Free Minds & Free Markets

Two Governors Kick Off 2019 With Big Occupational Licensing Reforms

A new law in Ohio and an executive order in Idaho require state lawmakers to take a more active role in overseeing occupational licensing boards.

ELIZABETH FRANTZ/REUTERS/NewscomELIZABETH FRANTZ/REUTERS/NewscomTwo Republican governors got the new year off to a productive start by striking a small blow against their states' occupational licensing boards.

In Ohio, Gov. John Kasich signed a bill requiring the state legislature to review all licensing boards at least once every six years to ensure there is a continued public need for the licensing rules. The legislature will also be tasked with determining whether one-size-fits-all licenses are "the least restrictive form" of regulation for specific professions. If it determines that the answer is "no," the boards can be shuttered. Finally, the legislature will have to determine if a board's actions have inhibited economic growth, reduced efficiency, or increased the cost of government.

"Occupational licensing should only be a policy of last resort," says Lee McGrath, legislative counsel for the Institute for Justice, a libertarian law firm. A 2018 analysis published by McGrath's group calculates that licensing laws cost Ohio 68,000 jobs and $6 billion in economic activity annually. "This licensing reform has the potential to create more economic opportunity and save Ohioans billions of dollars," McGrath says.

The bill also opens the door for Ohioans with criminal records to obtain licenses in some fields. More than a million residents of the state have a criminal record of some sort, and about 25 percent of all Ohio jobs were off-limits to those individuals solely because of their records, according to a recent report from Policy Matters Ohio, a left-leaning think tank.

Licensing rules that automatically disqualify individuals with criminal records continue to punish people long after they have paid their debts to society. Under the reforms that Kasich signed this week, individuals with criminal records will be able to ask licensing boards whether their specific criminal records would be grounds for denying a license before they spend time and money (sometimes years and several hundred dollars) trying to meet the qualifications.

It would be better to require licensing boards to publish a specific list of crimes for which a license application could be denied. It makes sense, for example, to prevent someone with a history of crimes against children from getting a license to be a preschool teacher, but not to keep him from being a carpenter. Still, Ohio's new law will likely help some residents of the state navigate the complex licensing process and land a job.

In Idaho, the first executive order issued by newly elected Gov. Brad Little will impose a mandatory periodic review of the state's occupational licensing boards by the state legislature, similar to the reform in Ohio. In his first "state of the state" address, Little promised to put regulatory and licensing reform at the top of his agenda.

The executive order "will deliver more jobs and economic opportunity to Idahoans, particularly our low-income friends and neighbors," says Wayne Hoffman, president of the Idaho Freedom Foundation, a free market think tank.

Idaho and Ohio join three other states—Louisiana, Nebraska, and Oklahoma—that passed similar licensing sunset provisions last year.

It would be better, of course, for states to strike many occupational licensing laws from the books entirely. A promise that the legislature will review those laws and boards every few years is only as good as the people who sit in the legislature—and lawmakers always have more interesting and politically beneficial things to do than check up on how a bunch of bureaucrats are doing.

But the mandatory sunset periods are an undeniable step in the right direction, even if only as a way to curb some of the boards' worst behaviors. It's one thing to pass a rule saying that someone needs 1,000 hours of training before he can safely use a blow dryer on a customer's scalp when you think you are the final authority on the matter. Simply knowing that you'll be subject a periodic review might put the brakes on that sort of thing. And if it doesn't, the periodic reviews give the public (and pro-liberty groups like the Institute for Justice and state-based think tanks) an open door to press for changes or at least to highlight the more problematic laws.

The reforms in Ohio and Idaho are not a guarantee that licensing boards won't continue to abuse their authority. But they tip the scales slightly toward economic freedom.


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  • Fist of Etiquette||

    The legislature will also be tasked with determining whether one-size-fits-all licenses are "the least restrictive form" of regulation for specific professions. If it determines that the answer is "no," the boards can be shuttered.

    Can or shall? Because shall would be better.

  • Don't look at me!||

    So I guess sometimes executive orders are good, but sometimes not? 'Cuz in the other post it was an obscenity.

  • $park¥ The Misanthrope||

    I've wondered that same thing in the past. The best I can figure is that it's OK when done at the state level and not-OK when done at the federal level.

  • a ab abc abcd abcde abcdef ahf||

    No, it's ok when favoring freedom and not ok when against freedom. That's the rationale that springs to mind.

    It brings to mind all the gun grabbers who have armed bodyguards.

  • $park¥ The Misanthrope||

    The fact that many Reason writers over the course of several years cheer when the outcome is good and boo when the outcome is bad indicates that they're not against executive orders on principle. And that's fine, I'm not holding it against the writers or the publication, but it can make some arguments seem silly.

  • SQRLSY One||

    Executive orders are good when they scale back the over-reaches of Government Almighty. They are bad when the extend the over-reaches of Government Almighty.

    Next question?

  • Don't look at me!||

    Aren't executive orders over-reaches of government in themselves?

  • Juice||

    If you come at me with a double-edged sword, I might just try to use one edge against you.

  • SQRLSY One||

    I suspect you're correct. But we do fight fire with fire (back-burn to starve the fire of fuel and keep the fire from propagating). We fight violence with violence. Ideally we'd not do these things (ideally we'd find a better way).

    In the meantime, being practical-minded, I am in favor of "whatever works" to rein in Government Almighty over-reach... Ballots are better than bullets, yes, of course...

  • Rossami||

    You're approaching the question wrong. Executive orders are a necessary function of government. Executive orders are how the Chief Executive tells his executive branch subordinates how to do their jobs. The concept of executive orders is neither inherently good nor bad. Trying to claim that they are is like saying that oxygen is inherently good because we need it to breath or inherently bad because forest fires.

    Executive orders have to be evaluated based on their content. Executive orders are good when they a) are within the proper scope of executive authority and b) represent good public policy. (Libertarians generally interpret good public policy to mean increased freedom but that's not necessarily the only lens.) On the other hand, executive orders that attempt to usurp the authority of the Legislature are bad. Also bad are executive orders that are just bad ideas.

    Unfortunately, we've had rather a lot of examples lately of executive orders in the latter category. Those overreaching or just bad executive orders deserve all the ridicule they receive - but because they are bad, not merely because they are executive orders.

  • TJJ2000||

    That's exactly what I was gonna say.

    Executive Orders is how Governors/President direct their Agencies/Staff to implement legislated law.

  • Calidissident||

    It's almost as if not all executive orders are exactly alike. If there's something in Idaho's constitution that makes this legally dubious then I'll be all means agree that it's not a good move even if I like the overall goal. State and federal governments have different rules and structures so looking at every executive order from different levels of government the same doesn't make sense. And having the legislature review licensing boards doesn't exactly strike me as the same thing as declaring an emergency to repurpose billions of dollars in spending and possibly seizing vast swathes of private land (depending on how far Trump is trying to go here, I've read some analysis saying he might just limit it to building on federal land) without congressional approval.

  • TuIpa||

    "It's almost as if not all executive orders are exactly alike"

    It's almost as if that has nothing to do with a principled objection to them.

  • Rossami||

    Nobody (except maybe a true political anarchist or utopian) has a principle objection to executive orders in general. You can't. That's how the Chief Executive communicates to his/her executive branch subordinates.

    The principled objection is to executive orders which usurp legislative authority. And while there are lots of examples of those, it's a bit of a stretch to put Little's order into that bucket.

  • BestUsedCarSales||

    I guess we're just never getting daily links again.

  • BestUsedCarSales||

    I hope the active considerations are indicative of improvements to the system. But at this point, adding more oversight to boards that have the exact same amount of power does not indicate more freedom.

  • $park¥ The Misanthrope||

    Are you saying that creating a committee to oversee the boards might not have the desired outcome?

  • Jerryskids||

    Big talk about occupational licensing reform, but I'm not holding my breath for any meaningful action. Review to see if there's still a public need for licensing? Of course there is or there wouldn't have been licensing to start with - and it'll be the same "if it saves one life" nonsense that they always use to stifle competition and raise prices. They'll get input from the same big companies who pushed for licensing in the first place and find - surprisingly - that the industry itself favors licensing and regulation. I'd have a glimmer of hope if they imposed sunset provisions where the default is that there's no licensing unless and until there's a proven need for it rather than there's licensing unless or until there's a proven need to get rid of it because that's just not the way things work.

  • a ab abc abcd abcde abcdef ahf||

    It's better than nothing, but that's like comparing the vacuum near the moon's surface with the vacuum out past Pluto.

    Best I can see is that it means some politicians see some benefit in paying lip service to reining in occupational licensing.

  • SQRLSY One||

    Yes, and I am still waiting (after reining in occupational licensing happens by some unknown miracle) for some sunny day when the over-regulation (including prescription requirements) for medicines and "medical devices" will be reined in as well!

    In the meantime, my self-chosen pubic duties are calling...

    To find precise details on what NOT to do, to avoid the flute police, please see … This has been a pubic service, courtesy of the Church of SQRLS!

  • Sometimes a Great Notion||

    I agree but at least legislators won't be able to hide these decisions behind unelected boards. They will have to own their vote.

  • Incremental Libertarian||

    I think what's missing here is the fact that most states have automatic sunset provisions that are typically every 7-10 years. The initial passage of a practice act is often focused on minimal criteria to practice. It is the changes made during the sunset review process that make the regulation onerous and often give these boards their power trip. Think about Physical Therapists, for example. Most states passed initial licensing laws setting the requirement at a Bachelors degree. Within 15 years that is now a Doctoral degree with no proven need for it (except for PTs to demand more money for their services). The states need to focus on establishing sunrise provisions to prove the need for regulation at the onset of regulation and review criteria to prove the need for continued regulation. Raising the entry level barrier during these reviews needs to have a fairly high barrier itself.

  • Robert||

    So you're saying that sunset provisions, where the default is that the regul'n goes away, actually result in ratcheting up of the requirements?! What, like every time the legislature is forced to look at the statute or lose it, they decide to not only re-enact it, but make it more restrictive?

  • ||

    The state legislators have relatively little to do. Reviewing only every 6 years is nonsense. A state legislature should review 100% of the administration state regulations and a simple majority (50+%) of both houses in a bicameral state or even a unicameral state must happen to sustain such regulations. Once sustained by the legislature something like a 50+% majority in both houses in bicameral or 50+% in a unicameral state would be required to repeal a regulation. Otherwise, the laws of the state are no longer subject to the vote of the people.

  • Alan@.4||

    Be interesting to see which groups swing a bigger hammer. On one side, we have the bureaucrats who populate these commissions. On the other side, we have the populace, which all to often lies there unresisting, while the bureaucrats and "connected types" walk all over them.


    Yeah, state and federal governments have different rules and structures so looking at every executive order from different levels of government the same doesn't make sense.


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