A Practical Approach to Occupational Licensing Reform

NCPA, July 13, 2016

NCPA Senior Fellow Thomas Hemphill in CATO's Regulation Magazine.

Many Americans, including older adults, lost their jobs and careers in the last recession. more than a half-decade since that recession ended, the national labor force participation rate remains stubbornly near its lowest level in decades. As a result, occupational re-training and barriers to entry into professions and trades/vocations have emerged as a public policy concern. A 2012 study by the Institute for Justice of 102 low- and moderate-income state licensed occupations across all 50 states and the District of Columbia found that 66 have greater average licensure burdens than emergency medical technician (EMT). On average, a cosmetologist needed 372 days in training while an EMT needed just 33 -- with the latter certainly ranking significantly higher in relative public health and safety risks.

Occupational regulation is the traditional bailiwick of state governments, with the federal and local governments in a secondary role. Since the middle of the 20th century, occupational licensing, a subset of occupational regulation, has been a regulatory growth area for state governments and an increasing source of public revenue. In 1952, the Council of State Governments reported that less than 5 percent of U.S. workers were required to be licensed to legally perform their occupation.

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