Business

Gov’t Permission to Work? New Report Examines Costly Burden of Occupational Licensing Laws

The Institute for Justice has just released a report that measures the burden occupational licensing laws put on low-income workers and business owners.

The study, titled “License to Work: A National Study of Burdens from Occupational,” finds that occupational licensing requirements do put a costly and oftentimes unnecessary burden on U.S. workers.

But how did the Institute for Justice come to this conclusion?

“The report documents the license requirements for 102 low- and moderate-income occupations — such as barber, massage therapist and preschool teacher — across all 50 states and the District of Columbia,” the Institute’s YouTube page reads, “It finds that occupational licensing is not only widespread, but also overly burdensome and frequently irrational.”

The report found that, on average, license requirements force workers to spend as much as nine months in education/training, pass one exam, and pay more than $200 in fees.

“One third of the licenses take more than a year to earn. At least one exam is required for 79 of the occupations,” the report adds.

“Barriers like these make it harder for people to find jobs and build new businesses that create jobs, particularly minorities, those of lesser means and those with less education,” the report adds.

So if these requirements are so time consuming and costly, why do some states support them? What purpose do they serve?

“Licensing may have little to do with protecting public health and safety but it does protect those who already have licenses from competition,” the Institute’s Dick Carpenter said, “raising barriers keeps new competitors out and prices high.”

Does the Institute for Justice make any recommendations?

“License to Work recommends reducing or removing needless licensing barriers,” the report suggests.

“If state lawmakers want to help more people find jobs, they should start by clearing away licensing barriers that do little more than protect some people from competition by keeping others out of work,” Carpenter adds.

Front page photo source: Maximum PC

Comments (50)

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  • THETAXMAN
    Posted on May 8, 2012 at 11:00pm

    All laws, rules and regulations passed after 1960 should be abolished. Congress should then revisit those ideas and then rewrite them if and only if they are more help than hindrance. I would include the civil rights act (not the voting rights act), the Americans with Disabilities Act, the Environmental Protection Agency, the Patriot Act and hundreds if not thousands more.
    One of the primary reasons the U.S. economy is stuck on slow is 50 years of regulations that have left us with an inertia problem that requires an economic bubble to overcome. No amount of federal spending can overcome the breaking power of 50 years of regulatory growth.

    Report Post »  
    • JohnHW
      Posted on May 9, 2012 at 11:51am

      You must not be actually working in the tax industry to have forgotten the newest job that requires a “license.” Your tax preparer! We generally work 3 1/2 months a year for $2 to $5 over the minimum wage. Out of that time, we might get 3 weeks of full time (40+ hours) of work per week.

      You have to take the basic course, which can cost from nothing or just cost of the books, depending on whether you might work for a national firm, or you can take it as part of a community college course. Starting this year, we have to have 15 hours (minimum) per year of classroom education PER YEAR and have to get a tax preparer ID number. The latter costs $64+ annually now, but will increase when we have to be fingerprinted this year. We also have to take an “IRS” exam – cost over $105 – the IRS has not decided how often we have to take this test. The “advanced” classroom courses can cost upwards to $300 per year.

      I manage two tax prep offices, but will make less than $6,000 this year.

      Of course, then we get people who have no idea training in finding their correct LEGAL tax liability. Yesterday, a gentleman came in expecting to pay additional taxes, but after spending an hour with him, and finding he qualified for well over $4,000 refund, he walked out instead of paying less than $300 in fees. He thought I should be paid about $150, which is what he paid the year before to another firm. (Since he said he had little change, I wonder whether he overpaid his taxes last

      Report Post » JohnHW  
  • nighttrainno9
    Posted on May 8, 2012 at 10:55pm

    Twenty years ago, I predicted we would need a license to
    take a $hit. We are getting real, real close.

    Report Post »  
  • drgermain
    Posted on May 8, 2012 at 10:53pm

    I need a licence for my business, it does not require I be capable of anything. I have no problem of licences being require to prove competence to provide a needed skill, drive a truck, work on brakes, brain surgeon, the fee charged only to compensate for the inspection and no more. I can also see a few I might add, Congressman, Senator, President

    Report Post »  
    • Salamander
      Posted on May 9, 2012 at 1:42am

      We cannot afford the fees for oversight of those latter ones (Senators, Congressmen and Presidents)!

      Report Post »  
  • Tigress1
    Posted on May 8, 2012 at 9:08pm

    These licenses are simply to raise revenue for the government. Some businesses have all sorts of different licenses, and TN even has a “Professional Tax” which is nothing but a tax for “the privilege” of working in a particular field (ie: doctor, lawyer, finance, etc.). I guess they feel that after someone has spent all that time going to school, studying to pass the tests (which aren’t free either) for the licenses, taking the risk to open a business, sacrificing for years, etc. that they should feel honored for the opportunity or “privilege” to work their arse off and give the gov. even more money! But wait, people don’t pay “their fair share”!

    Report Post » Tigress1  
    • Tigress1
      Posted on May 8, 2012 at 9:18pm

      One more thing: These licenses need to be renewed annually for an annual fee. This creates a steady stream of revenue for the gov. (on top of the taxes people pay). If you have several different licenses in several different states you are talking about THOUSANDS of dollars paid to the gov. each year!

      Report Post » Tigress1  
  • Michigan Vacation
    Posted on May 8, 2012 at 7:57pm

    Two ideas:

    1) Any new law passed by State or Fed Gov must have a ‘Sunset’ provision – the law terminates automatically within 5 to 20 years. If future lawmakers feel the law should be extended send it up for the next Sunset.

    2) Old laws on the books all Sunset at 20 years after their 99th anniversary.

    This would help limit the total laws outstanding.

    Report Post »  
    • kaydeebeau
      Posted on May 8, 2012 at 9:15pm

      I have a better idea – lets just agree upon 10 laws and all really live by them – in the full understanding and spirit of what they mean and how they really work or perhaps just the 2 that some up the 10

      Report Post » kaydeebeau  
    • Salamander
      Posted on May 9, 2012 at 1:47am

      I like your idea! Thomas Jefferson would be proud of you! He felt that each generation should only pass laws that apply to themselves and neither suffer the effects of laws their grandfathers passed nor cause their kids to suffer their foolishness!

      Report Post »  
  • ibthumper
    Posted on May 8, 2012 at 6:55pm

    Government has to control it’s servants. So quit complaining and get on board the Big government bandwagon. Take a class pay your fees and send your earned monies to the Overseers that know whats best.

    Report Post » ibthumper  
  • handsmcml
    Posted on May 8, 2012 at 6:42pm

    Having a state license does not protect the client or customer. In California, to call yourself a massage therapist requires a 500 hour course and a written test. All this doesn’t mean that you get a great, or even a good massage. What it means is that some school made a bunch of money telling someone that they are great, even if they were horrible. The school makes money by giving out diplomas. The massage therapists can charge more because they now have to pay for that expensive education and there is no competition. The state makes money from the school and the therapist because there are annual fees that need to be paid. I know people who have sessions from these certified and licensed therapists and will never go back for a massage to anyone. The people lose out in the end.

    Report Post » handsmcml  
    • Salamander
      Posted on May 9, 2012 at 1:45am

      Heck, take a look at lawyers! Just because some bloke passed the bar, doesn’t render him competent to ply his trade! Maybe when they get licensing for lawyers figured out, they can then worry about licensing the rest of us! ‘He who casts the 1st tablet, … !’

      Report Post »  
  • Midwest Blonde
    Posted on May 8, 2012 at 5:42pm

    A few months back, Stossel did a report on unnecessary regulations. One of the people he interviewed was a woman living in Utah (originally from Africa) who braided hair for her friends – and eventually, more and more women wanted their hair braided (corn-rows I think it’s called). She started charging for it. Anyway, Utah cracked down on her and told her she needed a cosmetology license. She wasn’t coloring or perming hair, or cutting or washing – just braiding – this is an unnecessary bit of BS to do one simple thing that women want.

    Less regulation in a lot of areas would be wonderful. And those (like beauty shops) that didn’t keep things clean or caused the spread of lice and such, would be out of business soon anyway. Problems like that have a tendency to “fix” themselves – no one comes back if things go wrong. Just the way it should be in the FREE enterprise system.

    Report Post » Midwest Blonde  
  • FatFreedom
    Posted on May 8, 2012 at 5:41pm

    The only person that talked about eliminating this type of ridiculous laws is Ron Paul. These idiotic laws have been introduced by Republicans as well as Democrats for years. All they do is add undo burdens for people trying to enter a job, or create a job. They do this while creating a useless overpaid government job and takes another tax payer and turns him into a tax eater. Yes, licensing is just another tax.

    It is the Tax eaters that are draining this nation, and Greece, Spain Portugal, and on and on and on. There would not be any financial problems if the public work force was less than 5%. or 10% if you want to include the “NON PRODUCING JOBS” i.e. tax accountants and any other job that is there only because of some regulation that makes their job exist.

    The Ron Paul Revolution is our only hope.

    Great video about the Power of the Free Market: http://www.youtube.com/watch?v=d6vjrzUplWU

    Report Post »  
  • Individualism
    Posted on May 8, 2012 at 5:36pm

    OWS has come justification to their protest its not because their lazy bums but dirty rats are closing them out through the laws and we have animals who murdered people abroad becoming cops and brutally enforcing it on harmless people.

    Report Post » Individualism  
  • justangry
    Posted on May 8, 2012 at 5:13pm

    You have to ask this question when cops are shutting down kids’ lemonade stands?

    Report Post » justangry  
  • threetortiecats
    Posted on May 8, 2012 at 5:11pm

    I am a dog groomer please all of you who are in California please look up sb969 this is a horrible bill that will cost many jobs and do nothing to protect the dogs.

    Report Post »  
  • moussiagilda
    Posted on May 8, 2012 at 4:54pm

    This actually potentially seems like a story. Is justice and sanity actually returning to The Blaze?

    Yes.

    Report Post »  
  • nighttrainno9
    Posted on May 8, 2012 at 4:53pm

    The only possible way obama can win this election
    is by fixing it.

    Report Post »  
  • lukerw
    Posted on May 8, 2012 at 4:48pm

    Licensing is… an Anti-Invention/Anti-Progress limit… which sets Uniform Standards… as a Practice of FASCISM!

    Report Post » lukerw  
  • I SPY
    Posted on May 8, 2012 at 4:48pm

    Justice‘s report couldn’t be more true. Get rid of the damned barriers!

    Report Post » I SPY  
  • Bryan B
    Posted on May 8, 2012 at 4:48pm

    I just had this happen to me.

    I got a job offer for a security guard at $10.00 an hour, but before I can have the job, I have to take a class that cost $195.00 + $ 70.00 for the state license, + gas money to drive to the class for a week, and I have to have all of this before I can go to work. I can’t afford this.

    I see this alot when it comes to jobs……

    Report Post » Bryan B  
  • blackyb
    Posted on May 8, 2012 at 4:41pm

    That has some merit, but people, being the slobs they are at times, may put the health of others at risk if things are not clean, and shops are not washing things people use and sanitizing them. I think a lot of things are not necessary and are money paid out when it should not have to be to become some type of service to others. It is all mostly someone wanting to make money off the talents of others in most cases.

    Report Post » blackyb  
  • TheEDGE
    Posted on May 8, 2012 at 4:41pm

    Hey! Funny how they‘ve almost got it to where the only jobs that don’t require a license are done by illegal immigrants. No license? No job! No papers? Well, nobody wants those jobs anyway.

    Report Post » TheEDGE  
  • ThurstonHowellIV
    Posted on May 8, 2012 at 4:36pm

    It’s understandable that you would want a licensed professional in some instances– For example, your electrician should know enough to keep you from getting electrocuted in the bathroom or having your wiring cause an electrical fire. However, I don’t really think the public needs to be protected from buying flowers that were arranged by an unlicensed florist. Let government get a foothold and they will always take their power to extremes.

    Report Post » ThurstonHowellIV  
    • Pawhuska
      Posted on May 8, 2012 at 6:13pm

      Even that is an encroachment on freedom!
      Let the private market provide a licensing process or aproval process for those who want that but the person who is honest and upfront about not having a license should not be penalized unless harm is done. Do your homework get references BUYER BEWARE BUT LET FREEDOM REIGN!
      I have seen too many licensed people hide behind their license and still not do quality work!
      If every one only hired licensed plumbers and electricians only the rich would have them.
      They are now saying you cannot even work on your own house without a license! I remember when the licenses started you only had to pay a fee then gradually tests and apprenticeship was added! The Gov. never knows when to quit! Like I said you can’t even work on your own house anymore!

      Report Post »  
    • noneed4govthelp
      Posted on May 8, 2012 at 7:10pm

      I disagree with you.Electricians should have their work inspected,they don’t need to have a license.The electrical inspectors around me(NY) are independent contractors and are not on the public payroll.A lot of towns require plumbers to be licensed.All this does is keep the prices up and keep others from working.It makes it a rigged game.As long as the work is done right and inspected it should not require a license.

      Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on May 8, 2012 at 4:35pm

    Another fine example of government control and cronism; they determine the winners and set the rules to keep out the competition they do not like.

    Report Post » Snowleopard {gallery of cat folks}  
  • FromSeaToSea
    Posted on May 8, 2012 at 4:30pm

    America is not free market or capitalist. Someone please tell the OWS crowd. America is a manipulated and corrupt system. I am all for free enterprise when we have one.

    Report Post »  
  • right-wing-waco
    Posted on May 8, 2012 at 4:22pm

    Isn’t it time we fire all these bureaucrats? Dump the millions of regulations!

    Report Post »  
  • JRook
    Posted on May 8, 2012 at 4:22pm

    “Licensing may have little to do with protecting public health and safety but it does protect those who already have licenses from competition,” Right answer …. And if you look closely you will find it is the lobbyists for the companies and occupations that push through these and in many instances control such licensing. Once again, something that people want to lay at the government feet is really an outcome of a political system that is controlled by the wealthy, corporations and lobbyists. Always follow the money.

    Report Post »  
    • blackyb
      Posted on May 8, 2012 at 4:53pm

      This has some merit, as well. Look at the education costs for doctors and dentists, and then the insurance premiums they have to pay each month. There are some people who would injure others if this is not regulated for safety by others. People, beause they are evil cause misery on the rest of the human population. There would be people who would experiment on others, practice in unsanitary conditions, etc. People are mostly selfish to the point, those who, like lawyers, reap the benefit because all people do not have it in their heart to do what is best.

      Report Post » blackyb  
    • JRook
      Posted on May 8, 2012 at 5:07pm

      Agreed, but too often the groups I identify utilize the licensing laws to limit the supply of their profession rather than to police it. Witness the rarity that the Medical board or Bar Assoc. revokes someones license. Much rarer than the frequency of the events you reference. Good example is that the Physical Therapist Association in Ohio was able to change the licensing such that you have to earn a PhD. to become a physical therapist. Of course the current licensees were grandfathered. Limiting supply and higher incomes was the driver here not patient safety.

      Report Post »  
  • HKS
    Posted on May 8, 2012 at 4:20pm

    Ah, da fuhrer is about to take control of who does and who does not work. Is this a great country or what, he can do that.

    Report Post » HKS  
    • CatB
      Posted on May 8, 2012 at 4:36pm

      I think he is about to get “schooled” .. even my “liberal” friends are getting fed up.

      Report Post »  
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