NC needs bold action, not little tugs, to cut out unnecessary licensing
A regular feature of the General Assembly being in session is legislation to make tweaks to different professions’ licensing requirements or scope of practice. As an advocate of individual liberty, free markets, and faster economic growth through disentangling human enterprise from unnecessary red tape, I am frequently asked about such bills. Do they make the situation better for people? Do they move the needle a bit more toward freedom? Do they have potential for negative unintended consequences? Do they move the needle further down to cronyism and overregulation?
Occupational licensing is a profound barrier to entry, placing many expensive hurdles in the path of anyone wanting to start work in a licensed field. Those hurdles include getting all the education credits required, taking and passing all exams required, fulfilling any apprenticeship requirements, paying all fees related to getting and maintaining the license, etc.
These hurdles can make the difference between someone entering the profession of their choice in order to provide for their family or being forced to accept a far less satisfying career options or even the unemployment line.
So any bill that lowers or removes any of those hurdles for any profession is welcome. That means reducing required credit-hours, expanding the number of education providers, reducing the number of required exams, reducing the number and amount of fees required, and so forth. Any bill that would remove a license altogether would, of course, be the most welcome.
Things can get messier, however, when the underlying issue is a scope-of-practice turf war between licensed practices. A bill to allow advanced practice registered nurses (APRNs) to treat patients up to the full scope of their clinical training and eliminate the barrier of the requirement of a collaborative practice agreement with a physician would certainly make the situation of health care provision better for people, especially in rural areas with fewer physicians.
But sometimes legislation would create a new state regulatory board to govern a practice that’s currently licensed under an existing board. In those cases, it’s harder to forecast if the bill would make people a little freer and better off, or whether it poses negative unintended consequences that would be greater on net. If the scope-of-practice issue is not patient safety, but instead ability to secure medical insurance reimbursement, then it would be preferable for legislation to address the root of the issue, such as with a specialty occupational license that would not preclude other practitioners from serving patients.
Step back and rethink the whole problem
Most of the time, however, the matter at hand is a small tug in one little area of practice. But North Carolina has a bewildering “319 occupational licenses, 498 business licenses, and 80 business/occupational licenses,” and that’s not counting local licenses. The enormity of the problem reminds me of the ancient challenge of the Gordian knot:
As the story goes, in 333 B.C. the Macedonian conqueror marched his army into the Phrygian capital of Gordium in modern day Turkey. Upon arriving in the city, he encountered an ancient wagon, its yoke tied with what one Roman historian later described as “several knots all so tightly entangled that it was impossible to see how they were fastened.”
Phrygian tradition held that the wagon had once belonged to Gordius, the father of the celebrated King Midas. An oracle had declared that any man who could unravel its elaborate knots was destined to become ruler of all of Asia.
The conqueror was Alexander the Great, and he was “seized with an ardent desire” to untie the Gordian knot. It wasn’t going to be done by tugging and pulling at various threads. Unable to find either end to the knot, Alexander was stuck “wrestling with it for a time and finding no success.”
With occupational licensing, the North Carolinian knot, legislators over time chose to bind up this profession or that with excessive government regulation, and too often the question for policymaking becomes which loop do we tug on to loosen the binding a little.
We ought to instead be asking why we have the binding there in the first place, especially in the many cases where other states choose to let those professions govern themselves unfettered.
Alexander figured out the solution to his knot:
After wrestling with it for a time and finding no success, he stepped back from the mass of gnarled ropes and proclaimed, “It makes no difference how they are loosed.” He then drew his sword and sliced the knot in half with a single stroke. … True to the prophecy, he went on to conquer Egypt and large swaths of Asia before his death at age 32.
The way to solve the North Carolinian knot would be to go straight at it with several structural reforms. They include a Right to Earn a Living Act, an Occupational License Consumer Choice Act, instituting sunset with periodic review of remaining licenses and licensing boards, a least-cost-state standard of remaining licenses’ burdens, and universal license recognition for remaining licenses.
Legislators know that occupational licensing is the state’s “Most Restrictive” occupational regulation, supposed to be for use only when the risk to public welfare is highest.
This package of reforms listed above are from the Locke Foundation’s Carolina Rebound report. Together, they would keep state licensing for where it’s demonstrably needed. Otherwise, they would free up workers and consumers in this state far more completely than the annual exercise of tugging and pulling at strands.
Jon Sanders is senior fellow of regulatory studies and research editor at the John Locke Foundation in Raleigh, North Carolina.