Occupational Licenses Have Grown Out Of Control

  • Nearly 30 percent of U.S. jobs require a state license, up from less than 5 percent in the 1950s.
  • States vary in which occupations they license and the requirements for each license.
  • Every state requires licenses for dentists, lawyers, and physicians to practice, but some states also license florists, interior designers, preschool teachers, and hairstylists.
  • Occupational licenses are purportedly justified to protect public health and safety and to ensure a high level of quality in services. But not all licensed occupations pose public threats, and there are less restrictive ways to demonstrate quality.

Licenses Can Do More Harm Than Good

  • Licenses increase the cost of goods and services to consumers, discourage entrepreneurship, stifle market competition, reduce job growth, and limit job opportunities–by approximately 3 million jobs nationwide. This especially hurts people who are just starting out and need opportunity most.
  • Occupational licenses can require costly, time-consuming training and education, fees, exams, and paperwork that lower-income workers are less able to afford. 
  • Because some states do not recognize out-of-state licenses, the licensing process restarts after a move to a new state. This creates particular challenges for people who move frequently, such as military spouses.
  • Licensing laws may include blanket exclusions for those with criminal records, regardless of whether their records are relevant to the job or how much time has passed since their offense. 
  • Unlicensed workers face cease and desist orders, fines, or in some cases, prosecution and incarceration.

Reforms Will Free Workers To Pursue Opportunity

Policymakers should: 

  • Eliminate unnecessary licenses or scale back onerous licensing requirements.
  • Consider alternatives to licensing such as public or private certification, registration, and inspections that can address quality or public health concerns.
  • Consider interstate compacts, such as reciprocity agreements, universal licensing recognition, or multi-state licenses with a common set of qualifications, that allow workers to practice across state lines.