The Problem: Government’s first responsibility is public safety, and one way it fulfills that obligation is by making sure that professionals are appropriately trained. It is important that our doctors and nurses are credentialed. Though less obvious, we also want to ensure that our engineers are credentialed. Failure to weed out incompetent engineers could result in collapsed buildings resulting in death and injuries.
But as is often the case in government, something that started out as a good thing can become a problem. While only five percent of workers in the 1950s needed a government license, today nearly one in three workers nationally must obtain a license before being able to work.
Occupational licensing has three policy side effects that we have to weigh whenever we consider its utility. First, licensing makes it harder for new people to enter a profession. Let’s say you want to apply for a barber’s license. You would need 1,000 hours of education–over six months of classes at 40 hours per week. Plus, before you could ever make a dime as a barber, you would have to pay thousands of dollars in tuition to a cosmetology school. Thus, even if you’ve cut your family’s hair for years, becoming a barber is not an easy career move. It requires real commitment to meet the licensing requirements.
Second, when occupational licensing limits the number of people in a profession, it drives up prices for consumers. It’s basic supply-and-demand. If there are fewer people available to provide a service, then prices will go up. Economists estimate consumers pay six to fifteen percent more in states with licensed workers than in states where it is not.
Third, occupational licensing is particularly problematic for vulnerable populations. Though many licensed professions are white collar, many are also blue-collar or entry-level (veterinary technician), thus making it harder for people in poverty to move toward prosperity. Because it is state-based, occupational licensing also creates barriers for people who move into a new state. This lack of reciprocity is a particular burden for military spouses. Finally, because many license reviews include a criminal background check, licensure can be a real barrier to the successful reentry into society for those emerging from prison.
The Response: The dignity of work is a human need. Reforming occupational licensing is actually a bipartisan priority. Though initially associated with free-market conservatives like our team at the 1848 Project, occupational licensing reform was a priority in the second Obama Administration. A major report from Obama’s economic agencies concluded “the practice of licensing can impose substantial costs on job seekers, consumers, and the economy more generally. This is particularly true when licensing regulations are poorly aligned toward consumer protection and when they are not updated to reflect a changing economy.” Wisconsin has already adopted some laws to ease licensure, but more must be done. We can start with what we call the EMT test. It takes 180 hours of training to become an emergency medical technician in Wisconsin. If you can become a lifesaving EMT in 180 hours, that should be sufficient training time to become a safe barber.