Earlier this week, President Trump released the Executive Order on Increasing Economic and Geographic Mobility. While it is the responsibility of individual states to enact occupational licensing reforms, the executive order sends a strong signal that occupational licensing laws are in need of reform.
Occupational regulations can protect practitioners from competition rather than protect the public from malpractice. Unfortunately, the number of occupational regulations has substantially increased over the last few decades. Since the 1950s, the percentage of jobs requiring a government-mandated occupational license has increased from less than 5 percent to between 25 and 30 percent. By requiring workers to acquire new licenses when they move to a new jurisdiction, occupational regulations reduce worker mobility, disproportionately harm low‑income Americans, and are particularly burdensome to military spouses who must relocate to support the service members committed to keeping our country safe.
The order then expounds upon the barriers that occupational licensing requirements can raise for individuals seeking steady employment:
Additionally, blanket prohibitions that prevent individuals with criminal records from obtaining occupational licenses may exacerbate disparities in employment opportunity and increase the likelihood of recidivism, particularly as regulatory barriers to enter lower- and middle-income occupations are associated with higher recidivism rates. Licensing requirements unnecessary to protect consumers from significant and demonstrable harm also frequently impose expensive educational requirements on potential job seekers, even for occupations with limited future earnings potential. According to recent research, licensing requirements have cost our country an estimated 2.85 million jobs and over $200 billion annually in increased consumer costs.
This recognition is followed by a call for states to follow the examples of states like Arizona, Florida, Iowa and Missouri. These states have all enacted occupational licensing reforms, whether they passed bills allowing for universal recognition of occupational licenses or removing unnecessary occupational licensing requirements for certain professions, as I note in my 2020 review of occupational licensing reforms.
While this executive order is a great show of support for occupational licensing reform, it does not quite go far enough. It is true that some occupations should have educational requirements to protect public health and safety. But many requirements that exist today are completely unnecessary. Take, for example, florists in Louisiana. They pose no risk to the public and yet are still required to undergo training and pass exams.
Through our Chasing Work storytelling campaign, Independent Women’s Forum has been working to show the harm that unnecessary occupational licensing laws cause as well as highlighting the good that frontline workers such as nurses have been able to do to support areas hard-hit by COVID-19 because of the loosening of occupational licensing requirements between states.
Of course some occupations should and do have licensing requirements. But so many have unnecessary requirements that keep Americans from work. We should be dedicated to ensuring people have the least possible barriers to work, particularly during the hardships brought about by the pandemic.