OPINION:
In the United States, employers are still having a hard time finding the workers they need. This problem appears to be worst in the South. Recent analysis suggests that there are 2 million open jobs in the South and insufficient workers to fill them.
There are many factors contributing to this challenge. Excessive occupational licensing requirements certainly are not helping.
In recent work that we published via the Archbridge Institute, we provide a state-by-state analysis and ranking of how licensing stacks up across the U.S. We analyzed occupational licensing requirements for 331 occupations across the country — professions ranging from doctors and dentists to mixed martial artists, pawnbrokers and body piercing artists.
Five states really stood out for burdensome licensing: Alabama, Arkansas, Oklahoma, Texas and Washington. Each of these five states licenses half or more of these 331 occupations. Arkansas and Texas license 180 or more of the professions.
The average state in the U.S. licenses 150 of these professions. Five states — Colorado, Indiana, Kansas, Missouri and Wyoming — are well below this average and come in at the bottom of our national ranking.
Why does this matter? Occupational licensing makes it a crime for a person to pursue work in a profession before meeting minimum entry requirements. These requirements often include minimum levels of education and training as well as paying fees to the state.
Policymakers enact occupational licensing laws with the intent of promoting public safety, but this does not come without a cost. By making it harder for aspiring workers to begin working, many of them will choose not to work. This is Economics 101, and it is borne out in recent research.
Perhaps it makes sense for consumers and aspiring workers to bear this cost for some professions. But how can we justify a license for an electrical sign apprentice in Texas? Texas is the only state in the country with this license. Or for a florist in Louisiana? Again, Louisiana is the only state in the country with this license.
Further, there is a lot of evidence that licensing makes services more expensive. This further pinches U.S. consumers that had to get used to inflation again after almost 40 years of relatively stable prices.
But without licensing, how can consumers judge quality? Private certification can often do the job just fine. The National Institute for Automotive Service Excellence has provided this service to consumers choosing auto mechanics — one of many ways consumers can get information about quality without licensing.
Is there a way forward? Several states have moved ahead with reform in recent years. Only two states in the country require ocularists, who fit people for glass eyes, to get licensed. At the end of 2024, only one state will license ocularists. Ohio will eliminate ocularist licensing after conducting a thorough review of its licensing requirements. This will leave Washington as yet another state that chooses to uniquely license a profession.
Next year, Ohio will join at least seven other states that have eliminated at least some occupational licensing in the last 10 years. In 2016, Rhode Island eliminated licensing for 20 professions. It is important to note that despite this reform, Rhode Island is still in the top half in terms of the total number of occupations licensed.
It is imperative for states to conduct a critical, thoughtful and independent analysis of occupational licensing. Several states have already emerged as leaders, and Utah, with its new Office of Professional Licensure Review, may be on the cusp of emerging as the leader.
Employers need workers, and consumers will suffer if they can’t find them. Sensible occupational licensing is a win-win for aspiring workers and consumers alike.
• Edward Timmons and Noah Trudeau are research affiliates with the Archbridge Institute and work for the Knee Center for the Study of Occupational Regulation at West Virginia University.
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