Occupational licensing – requiring a government license to perform certain jobs – is one of those ideas that sounds great in the abstract. But as one looks at how it works in the real world, the shortcomings become obvious in a hurry.
This is painfully true in North Carolina. That’s because not only are many state licenses to work ridiculously expensive and time consuming, but there is no apparent rhyme or reason to explain why some are difficult to obtain and others are not.
In our state, if you want to become an HVAC contractor, be prepared to spend two years getting all the certifications. But if you want to become a security guard, it will take you only three days. It will take you four years to become an athletic trainer, and forty-three days to become an emergency medical technician.
Those priorities are out of whack.
Occupational licensing was conceived as a way to protect the public and provide some assurance that the people doing certain jobs had the training and know-how to perform them.
Concerns about public health are often invoked to defend licensing requirements, but here again North Carolina yields an example. While training or certification is required to become a pharmacy technician in our state, in neighboring South Carolina and Tennessee all that is required is to register with the state pharmacy boards. There’s no evidence that pharmacies are safer here than in neighboring states.
Occupational licensing has evolved into a costly system that works more like a cartel – to protect current practitioners by keeping competitors out – or at least making it difficult and costly for others to enter the market. In some instances, those practitioners are empowered to decide who gets to compete with them.
That is not how our economy is supposed to work. Onerous licensing requirements stifle innovation, limit competition and drive up prices for everybody.
And they shut the door on economic opportunity for many of our poorest citizens.
Licensing regulations often require costly fees and months or years of state-mandated training that many low-income workers simply can’t afford.
North Carolina requires a costly license for workers entering more than five dozen professions, ranging from barbers and cosmetologists to athletic trainers and sign language interpreters. Without a state-issued permission slip, you can’t do these jobs.
That leaves almost a million people in our state – more than one in five North Carolina workers – who need a license to do work.
And while occupational licensing requirements are a problem in many states, they’re worse here than in a lot of other places. North Carolina requires almost two years to become a barber, compared to the national average of 368 days. (We are a handsomer people than most other states, but I don’t think it’s a result of the additional training of our barbers.)
In 1950, 5 percent of workers nationwide needed a license. Today, nearly one-fourth do.
This is a bipartisan issue. In July 2015 the Obama administration released a report that concluded: “There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines.”
We’re moving in the wrong direction on this issue. North Carolina needs to make it easier, not harder, for our workers to get jobs.
Odell is the N.C. outreach director of the Americans for Prosperity Foundation and its project, The Bridge to Wellbeing. Email: MOdell@afphq.org