Occupational Licensing

Small Cracks in the Restrictive Wall of Occupational Licensing Across the Nation

With depressing job reports, why not eliminate more laws that keep people from doing jobs they want to do and people want to pay them to do?


The Biden administration has been shaken by an unexpectedly (to it) terrible April jobs report featuring 6.1 percent unemployment and only 266,000 new jobs last month. Those worried about the implications of a nation not going back to work should make it a higher priority to loosen occupational licensing laws that literally and intentionally prevent many Americans from being legally able to perform certain jobs even if they are yearning to do so.

"Over the last 60 years, the number of jobs requiring an occupational license, or government approval to practice a profession, has grown from about 1 in 20 to nearly 1 in 4," noted the Council of State Governments in a 2020 report on the practice, in which it summed up some positive trends toward making it easier for Americans to practice professions helping other Americans. The Obama administration recognized back in a 2015 report that "the current
licensing regime in the United States…creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines. Too often, policymakers do not carefully weigh these costs and benefits."

Politically, it seems more attractive to aim occupational licensing reform on certain specific constituencies: for instance, military members and their spouses, and former prisoners. For an example of the former, Kansas last month passed a law expediting the processing of occupational licenses for military members and their spouses, from 60 days to 15.

The state of Pennsylvania recently surveyed military members and families about the extent to which its occupational licensing laws make their lives harder, and found that the state's "licensing requirements—which typically include a combination of education, examinations, and work experience," led the polled military members to complain that "translating military credentials and work experience to satisfy state occupational license requirements poses a significant barrier to veterans" and that "'acceptance of military training, education and experience' and license fee waivers would be most beneficial to veterans and military spouses applying for occupational licenses."

What's good for military members and spouses would be good for all citizens.

Other specialized occupational barriers are falling here and there for certain types of people. Washington state this month passed a law that, as reported by local news station KIRO-7, "reduces the barriers for licenses for jobs like cosmetologist, manicurist, tattoo artist, real estate brokers and funeral directors. Now there are no automatic rejections based on criminal history."

Mississippi last month sanely passed a law "that will allow individuals to provide eyebrow threading, applying makeup, and applying for eyelash extensions without having to obtain state licensing," as local TV station WLBT-3 has reported. (Reason's Eric Boehm has been reporting on the long road to this outcome since 2017.)

Cato Institute legal scholar Ilya Shapiro explains the role of litigation in getting to that outcome, pointing out that eye-threading licensure in particular has been successfully challenged in various court cases, and that Mississippi wisely "decided to amend its law rather than continue defending it in court." This offers lessons about the "usefulness of litigation in forcing states to repeal absurd laws," Shapiro notes. "It's one thing for a legislature to hastily pass some arbitrary barrier to entry that was cooked up by existing businesses on a state licensing board. It's another for that same group of industry players to decide whether it really wants to spend time and attorneys' fees defending rules that don't pass the constitutional smell test."

In another more widespread positive move, Florida's House of Representatives last week passed an occupational licensing reform bill that, as Paul J. Larkin has detailed at the Heritage Foundation, "frees a host of laborers to pursue what would ordinarily be deemed 'handyman jobs' without first satisfying local licensing requirements in every county where they might find work. [Occupations thus freed include] painting; flooring; cabinetry; interior remodeling; driveway installation; decorative stone, tile, marble, granite, or terrazzo installation; plastering; stuccoing; caulking; canvas awning and ornamental-iron installation, as well as a category helpfully described as 'handyman services.'"

Other positive developments in effect or on the horizon include Oklahoma passing the Universal Licensing Recognition Act, which will speed up the process for and eliminate certain requirements on those who received occupational licenses in other states seeking to be similarly licensed in Oklahoma; South Carolina's Senate contemplating allowing currently barred DACA immigrants to even get a chance to take certain occupational licensing exams; and North Carolina weighing bills in its House and Senate to honor cross-state reciprocity in occupational therapy occupational licensing.

A recent Center for Public Integrity report looks at a wider category keeping a wide variety of university-educated engineers from working many engineering jobs: Those with an engineering technology degree are in many states barred from legally working as licensed engineers. Nine states bar them explicitly while nine others do so effectively because of extremely onerous demands made on the engineering tech degree holders. As the Center for Public Integrity notes:

Engineering programs focus on conceptual skills and design, while engineering technology programs emphasize practical application.

"I just think it's absurd," [one engineering tech degree holder] said. "If you're able to do the job correctly, pass the exams and other states accept you, then it makes sense for other states to follow suit."

This inequity slams the door on many engineers, especially Black engineers, who are twice as likely to enroll in engineering technology programs as they are in engineering programs that guarantee a path to licensure. ET programs tend to be more financially accessible and have lower starting math requirements, making them more suitable for academically disadvantaged students.

Engineers who want to become licensed in a state must obtain an accredited engineering degree, pass the Fundamentals of Engineering exam, demonstrate work experience and pass the Principles & Practice of Engineering, or PE, exam.

An IRW [Investigative Reporting Workshop] breakdown of licensure application rules and laws nationwide show engineering technology degrees are recognized as equivalent to engineering degrees in only 12 states [even though] There's no evidence to suggest that students from engineering technology programs are less prepared for the exams or underperform once licensed.

Bureaucrats and those trying to protect their death grip on the legal right to practice certain occupations will always be there with vague, specifics-thin calls on alleged consumer safety issues even against such simple measures as reciprocity with other state's occupational licensing requirements. But policymakers across the board need to realize that too many such requirements are pure protectionism for those already with their foot in the door. Occupational licensing routinely harms both consumers blocked from legal access to service providers and the many Americans locked out of legal work by these laws.