Economic FreedomEconomy

Secretary of Labor Urges State Lawmakers To Pass Licensing Reform

Reforming overburdensome occupational licensing laws is one way state lawmakers can have an “immediate, consequential and measurable impact” on economic growth, according to U.S. Secretary of Labor Alexander Acosta.
Acosta said in a speech to the Western Governors’ Association yesterday:

Today, more than 1,100 careers are licensed in at least one state. More than 1 in 4 American workers now need a license to work in their chosen field. First, the cost and complexity of licensing creates an economic barrier for Americans seeking a job, especially for those with fewer financial resources. Second, excessive licensing creates a barrier for Americans that move from state to state. Geographic mobility is especially important for our economy.  And third, excessive licensing creates a barrier for Americans looking to leverage technology to expand their job opportunities.

The financial costs are obvious; some licensing applications cost thousands of dollars. The cost in time is at least as high.  The national average time required for a cosmetology license is 370 days.  In one state, it is 490 days. For Americans living paycheck to paycheck, investing time and money into licensing is a substantial burden.
Americans want principled, broad-based reform.  If licenses are unnecessary, eliminate them. If they are needed, streamline them. And, if they are honored by one state, consider honoring them in your own state.

This advice is particularly pertinent for Arkansas lawmakers.

According to the Institute for Justice (IJ), Arkansas has the second-most burdensome occupational licensing laws in the nation.

Of course, State Rep.

Richard Womack has spent the past two legislative sessions trying to pass legislation that would help fix many of the problems Acosta highlighted with occupational licensing.

Womack introduced legislation last session that would’ve protected the right to earn a living: it would have ensured that a private individual has the right to engage in a lawful occupation without being required to comply with an occupational regulation that imposes a substantial burden on the individual, is not substantially related to the state’s important interest in protecting against present and recognizable harm to public health or safety, and is either unreasonable or more restrictive than is necessary to further the state’s important interest in protecting against present and recognizable harm to the public health or safety.

Unfortunately, his legislation never made it out of the Public Health, Welfare and Safety committee.

Occupational licensing reform isn’t a partisan issue. President Obama’s White House Council of Economic Advisers recognized in a 2015 report that too much occupational licensing increases prices while decreasing economic opportunities.

Arkansas lawmakers often (rightfully) complain about all of the mandates and directives being handed down from the federal government. However, Arkansas would be well served by taking Acosta’s advice on occupational licensing reform

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