June 4 2014
Scaling Back Government Licensing Regulations to Spur Opportunities
Patrice J. Lee
A fairness issue that flies under the radar but disproportionately affects women is licensing. Stringent licensing stifles innovation and entrepreneurship – keeping opportunity out of reach from challenged communities.
Earlier this week, IWF’s Carrie Lukas challenged a New York Times piece that was right to blast over-licensing, but for the wrong reason.
Now we’re seeing Capitol Hill get serious about the issue. From hair stylists and braiders to aestheticians, there are thousands of small businesses that could enrich neighborhoods across our country and add much-needed jobs, especially in hard-hit neighborhoods. However, a giant standing in the doorway of opportunity: government.
That giant is about to get a stone to the head. Congress will wade into this issue and let us hope that it will set a federal example for states and cities.
The House and Senate announced a bipartisan measure recently that consolidates federal job training programs. The Workforce Innovation and Opportunity Act would eliminate 15 federal programs and overhaul requirements throughout the job training system in a an effort to help job seekers gain valuable employment skills.
The Hill reports:
The congressional agreement is a compromise between the House-passed Skills Act and a Senate bill that advanced out of committee last year but never received a floor vote.
It’s also a victory for House GOP leaders who have touted the job-training bill for months as an area where they could find common ground with the Obama administration and Senate Democrats.
Top House Republicans cited the Skills Act as one of four potential avenues for compromise in a letter they sent to President Obama after his State of the Union address,
Cantor said the House would vote on the bill as soon as it clears the Senate, adding that he hoped it would lead to more bipartisan agreements, particularly on jobs bills that the House has already passed.
Republican Rep. Eric Cantor is taking the lead on pushing this measure forward as part of his effort to remove barriers to work. He and American Enterprise Institute President Arthur Brooks teamed up with other members of Congress recently to tout this bipartisan effort and talk about the problems with licensing. They see the disparity in licensing fees for different industries as a critical “barrier to success” for the working poor that Congress (especially Republicans) want to address. Cantor also plans to reach out to governors around the country to reform the licensing system.
In March during a hearing on the subject, practitioners hurt by licensing shared their experience. An African hair braider, in her testimony before the committee explained that her ultimate goal was to teach others how to braid, continuing a skill that had been passed down from generation to generation. Tupelo, Mississippi, where she lives, passed tough licensing rules that meant she had to take 300 hours of course work to start her salon: none of these courses covered hair braiding. Makes no sense!
Ramesh Ponnuru noted in Bloomberg earlier this year, it would have taken this hair braider longer to get her license than to become a firefighter, emergency medical technician, hunting instructor, ambulance driver or real estate appraiser individually and combined!
Licensing of industries can be arbitrary, expensive, and nonsensical. An element of cronyism is at play as established businesses get policymakers to set requirements so high that new entrepreneurs are priced out and kept out.
Scaling back licensing would spur small business creation and could be a big remedy for the unemployed and Millennials – especially the long-term unemployed who are increasingly less likely to find work and may have to create their opportunities. Brooks and Cantor highlighted cosmetology as example of how we can get women back to work by making it easier to open a home salon. That allows many single mothers to work and be with their children at the same time.
What we need aren’t more numbers but solutions and this could just be one of them.