On April 3 The Wall Street Journal‘s editorial board praised a Nebraska bill to reform its occupational licensing system. This bill, the editors noted, would bring about “wholesale reform.”
The editors found several aspects of the bill praiseworthy. So do I. They include several ideas we at the John Locke Foundation have been promoting to reform occupational licensing in North Carolina.
Enter the proposed Occupational Board Reform Act that says the state should “use the least restrictive regulation to protect consumers.” This means, for example, that the state could use alternatives like periodic inspections to guarantee clean and safe hair salons and barber shops. That would spare cosmetologists and barbers some 16 months of training.
That is the wisdom of the Right to Earn a Living Act, which is now law in Arizona and Tennessee. My recent report on Modernizing North Carolina’s Outdated Occupational Licensing Practices concluded by urging policymakers to adopt a Right to Earn a Living approach here. I have a series on our Locker Room blog examining the Right to Earn a Living Act, piece by piece.
Our Policy Position on occupational licensing promotes several alternatives to the extreme of licensing. Our second recommendation is the Right to Earn a Living one: “Seek policy options other than licensing first, with a strong preference for respecting the freedoms to work and to choose.”
This chart explains:
Mississippi has also just recently passed similar legislation. Per the WSJ editors, similar bills are under consideration in New Hampshire and Louisiana now, too. Oklahoma is beginning a comprehensive review of its licensing structure.
Here’s another aspect the WSJ editors highlighted:
Legislative committees would review 20% of existing licensing requirements annually.
Compare that with our first recommendation: “Subject licensing boards and their licenses to sunset with periodic review, eliminating questionable ones.”
Thanks to a strong regulatory reform in 2013, North Carolina policymakers already know firsthand the wisdom of periodic review.
Continuing from WSJ:
They’d consider whether a license is really necessary, whether the training requirements are overly burdensome, and whether the certification is abused to exclude competition. The committees would also examine whether it’s less time- and cash-intensive to get the same licenses in neighboring states.
Compare that with our third and fourth recommendations: “Expand recognition of other states’ licenses” and “Work with boards to reduce fees, education/experience requirements, and examination requirements when possible.”
Finally, the WSJ noted that “The bill would also help Nebraskans with criminal records find work.” A recent research brief of mine highlighted the problems North Carolinians with conviction records have with finding work in a licensed field. I wrote:
There is a significant and growing number of people in North Carolina who want to work but who have conviction records. A great many jobs out there — more than one-fifth — require an occupational license. But the state has a surprisingly large number of legal stops keeping a license from someone with a conviction record.
This chart illustrated the problem:
In the past two years, there has been as many instances of states de-licensing occupations as there were in the previous 40 years combined. Several more states are considering wholesale licensing reforms this year. North Carolina needs to join them.
Jon Sanders is director of regulatory studies at the John Locke Foundation.