MENU

Reason.com

Free Minds & Free Markets

Trump's Labor Secretary Tells State Lawmakers: 'Fix Occupational Licensing'

Labor Secretary Alexander Acosta says excessive licensing hinders the American workforce, reduces economic opportunities.

KEVIN DIETSCH/UPI/NewscomKEVIN DIETSCH/UPI/NewscomLabor Secretary Alexander Acosta says state lawmakers should work to eliminate unnecessary state licenses.

Speaking Friday to state lawmakers gathered in Denver for the annual American Legislative Exchange Council's conference, Acosta called for repealing licensing laws that exist solely to block competition or create a privileged class within the workforce. While only one job out of 20 required a government-issued permission slip in the 1950s, today about a quarter of all jobs in America are subject to licensing. Acosta said that's "part of a nationwide trend where we regulate, and regulate, and regulate" at the expense of individual workers and the economy as a whole.

Here's how Acosta broke it down:

Excess licensing hinders the American workforce.

First, the cost and complexity of licensing creates an economic barrier for Americans seeking a job, especially for those with fewer financial resources.

Second, excessive licensing creates a barrier for Americans that move from state to state.

Third, excessive licensing creates a barrier for Americans looking to leverage technology and to expand their job opportunities.

He's right on all three counts. Licensing is a barrier to entry for all Americans looking for work in certain professions, but it's particularly pernicious for those on the lower end of the economic ladder. For example, getting a license to cut hair can require more than a year of expensive schooling in some states, while becoming an interior designer places like Florida requires more than 2,000 days (yes, days!) of training. There's little evidence that licensing those professions does much of anything to protect public health and safety.

Once you have a license, you might be stuck in the state where you earned it. A 2015 study by the Brookings Institution found that licensed workers were less likely to migrate between states, but not necessarily because people are happy in those places. Instead, researchers say workers feel locked in place because most state-issued professional licenses are not transferable, so moving out-of-state means you'd be out of business unless you can obtain a new license in your new home.

Licensing laws are also stifling innovative technologies developed by forward-looking entrepreneurs. People like Armand Lauzon of Nashville, Tennessee, who last year launched Project Belle, a software app that connects cosmetologists, makeup artists, and other beauty professionals with clients seeking in-home services. It's basically Uber, but for looking your best without having to visit a salon. He was nearly forced out of business by the Tennessee State Board of Cosmetology and Barber Examiners—despite the fact that he was running a software company, not a cosmetology business—simply because he'd found a new, innovative way to give consumers something they wanted by disrupting a regulated and licensed market. Technological innovations make our lives better, and licensing laws that block those developments are doing nothing more than protecting outdated business models.

Though he was speaking to a crowd of mostly conservative and libertarian state lawmakers at ALEC, Acosta's message is a bipartisan one. During the Obama administration, the Department of Labor and the White House Council of Economic Advisers published a lengthy report on licensing laws, and called for states to take action to remove unnecessary barriers to work. "Licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars," the report concluded.

Libertarians have been objecting to occupational licensing laws for decades, but conservatives and liberals are now joining the cause. Kentucky and Mississippi have enacted major licensing reforms this year with bipartisan support, and several other states are considering similar action.

Add to that the outcome of a 2014 Supreme Court case that raised the spectre of anti-trust action against state-level licensing boards—and the launch of a new Economic Freedom Task Force within the Federal Trade Commission, which aims to use that Supreme Court ruling to target anti-competitive licensing laws—and it's clear that states have every reason to take Acosta's advice and take a critical look at how their licensing laws are working (and how they aren't).

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.

  • Jerryskids||

    Excess licensing hinders the American workforce.

    First, the cost and complexity of licensing creates an economic barrier for Americans seeking a job, especially for those with fewer financial resources.

    Second, excessive licensing creates a barrier for Americans that move from state to state.

    Third, excessive licensing creates a barrier for Americans looking to leverage technology and to expand their job opportunities.

    Excess licensing enriches the mandarin class, giving them jobs and status and rich opportunities for graft and corruption. Why would anybody with any brains become an entrepreneur when they can become a bureaucrat and an entrepreneur's overlord much easier?

  • BYODB||


    Why would anybody with any brains become an entrepreneur when they can become a bureaucrat and an entrepreneur's overlord much easier?

    It's not that easy! There's a really long waiting line to become an overlord, and they all seem to want prior overlording expierence or, even more importantly, you must have donated to the 'right' overlord fund.

    What, you think they'd risk a non-overlord becoming an overlord?

    *don's Archer glasses*

    That's how you get Trumps! Do you want Trumps?!

  • CptNerd||

    Plus you need to take at least 3 years training at an Overlord Academy, and take the $3000 Overlord License Exam, before you can even get in line to become one.

  • Rich||

    becoming an interior designer places like Florida requires more than 2,000 days (yes, days!) of training.

    How many days to become an editor?

  • Citizen X - #6||

    If you know how to mix a good cocktail, less than an afternoon.

  • Sevo||

    Neither are you.

  • Scarecrow Repair & Chippering||

    My! So loquacious!

  • Citizen X - #6||

  • ||

    Guys, this is a non-profit. What's there to lose for being incompetent?

  • Longtobefree||

    Was it planned that way?

  • Jgalt1975||

    about a quarter of all jobs in America are subject to licensing

    I'd be curious to know how "subject to licensing" is being defined, as I'm rather incredulous about the fraction being that high unless you include jobs that require a driver's license as part of the total.

  • Rhywun||

    Professions That Need US Licensure

    The following professions require US licensure before you are legally allowed to practice it in the US:

    medicine
    nursing
    law
    dentistry
    teaching
    accounting
    veterinary medicine
    pharmacy
    psychology
    engineering
    architecture

    These are not the only professions that require US licensure. However, they are well-known and sought-after professions.

    I believe the 25% figure. Anything medical + teachers are already a huge number.

  • Number 7||

    that's very misleading. Some accountants are licensed, many are not. There is a thing called a Professional Engineer that is a license but it is not required for most engineering endeavors, there may also be branches of engineering, such as civil, that require licenses. But to say engineers need to be licensed is misleading as the vast majority are not.

  • BYODB||

    That does seem high, but consider that in many places to even be a plumber you need a license or certificate. Or to be a person who cuts hair.

    Sure, there are black markets for everything but in the legitimate market licensure is an encroaching cancer.

  • LibertarianJRT||

    You can't practice Engineering without a license. No matter how large the staff you need a licensed professional to seal (and become legally liable) for the work. In Puerto Rico they take the extra step of requiring contractors to have licensed engineers on staff.

  • TMLutas||

    Do you know which specific professions require licensing in your state? Do you know who is for and against licensing each one? If we're going to fix it, we have to map it first.

    None of that is actually that hard to do. It's just a little work, a little space on an internet connected hard drive, a little organizing, and a little money (probably less than $1000 total budget yearly).

    Are you in?

  • GILMORE™||

    That seems misleading to me. Pretty much everything in finance has FINRA license requirements. I'm sure other industries are similar. I don't think all of it is terrible, but the CE requirements are often stupid

  • Robert||

    I'm more interested in how "all jobs" is determined. Do they mean a quarter of the total number of people employed in the USA needed a license for their current job? Or is there some Labor Dept., industry, or academic breakdown of occupations, and for a quarter of those occupations, a license is required in at least some jurisdiction?

    For instance, the vast majority of teachers are doing it in gov't jobs where they needed either a license or special permission; however, "teaching" per se does not require a license.

    If you do it by list of occup'ns, how thin do you slice it? If medical specialties are counted separately, that weighs very heavily.

    Then there are the myriad gov't jobs that require traineeship. Is completing the traineeship counted as a "license"? It is, after all, a status conferred by gov't.

    I'd like to see this with only private sector jobs counted, and counted according to person-in-position, not category-of-employment.

  • TMLutas||

    If we had a database of such jobs, this would be easy. Would you like to make one?

  • Rhywun||

    This should be a no-brainer to the left but watch them defend these cartels tooth-and-nail now.

  • Sugarsail||

    The engineering profession is the same but even worse. State engineering exams are often not transferable to other states and are typically as long and as difficult as the state bar exam...they are three 8 hour days of testing (and 4 years experience in your field is a requirement just to take it). But what's worse is there are only examinations that cover particular disciplines within engineering (chemical, civil, etc...). The engineering field is far more diverse and often more specialized than what the tests cover so if your initial career path puts you in a certain field for which there is no exam, you can't even take the test since you don't have the required pre-requisite experience. It's a catch 22.

  • DesigNate||

    In Texas, you have to get a Masters degree and complete roughly 2.5 years of internship (under a licensed architect, naturally) before you can even sit for the exam. At least once you've done all of that, you'll be able to get reciprocity in some other states.

  • Robert||

    The engineering field is far more diverse and often more specialized than what the tests cover so if your initial career path puts you in a certain field for which there is no exam, you can't even take the test since you don't have the required pre-requisite experience.


    Then how do you start? Can you give examples of how someone's initial career path "puts" them in a certain field? If they're already in such a field...?!

  • damikesc||

    For his rampant faults, this is even being uttered because Trump won.

    Hillary would've not had anybody even address this.

  • Cyto||

    Though he was speaking to a crowd of mostly conservative and libertarian state lawmakers at ALEC

    A crowd of mostly libertarian lawmakers? How many folks were there, seven?

    Or is that "mostly conservative and libertarian" as in "one self-described libertarian and 138 conservatives"?

  • Robert||

    On business issues like this, the choir members can identify themselves either way. It's been that way since the middle 20th C.

    There are people who'd consider themselves conservative who would not be consistently libertarian even on just biz issues, so they might not be part of this choir, but that leaves plenty so self-identifying who would be.

  • Uncle Jay||

    RE: Trump's Labor Secretary Tells State Lawmakers: 'Fix Occupational Licensing'
    Labor Secretary Alexander Acosta says excessive licensing hinders the American workforce, reduces economic opportunities.

    I'm sure I'm not reading this right.
    A politician that believes that excessive licensing hinders the American workforce, reduces economic opportunities in our country?
    That can't be right.

  • Fist of Etiquette||

    I guess Trump ain't so bad after all. Eh, Reason?

  • ||

    Screeee!!!!! Bbbbbb Russia! Russia! Russia!

  • ||

    Hey what about the guy who helps horses fuck? The poor bastard that has to guide the sire's schlong to the pussy? Do you need a license for that? Q

  • Longtobefree||

    So where do libertarians stand on this? Are we for the feds telling the states what to do, or undo in this case?
    Or are we so incensed about state/local licensing that we accept federal meddling 'for the children'?

  • LibertarianJRT||

    Perhaps licensing meets the "rights reserved to the people" standard, in which case non-governmental organizations (guilds and insurance markets) would set the rules, not the state per say.

  • Ralph Gizzip||

    Why do States enact licensing requirements? For the graft and corruption, of course.
    In the immortal words of Gov. Wm J. LaPetomaine, "We've got to protect our phoney-baloney jobs, gentlemen."

  • swampwiz||

    While there may be some instances of over-licensing, in general licensing laws are necessary to ensure that the servicer actually does a good job - e.g., any yahoo could get a pair of scissors and call himself a barber, etc.

  • Longtobefree||

    Good point.
    There is no chance in the world that people would tell each other if he does a good job or not. I mean, it would take some kind of massive government program to discover some way of letting everyone in the world know if a person liked or did not like a business. That would cost a gazillion dollars and bankrupt the national economy.
    Because over paid bureaucrats with massive pensions know much more about a business they never patronize than the ignorant customers of that business.

  • Jimbino||

    Licensing interferes with the right of the talented DIYer to do his own house wiring and plumbing.

  • tinder download||

    very nice post. I like it. Thanks for sharing this information.
    Tinder is the best online chatting application. Try it.
    http://www.tinder-pc-download.com/ tinder for pc
    http://www.tinder-pc-download.com/ tinder download

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online