In all states, onerous occupational licensure laws keep Americans from their right to earn a living.
These barriers to work – which include, but are not limited to, excessive training and expensive fees – are often put in place by the politically connected as a way to protect themselves from competition.
“Licensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means,” writes the authors of the second edition of License to Work, an Institute for Justice report that “examines both the scope and the specific burdens of occupational licensing” affecting 102 lower-income occupations. On average, one of these licenses requires $267 in fees, nearly a year of education and experience, and one exam.
To put the consequences of these protectionist policies in perspective, estimates show that occupational licensure laws may result in as many as 2.85 million fewer jobs nationwide and could cost consumers as much as $203 billion a year.
Fortunately, more and more lawmakers are recognizing the serious harm that licensing laws inflict on job seekers and are working to remove these barriers.
Iowa Becomes One of Seven States to Pass A Universal License Recognition Law
Last week, the Iowa legislature sent Representative Shannon Lundgren’s (R) House File 2627 to Governor Kim Reynolds (R), making Iowa the seventh state to pass a universal license recognition bill. Once implemented, HF 2627 will allow new Iowans to use the training and skills they already have without additional red tape.
Iowa’s bill also waives initial licensing fees for any first-time applicants from families that earn less than 200 percent of the federal poverty level and applies criminal justice reforms to the licensure process, creating a uniform standard of review for those who have their licensed denied based on conviction history. These important provisions will make it easier for low-income households and the formerly incarcerated to get jobs and provide for their families.
“We all know heavy regulations serve as a red tape tax that impacts Iowa’s working class,” said Chris Ingstad, president of Iowans for Tax Relief. “Occupational licensing laws make it more difficult and more expensive for Iowans to earn a living and fill high-demand jobs. The changes passed by the legislature in House File 2627 put Iowans ahead of the special interests.”
Arizona was the first state to allow for universal license recognition. “Arizona’s universal recognition law may be less than a year old, but early data shows that it is already having a tremendous effect,” explains Heather Curry, Director of Strategic Engagement at the Goldwater Institute. “Since universal recognition went into effect in Arizona in September of 2019, over 1100 individuals have applied for and been granted a license to work in fields ranging from cosmetology to engineering.”
Montana, Pennsylvania, Utah, and Idaho have also enacted a version of universal license recognition, and earlier this year, the Missouri legislature sent Representative Derek Grier’s (R) House Bill 2046 to Governor Mike Parson (R), who is expected to sign it into law.
Louisiana And Mississippi Pass Licensure Recognition for Military Families
Louisiana and Mississippi recently became one of a handful of states that have passed some form of licensure recognition for military families.
Earlier this month, Governor John Bel Edwards (D) enacted Representative Chuck Owen’s (R) House Bill 613, which establishes a more simple and efficient process for military spouses and dependents who are licensed in another state to become licensed in Louisiana.
“For far too long, Louisiana’s government has placed countless unnecessary barriers on those who simply want access to jobs and opportunity to support their families. Now, thanks to Representative Chuck Owen’s leadership and Governor Edwards’ signature, this needless burden has been lifted from our military families, so we can Get Louisiana Working,” said Daniel Erspamer, CEO of the Pelican Institute for Public Policy.
Similarly, last week, the Mississippi legislature sent Senator Chuck Younger’s (R) Senate Bill 2117 to Governor Tate Reeves (R), who is expected to sign it into law. Once implemented, Mississippi will also allow military spouses and dependents to obtain a Mississippi license based on the education and training that they have already completed in other states.
“State licensing restrictions hit military families hard because they don’t have a choice as to when and where they move,” said Dr. Jameson Taylor, vice president for policy at the Mississippi Center for Public Policy. “This is a pro-family, pro-woman, pro-military bill, and I am very proud to have worked with ATR and the U.S. Department of Defense to help pass this outstanding reform. I am also very proud of our bill sponsors, Rep. Steve Hopkins and Sen. Chuck Younger. They selflessly dedicated themselves to getting this bill just right for the military families of our state. Our chairmen Rep. Bubba Carpenter and Sen. Mike Seymour also exercised incredible leadership in prioritizing this bill and putting Mississippi on the map for military families.”
These reforms in Louisiana and Mississippi, which are very helpful to military families, who are particularly vulnerable to the consequences of onerous licensing requirements, are also a great step in the direction of granting licensure recognition for all workers.
“The movement building behind universal recognition of occupational licenses highlights the importance of federalism—50 state competing to provide the best government at the lowest cost,” said Grover Norquist, president of Americans for Tax Reform. “Destructive and stupid old laws are most likely to be repealed when surrounded by examples of better (or no) laws. Good laws drive out bad laws.”