Why Occupational Licensing Reform is Needed

Why Occupational Licensing Reform is Needed

How excessive occupational licensing hurts job seekers—and protects established industries

What do funeral directors, interior designers, and African-style hair braiders all have in common? The answer may surprise you: Each of these professions requires individuals to obtain an expensive and time-consuming license before going into business. If they don’t, they may face stiff penalties and jail time. This type of excessive occupational licensing creates unnecessary barriers for individuals seeking employment by requiring prospective employees to obtain what are essentially government-issued permission slips to work.

This practice of requiring licenses for various professions has grown astronomically over the past several decades. In the 1950s, only five percent of American jobs required an occupational license. Today that number has skyrocketed to 30 percent.

When Should You Need a License to Work?

While it makes sense for some professions, like doctors and nurses, to have mechanisms in place to ensure that practitioners know what they are doing and do not pose a threat to their patients, many of the jobs now requiring licenses do not have any connection to public health or safety. The licenses only serve to make it more difficult for individuals to find fulfilling work that betters their lives and improves their circumstances.

One such example is the requirement for those wanting to sell caskets: Sellers in eleven states are obligated to obtain a funeral director’s license, and getting one is no easy task. Individuals must complete a two-year training program that focuses on embalming dead bodies and other funeral home-specific tasks that are unrelated to the actual making and selling of caskets. These required courses combined with the licensing fees can cost tens of thousands of dollars.

Interior design is another surprising occupation that requires a license. In three states and Washington DC, licensing boards require prospective interior designers to complete six years of training. In addition to the time and money spent on education, the licenses themselves cost between $1,120 and $1,485. When accounting for these high costs and the timely coursework requirements, interior design occupational licenses are the most burdensome licenses for prospective workers, according to the Institute for Justice.

The field of cosmetology is also highly regulated by occupational licensing boards. In order to get an occupational license to practice African hair braiding in Pennsylvania, an applicant must spend upwards of $4,000 on a cosmetology course that takes 300 hours to complete. If braiders can prove to the cosmetology licensing board that they have prior experience, they can reduce their course load to 150 hours. Ironically these required cosmetology courses do not teach African hair braiding. They focus only on teaching students how to wash hair and other general haircare skills unrelated to their specific area of expertise. Once the coursework is completed, braiders must then pay a $93 examination fee and an additional $10 fee for the actual license. Biennial renewal for these licenses is an additional $67. Even after applicants have complied with every step of this process, licensing boards can still deny them their right to work if they believe any of their past actions put the public at risk.

Securing a job as a manicurist is regulated in 49 states and Washington DC. On average, prospective manicurists must pay to complete 91 days of coursework, pass two exams, and pay $172 in fees to the licensing boards.

Even those who are simply shampooing hair are not immune. Thirty-seven states now require an occupational license before someone can wash hair in a salon.

On average, occupational licenses require that a prospective employee take 248 hours of coursework, pay $130 in fees, and pass two separate exams. By mandating that these requirements be met before someone can begin to earn a living, many people are locked out of good jobs.

Occupational Licensing Inhibits Second Chances

Occupational licensing also plays a major role in preventing those with a criminal record from securing employment—one of the most vital steps a former offender can take to avoid landing back in jail. Many of the jobs appealing to those reentering the workforce after being incarcerated require occupational licenses, but those recently released from prison often do not have the means to pay for the courses and licensing fees.

For those who can afford to pay the fees and navigate through all the red tape, the licensing boards still have the authority to deny individuals their right to work if they believe any of their past actions potentially put the public at risk.

Recently, two Pennsylvania women were denied the cosmetology licenses they needed in order to become estheticians and earn an income due to the fact that they both had a criminal record. Courtney Haveman and Amanda Spillane had both paid their debt to society and had worked diligently to get their lives back on track. After going to esthetician school and putting in the work needed to obtain their occupational licenses, the cosmetology licensing board denied them licenses on the grounds that their past mistakes posed a safety concern for their clients. Both women are fighting the board’s decision in court, but their stories highlight just how powerful these licensing boards have become.

Some correctional facilities, like Cook County Jail in Chicago, Illinois, have attempted to ease some occupational licensing burdens. For instance, they have allowed organizations to bring barber college to the inmates while they are still serving out their sentences. Barbers in every single state, plus Washington DC, must have a license to practice. In Nevada, the most burdensome state to obtain a license to barber, individuals must pay to complete almost 900 days of coursework plus spend an additional 1,500 attending barber school on top of an 18-month apprenticeship. And this doesn’t include the $165 dollars in licensing fees.

Protectionism and Occupational Licenses

No matter how the practice is rationalized, there is one primary motive fueling occupational licensing: Protectionism. Occupational licensing is often justified on the grounds that it exists to protect the health and safety of consumers, but occupational licensing boards exist to protect established industries from unwanted competition from new individuals entering the field. The boards themselves are usually comprised of members who are well-established in their fields and who have a vested interested in keeping out the competition.

When licensing boards restrict who can enter a given field of work, both personal growth and innovation is stifled. A potential employee misses out on the chance to work, while consumers miss out on the opportunity to receive goods or services from someone who might be extraordinary in their given field. They also miss out on increased competition, which drives prices down. To ensure that individuals have the best opportunity to succeed, we need to remove the barriers that prevent people from securing employment, finding fulfillment, and bettering their lives.

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