News: CJ Exclusives

North Carolina Imposes Above-Average Occupational Licensing Burdens

National study finds too many licensing laws deliver no safety or consumer benefits

North Carolina ranks 29th of the 50 U.S. states (plus the District of Columbia) when it comes to imposing laws requiring people wishing to perform certain occupations to get a license from the government, according to a new study by Institute for Justice.

In its report – License to Work: A National Study of Burdens from Occupational Licensing – the libertarian public-interest law firm found that North Carolinians need a government-issued license to work dozens of relatively low-tech, low-paying jobs.

From landscape workers to athletic trainers to cosmetologists, the state forces would-be entrepreneurs to spend thousands of dollars and sometimes several years in school to start their careers.

The states ranking at the top of the list impose fewer licensing requirements than those at the bottom.

Licensing laws often serve to protect professions, not consumers, the study found. They tend to keep the poor and those with less formal education out of certain fields of work; a disproportionate share of people seeking work in these occupations are members of racial and ethnic minorities. These policies decrease competition and the availability of services, while increasing consumer prices and unemployment, the report says.

Barriers to entry

A number of occupations have higher-than-average barriers to entry in North Carolina, the report said. For example:

• North Carolina requires almost two years of education to become a barber compared with the national average of slightly more than a year.

• It takes three years to become a landscape contractor or a fire/security alarm installer, compared to national averages of one-and-a-half years or less.

• Aspiring pest control applicators must spend two years in an apprenticeship, despite 32 states requiring no experience at all.

Often the education requirements North Carolina and other states impose don’t seem consistent with the demands of the job.

While it takes only 39 days of training to earn a license as an emergency medical technician in the state, it takes substantially more to become a licensed manicurist (70 days), massage therapist (117 days), skin care specialist (140 days), cosmetologist (350 days), or barber (722 days).

“Occupations like these, where training required does not line up with public safety concerns, make possible targets for reform, as well as occupations that are more difficult to enter in North Carolina than elsewhere,” the report says.

“North Carolina could open more prospects for its low- to moderate-income workers by lowering or eliminating such high and unnecessary barriers to entry in licensed occupations.”

Protectionism

“More than 200 years ago, Adam Smith observed that trades conspire to reduce the availability of skilled craftsmen in order to raise wages … little has changed since that time,” the report says.

“Occupational practitioners, often through professional associations, use the power of concentrated interests to lobby state legislators for protection from competition though licensing laws,” it continues.

It says trade groups sometimes mask their anti-competitive motives with “absurd” appeals for protecting public health and safety.

For example, the report notes the 2011 legislative session in North Carolina saw efforts to license music therapists as a means of “safeguard[ing] the public health, safety, and welfare. …”

“It is possible to use music harmfully,” a music therapy professor told a group of state lawmakers last June. “You can use music that’s the wrong tempo or … that does not have the right musical qualities, and it can affect someone physiologically in a way that it can be damaging.”

Other occupations requiring a license to practice in North Carolina are auctioneer, sign language interpreter, makeup artist, locksmith, and painter.

Alternatives and recommendations

Rather than force every practitioner of an occupation to spend the time and money to qualify for a license, the report urges states to allow a voluntary certification process through a professional association. That way leaves professionals free to distinguish themselves, letting consumers choose among all providers and decide for themselves how much value to place on such credentials.

The report also noted third-party consumer organizations, like AngiesList.com, enable consumers to hold occupational practitioners accountable for the quality of their goods and services.

The authors of the report recommended that lawmakers “demand proof that there is a clear, likely and well-established danger to the public from unlicensed practice” of an occupation when considering whether to adopt or repeal a licensure law. When they do find licensure necessary, lawmakers should determine carefully how much of the burden placed on applicants is necessary to ensure public safety.

“Forcing would-be workers to take unnecessary classes, engage in lengthy apprenticeships, pass irrelevant exams or clear other needless hurdles does nothing to ensure the public’s safety,” the report says. “It simply protects those already in the field from competition by keeping out newcomers.”

“Finding a job or creating new jobs should not require a permission slip from the government,” the authors conclude. “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 burdensome regulations that force job-seekers and would-be entrepreneurs to spend precious time and money earning a license instead of working.”

Sara Burrows is an associate editor of Carolina Journal.