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

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"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 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

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