Occupational Licensing's Bad Effects Are Increasingly Hard To Ignore | Eastern North Carolina Now

    Publisher's note: The author of this post is Jon Sanders, who is director of regulatory studies for the John Locke Foundation.

    The case for significantly curtailing occupational licensing in North Carolina and elsewhere recently got a major boost from an unexpected source: the White House.

    In July the Obama administration put forth a white paper entitled "Occupational Licensing: A Framework for Policymakers." The paper, a joint product of the Department of the Treasury Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor, urged:


    The report examined several aspects of licensing, including:

• Occupational licensing has grown rapidly over the past few decades.
• When designed and implemented carefully, licensing can benefit consumers through higher-quality services and improved health and safety standards.
• But by making it harder to enter a profession, licensing can also reduce employment opportunities and lower wages for excluded workers, and increase costs for consumers.
• Licensing requirements vary substantially by State, creating barriers to workers moving across State lines and inefficiencies for businesses and the economy as a whole.
• The costs of licensing fall disproportionately on certain populations.
• Best practices in licensing can allow States, working together or individually, to safeguard the well-being of consumers while maintaining a modernized regulatory system that meets the needs of workers and businesses.
  
  • Limiting licensing requirements to those that address legitimate public health and safety concerns to ease the burden of licensing on workers.
  • Applying the results of comprehensive cost-benefit assessments of licensing laws to reduce the number of unnecessary or overly-restrictive licenses.
  • Within groups of States, harmonizing regulatory requirements as much as possible, and where appropriate entering into inter-State compacts that recognize licenses from other States to increase the mobility of skilled workers.
  • Allowing practitioners to offer services to the full extent of their current competency, to ensure that all qualified workers are able to offer services.

    Those issues should sound familiar to readers of the John Locke Foundation's work. Our First in Freedom Index gauging the climate for freedom in each of the 50 states found, for example, that North Carolina's aggressive occupational licensing regime was a significant impediment to regulatory freedom.

    Even as research shows strong results for entrepreneurship as a ladder out of poverty,* North Carolina is the 13th most restrictive state in licensing low-income occupations.

    For those reasons and others, I recently produced a research paper arguing in favor of North Carolina moving away from occupational licensing and toward voluntary certification. As that paper concluded:



    The governing impulse should be here, as elsewhere, toward freedom rather than regulation. Research bears out the better results.

    *Note: Entrepreneurship is therefore a damned sight more effective fighter of poverty than, for example, sinecure academic centers that actively avoid sound economics and whose practical existence is highly limited to such inefficacious quasi-exertions as puffing up resumes and promoting harmful policies that originated with racist progressive eugenicists.