Study: Occupational licensing burdens low-income workers, entrepreneurs

Michael Bastasch | Contributor

Ever want to be a preschool teacher?

That could be difficult considering this occupation requires a license in 49 states and the District of Columbia, and, depending on where you live could cost you up to $250 in fees and can require up to 1,825 days of education and training.

It’s the most heavily regulated occupation and has the second most burdensome licensing requirements, according to a new study by the libertarian-leaning Institute for Justice (IJ).

In the 1950s, one in twenty occupations required a license. Today, nearly one in three occupations requires a license, meaning that it is becoming more difficult for people to enter those fields, pursue careers and open businesses.

“These licensing laws force people to spend a lot of time and effort earning a license instead of earning a living,” said Dr. Dick Carpenter, IJ director of strategic research and report co-author. “They make it harder for people to find jobs and to build new businesses that create jobs.”

The IJ study examined the burdens of occupational licensing in all 50 states and the District of Columbia for 102 occupations, ranking them based on the scope of licensing laws for low- and moderate-income occupations and how burdensome those laws are.

“The data cast serious doubt on the need for such high barriers, or any barriers, to many occupations,” said Lisa Knepper, the study’s other co-author. “Unnecessary and needlessly high licensing hurdles don’t protect public health and safety — they protect those who already have licenses from competition, keeping newcomers out and prices high.”

About half of the licensed occupations studied — including contractors, cab drivers, and barbers — offer practitioners the chance to open up their own businesses.

About one third of the occupations studied are construction trades like masons, glaziers and painters, but only those who work as contractors can have their own business.

Also, people in the studied occupations tend to make less money, be male, be ethnic minorities and have completed fewer education requirements than the general population.

Occupations like cosmetologist, bus and truck drivers, and pest control applicators are licensed in every state and the District of Columbia. These professions are not only the most widely licensed, but also have some of the most onerous requirements. Interior design is the most difficult profession to enter, even though it’s only licensed in three states.

More obscure and surprising professions also require licensing. For example, taxidermists require licensing in 26 states, funeral attendants in 9 states, shampooers in 5 states and florists in one state.

States license 43 occupations on average. Louisiana requires licenses for 71 of the 102 occupations studied, more than any other state. The next highest were Arizona with 64, California with 62, and Oregon with 59.

Hawaii has the most burdensome average licensing requirements for occupations, while Pennsylvania has the least burdensome requirements. California and Arizona ranked the highest in the most widely and onerous licensing requirements.

On average, the 102 occupations studied require $209 in fees, one exam, and about nine months of education and training. 35 of these occupations require over a year of education on average and another 32 jobs require 3 to 9 months of education and training. For 79 occupations, at least one exam is required.

“Finding a job or creating new jobs should not require a permission slip from the government. As millions of Americans struggle to find productive work, one of the quickest ways legislators can help is to simply get out of the way: reduce or remove needless licensure burdens,” Carpenter said.

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