Occupational Licensing

How Congress Could Cement State-Level Progress on Occupational Licensing Reform

The Restoring Board Immunity Act would give states yet another reason to rein in overzealous licensing authorities.

|

Occupational licensing is supposed to protect consumers from harm, but often it seems to do little more than protect licenseholders from would-be competitors.

That was certainly the case in North Carolina, where a licensing board created to regulate dentistry tried to protect dentists from losing business to teeth-whitening services. After the Federal Trade Commission got involved, the U.S. Supreme Court eventually ruled in 2015 that the North Carolina State Board of Dental Examiners had overstepped its authority.

That ruling, which threatened state-level licensing boards with the loss of antitrust immunity if they engaged in blatantly anti-competitive behavior, helped spur some state-level reforms in recent years. But there are still plenty of boards that enforce unnecessary rules regulating everything from hair-braiding to the dispensing of dietary advice. If there is no threat to public safety, is there a need for licensing at all?

Not so, says Rep. Darrell Issa (R–Calif), who reintroduced a bill that provides a pathway for states to reform licensing boards in order to be shielded from the threat of federal antitrust lawsuits.

"While some licenses ensure important safety standards," Issa said in a press release, "far too many create unnecessary burdens for jobs no more risky than braiding hair, pet-sitting, or flower-arranging."

Specifically, the Restoring Board Immunity Act would provide two pathways for states to follow. They could create new accountability measures for licensing boards within the state government—effectively giving executive branch officials a positive obligation to review and approve the behavior of boards that are usually allowed to do as they please. Or they can pass laws that would force courts to apply a higher degree of legal scrutiny to licensing boards' actions, in the event that a board is hauled in front of a judge for approving anti-competitive rules.

Both are meant to prevent the sort of self-dealing that occurred in the North Carolina dental board case—and which is all too common for boards that are often controlled by the very businesses they are supposed to regulate.

All that red tape isn't doing much to protect consumers, but it does seem to have an impact on employment. One in every four American jobs now requires a government-issued license, according to a recent report from the Council of State Governments. Morris Kleiner, a labor economist at the University of Minnesota, estimates that easing licensing rules could create 2 million more jobs nationally. And licensing also reduces economic mobility by making it harder for workers to move from state to state, since that often requires going through an expensive and time-consuming process to get licensed again.

At a time when lawmakers are particularly concerned about the unemployment rate and pushing Americans to get back to work in the wake of the COVID-19 pandemic, licensing laws remain a significant barrier, as Reason's Brian Doherty noted earlier this week.

Occupational licensing reform has enjoyed bipartisan love in recent years.

The Obama administration published a landmark report calling for states to reform licensing rules that make it harder for workers and entrepreneurs. The Trump administration sought to undo many other Obama-era policies, but in this case it nudged states to ease licensing rules, particularly for military spouses. More recently, Republican leaders have recognized the importance of licensing reforms as a part of the GOP's attempt to reorient itself toward the working class. President Joe Biden has signaled his desire to "put an end to unnecessary occupational licensing requirements." Both blue and red states have enacted changes to remove red tape for a wide range of workers, and a few states have even passed laws to accept out-of-state licenses without requiring retraining.

These are all steps in the right direction. Now Congress advance reform yet farther.

NEXT: ACLU Study Finds Obama-Era Restrictions Failed To Slow Flow of Military Gear to Police

Occupational Licensing Deregulation Regulation Jobs

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

Please to post comments

9 responses to “How Congress Could Cement State-Level Progress on Occupational Licensing Reform

  1. The court found that the NC State Board of Dental Examiners overstepped its authority? Guess that is the tooth, the whole tooth and nothing but the tooth.

    1. Your dental humor is a bridge too far.

      1. Anti-dentite!

        1. brace yourself.

          1. For a crowning achievement. Something you can really sink your teeth into.

            1. Making money online more than 15$ just by doing simple work from home. I have received $18376 last month. Its an easy and simple job to do and its earnings are much better than regular office job and even a little child dd can do this and earns money. Everybody must try this job by just use the info
              on this page…..VISIT HERE

            2. Tooth be told, this whole business of special interests scraping us raw, by tooth and by claw, is getting WAAAAY long in the tooth!

  2. “One in every four American jobs now requires a government-issued license, according to a recent report from the Council of State Governments.”

    Like 500 lawyers at the bottom of the ocean, that can be called a good start.

    “And licensing also reduces economic mobility by making it harder for workers to move from state to state, since that often requires going through an expensive and time-consuming process to get licensed again.”

    How can the fascists rule us properly without knowing where each worker is going to be?

  3. yeah right a Congress filled with BDS twats and run by great grandma Pelosi isn’t going to accomplish anything.

Comments are closed.