by-state recognition of occupational licenses . . .

    No thank you.

    Not that there shouldn’t be reciprocity. But it doesn’t need to come from the Federal government forcing it. All that will do is lead to the Federal government next wanting to ‘harmonize’ liceinsing between states – to assuage the fears of those who think low-regulation license states will allow a flood of ‘unqualified’ workers into their state (and if you think that’s ridiculous – people in Oregon seriously think gas station attendants are a safety issue).

    States – fairly high freedom states – will naturally, as they already are, move towards reciprocity. No need for a push from the Federal government. Low-freedom states – well there’s nothing you can do with them anyway.

    Because you know how it is. Once the Federal government does you a favor you’re in its pocket. And once you’re in his pocket you’re never getting out.

    1. Do not agree.

      What is a high freedom state. Give me an example.

      State governments sometimes make reciprocity agreements with others but those have nothing to do with freedom. They are purely driven by politics and cronyism.

      This is the system we have in license and it is out of control. I actually deal with this and navigate as best I can.

      1. Forced Federal reciprocity doesn’t get the system under control. It would just be the first step to moving the licensing completely to Federal control.

        1. You could create a uniform national license for certain occupations which the individual states could choose not to accept.

          I am less concerned with the role of the feds than I am with the outdated system we have now. It impedes the rights of qualified individuals to work across state lines which is happening more as technology advances.

  10. Commentator Victor Gusev gave a forecast for the match “Real” – “Arsenal” in the framework of the International Champions Cup.

    Real Madrid:A forecast of Viktor Gusev for a friendly meeting

    “In this International Champions Cup, which has been held for seven years now, there has never been such a thing for a team to win all three matches.

    By the way, last year Tottenham won. And now Arsenal is very close to success because Arsenal has won two games. And now he needs another victory, and then Arsenal almost guarantees itself the first place and this rather prestigious trophy.

  11. I heard part of an interview with Yang, not knowing who was being interviewed. I came in when he was answering some question about avoiding overseas wars, and I was agreeing with him. Then he answered some question about tax policy, and he went off the deep end.

    The man actually thinks that high taxes should be imposed upon Amazon and the money raised could then be given in the form of about a $10,000 yearly check to every American. I was laughing and rolling my eyes so much, it hurt. The amazing thing is that this is the most intelligent of the current candidates. Can you imagine what the dumbest ones must be saying?

  12. A democrat that wants to “fix” occupational licensing?
    I’ll translate.
    It means he wants more money for fees and permits across state lines for said occupational licenses.

  13. yawn….federalism….move on

  14. […] More than 33 percent of professions in the U.S. now require a license. “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,” wrote Reason‘s Eric Boehm in April. “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.” Read More > at Reason […]

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